On 12 September 2023, the European Parliament announced that MEPs have adopted a proposed new directive on consumer credits.
The new directive on consumer credits, already agreed between Parliament and Council negotiators in December 2022, aims to make the credit markets function smoothly while ensuring a high level of consumer protection. The legislation will cover credit agreements of up to €100,000.
The new directive includes the following:
- Member States will require a creditor, before concluding a credit agreement, to make a thorough assessment of a consumer’s creditworthiness, in the consumer’s interest and to prevent irresponsible lending practices and over-indebtedness. The assessments should verify the capacity of the consumer to meet their obligations.
- Non-bank creditors and credit intermediaries (except micro enterprises and small / medium enterprises) will be subject to an admission process and registration and supervision by national competent authorities.
- Member States will have to ensure that consumers have the right to withdraw from a credit agreement without any reason within 14 days. Consumers will have the right to early repayment and to reduce the total cost of their credit.
The directive enters into force on the 20th day after its publication in the Official Journal of the EU. Member States will then have 2 years to adopt necessary laws and administrative provisions and 3 years to apply them.
