The final round of talks between the Council and the Parliament on 10 January did not reach agreement, as the issue of early repayment remained the largest stumbling block. If the text to be voted upon by MEPs on Wednesday (16 January) does not find agreement in the Council it will have to go to conciliation. Parliament sources say this will be hard to avoid.
The new rules will harmonise the €800 billion consumer credit market, allowing European consumers to enjoy the same rights and information standards, as well as compare offers across the EU.
One of the main objectives of the directive is to protect consumers against taking on too much debt. In order to prevent this, the information given by the lender must allow the borrower to make a responsible decision and the lender must also assess the solvency of the borrower.
Moreover, the information to accompany the signing of the contract will make it easier to calculate and compare the total cost of loans by using an annual percentage rate of charge (APR) as a basis for calculations. Similarly, definitions of overdraft facilities will be standardised.
The directive also gives consumers the right to pay off their loans early and sets out rules on the calculation of compensation payments to the lender in such cases.
However, the level of harmonisation and the calculation of the compensation remains the main bone of contention in the talks between the Parliament and the Council.
