Consumer credit directive

Consumer credit plays an integral part in supporting the modern economy by providing consumers and small businesses with convenient and safe access to finance, be it for planned projects or bridging larger and unforeseen expenses. It is also a key enabler of consumption for a wide range of purposes from the sale of modern, energy-efficient cars and other durable consumer goods, to green home investments, to college education.

By providing access to finance to individuals and households, consumer credit supports the social and economic well-being of millions of consumers across Europe and is a key instrument to achieve Europe’s green transition, as well as supporting the European economic recovery after the impact of the COVID-19 pandemic. Annually, more than €400 billion of goods, services and consumer vehicles are financed by Eurofinas members, playing an integral role in supporting European consumers and businesses alike and the real economy.

At the European level, consumer credit activities are strictly governed by the Consumer Credit Directive (CCD), which provides a comprehensive product-specific framework. This is further complemented by the full EU consumer protection framework, including the Unfair Commercial Practices Directive, the Distance Marketing of Financial Services Directive, as well as substantial complementary frameworks at the national level.

As shown in the European Commission’s 2020 evaluation, the CCD has in many ways fulfilled its objectives of providing a high level of consumer protection and ensuring access to safe and simple credit solutions across the EU. Moreover, the framework has proven robust and able to respond to the current specific challenges brought on by the COVID-19 crisis.

The CCD is currently under review following an extended evaluation by the European Commission. Eurofinas is advocating that the goal of this initiative should be to maintain a proportionate and technology-neutral approach, support innovation and consumer benefit, and ensure adherence to the principle of same services, same risks, same rules and same supervision. This will allow for a future-proof framework enabling the right level of consumer protection and a level playing field between lenders.

We believe that the focus of the CCD review must be to address identified issues backed up by substantive data, supporting the notion that changes to the legislation are only required when proper and coherent enforcement of the existing framework is not sufficient to resolve the situation. As a vital instrument in the recovery and restart of the European economy after COVID-19, any changes to legislation must be carefully considered and justified to avoid jeopardizing the re-start of the European economy.