On 1 July 2021, the European Commission issued a proposal for a Directive on consumer credits repealing and replacing the Consumer Credit Directive (CDD). The Commission also published the Annexes to the draft Directive, an impact assessment report, an executive summary of the report and a factsheet. The European Parliament and the Council of the EU will now consider the draft Directive.
The draft Directive is part of the Commission’s New Consumer Agenda and some of its proposed revisions to the CCD include:
- Extension of the scope of the CDD to cover loans below EUR 200, interest free credit, all overdraft facilities and all leasing agreements, as well as credit agreements concluded through peer-to-peer lending platforms.
- Reduction of the amount of information to be provided to consumers in advertising focusing on key information when provided through certain channels.
- More details on how and when pre-contractual information is presented to consumers to make sure it is done in a more effective way.
- Establishment of the obligation upon Member States to set caps on interest rates, the annual percentage rate of charge or the total cost of the credit.
- Banning practices that exploit consumer behaviour, such as pre-ticked boxes, tying practices and unsolicited sales.
However, the draft Directive states that the protection of consumer granting credit through peer-to-peer lending platforms is not address as “it does not fit the logic of the proposal”. The protection of consumers investing through these platforms and the responsibilities of the platforms towards these consumers will be assessed in another context.