The European Association of Co-operative Banks (EACB) welcomes the opportunity to provide its comments to the European Commission consultation on the evaluation of the Consumer Credit Directive (CCD).
EACB members believe that the adoption of the CCD has had the benefit of putting in place better consumer protection and legal clarity in some Member States. It has fulfilled its purpose of ensuring a high standard of consumer protection at EU level, with a European formula to calculate the Annual Percentage Rate of charge (APR) and strong rights, such as the right of withdrawal and the right of early repayment.
We would like to stress that Member States’ gold-plating practices have created fragmentation in the European market, thus undermining one of the CCD objectives to develop cross-border credit in Europe. This concerns in particular, the information requirements and the right of withdrawal.
The CCD implementation was costly and a re-run of a similarly costly exercise should be avoided, especially considering the fact that overall, the Directive has served its purpose.
Should the Commission’s evaluation process suggest that the CCD be revised, co-operative banks would ask that the revision be strictly focused on addressing the following points:
- The provisions of the CCD regarding advertising, pre-contractual and contractual information (Articles 4, 5, 6 and 10) make it difficult to adjust the offering of consumer credit to the need of the digital society and the demands for more convenience from customers.
- The provisions of the CCD regarding advertising, pre-contractual and contractual information (Articles 4, 5, 6 and 10) could also benefit from a general simplification. The information requirements could advantageously be streamlined.
Co-operative banks strongly oppose the idea of any further standardisation of creditworthiness assessment that goes beyond what already prescribed by the CCD. Creditworthiness assessment is the expression of each credit institution’s own expertise and risk appetite. Common indicators would not take into consideration the local economic background and would exclude some people facing difficulties from access to credit.