On 11 May 2021, the European Commission published a report that it had sent to the European Parliament and the Council on the review of the Mortgage Credit Directive (MCD) together with an annex.

The report has been prepared under Article 44 MCD, which requires the Commission to review the effectiveness and appropriateness of the provisions on consumers and the internal market, with an emphasis on the experience acquired in applying the Directive. A study launched by the Commission on the evaluation of the Directive formed the basis of the report. Also, in line with Article 45 MCD, the report reviews the need for supervision of credit registers. The Commission will meet the requirement under Article 45 MCD to submit a comprehensive report assessing the wider challenges of private over indebtedness directly linked to credit activity at a later stage, taking in particular account of the impact of the COVID-19 pandemic on consumers.

In its conclusion the report notes:

• The MCD has been effective in raising the standard of consumer protection and it has helped harmonise mortgage-lending practices across Member States. Nevertheless, the level of protection still differs as the Directive gives many options to Member States. There is also a need to ensure that consumer protection rules remain fit for purpose as the market develops and new challenges arise, notably from digitalisation.
• The creditworthiness assessment process may also need to be adjusted to keep pace with progress in the use of artificial intelligence, depending also on the developments around the recent Commission proposal on artificial intelligence, and climate and environment-related policy objectives.
• The Directive has had a limited impact on the creation of a single market for mortgages, mostly for reasons falling outside the scope of the MCD. However, gold-plating of the MCD by the Member States may also hinder the achievement of this goal.
• There is scope to increase the level of mortgage switching by consumers, which could potentially unlock huge benefits for consumers while increasing competition and innovation in the market.
• Credit reference agencies are already subject to an appropriate degree of supervision by national data protection authorities and the European Data Protection Board regarding the conduct of their activity in processing personal data under the MCD.