WSBI ESBG

Consumer Finance

Empowering our members to offer innovative financial products to their customers

Consumer finance is a core activity of WSBI-ESBG members

Credit, mortgages and the way they are marketed and sold are important and for this reason, the Consumer Credit Directive, Mortgage Credit Directive and Distance Marketing in Financial Services Directive are given high priority status in our work. Our overall message is that the same products have to require the same rules by all lenders. New market entrants must be included within the scope of the lending rules, including crowdfunding and peer-to-peer lending.The Mortgage Credit Directive Review is expected in 2023 and a lot of preparatory work is already underway. ESBG believes that consumers should not be overloaded with information, and that only some info is needed before a contract is signed: total amount of credit, the repayment plan, the default interest rate, and information about the typical consequences for the borrower during the tenor of the contract in case of breaches of obligations. The creditworthiness assessment should not be harmonised across the Member States as national specificities (cost of living, taxes etc) must be taken into account. Foreign currency loans have been significantly reduced since the last review, due to (we believe) an error in the definition, which should be cumulative rather than either/or.

The Consumer Credit Directive Review is in full swing, and ESBG believes that a balance must be struck to allow credit lenders the room to continue lending, whilst ensuring high levels of consumer protection. We welcome the overall aim of the European Commission to strengthen consumer protection and include non-bank entities within the CCD so that credit is provided after appropriate assessment of a customer. However, these developments should not be to the detriment of consumers or banks in choosing financial products, and consumers should be guided through the process; given the necessary information without overburdening them. We believe that the creditworthiness assessment should remain as it is in the current text, that the right of withdrawal should have a maximum fixed end, and that notably the lower threshold of 200 EUR should be maintained.

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