Est. 2min 11-01-2008 (updated: 28-05-2012 ) bank_people_03.jpg Euractiv is part of the Trust Project >>> Languages: Français | DeutschPrint Email Facebook X LinkedIn WhatsApp Telegram The outcome of next week’s Parliament vote on the consumer credit directive remains unclear after negotiations with the Council failed, fuelling speculation that the disputed bill will face a last-chance ‘conciliation’ procedure. 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. Read more with Euractiv Commission shies away from regulating mortgage creditsIn a long-awaited decision, the Commission has opted against proposing a new directive to regulate mortgage credits for now, but is still seeking to increase competition and offers for consumers across member states. Subscribe now to our newsletter EU Elections Decoded Email Address * Politics Newsletters Positions European Consumers' Organisation BEUC warned MEPs not to water down consumer protection rules. BEUC found that provisions were much too vague, particularly on early repayment. "We have been waiting for five years for legislation to put an end to the numerous problems which consumers are facing on a daily basis. Unless MEPs change their approach, this directive will prove useless," declared Monique Goyens, director general of BEUC. The Parliament's rapporteur for the consumer credit directive, Kurt Lechner (EPP-ED), seriously questioned the usefulness of the directive as it currently stands. According to Lechner, the rules voted in by the committee impose an overload of information and bureaucracy and will result in higher prices for consumers. However, he conceded that increasingly harmonised rules would bring benefits for the banking sector by facilitating their cross-border operations. The European Federation of Buidling Societies (EFBS) urged MEPs in a statement to exclude modernisation and renovation credits from the scope of the directive. "It is not understandable that consumers are encouraged to reduce CO2 emissions of their homes on the one side, if on the other side they shall according to EU legislation con consumer credit pay more for financing these measures," EFBS Managing Director Andreas Zehnder said. BackgroundOn 10 December, the Parliament's committee on internal market and consumer protection (IMCO) passed some 236 amendments to the proposed directive, which was initially proposed by the Commission in 2002. Consumer credit rates currently range from 6% in Finland to 12% in Portugal. Two out of three Europeans use credit to buy furniture, a washing machine or a car, yet few European consumers are likely to reap the benefits of harmonised rules, as consumer credit remains a local business, with less than 1% of transactions currently carried out across borders. Timeline 15 Jan. 2008: Debate on the consumer credit directive in Parliament. 16 Jan. 2008: Vote in Parliament in second reading. Further ReadingEU official documents Parliament:Report by MEP Kurt Lechner(12 December 2007) [FR] [FR] [DE] Parliament:A Europe-wide market in consumer credit(11 December 2007) [FR] Council:Credit agreements for consumers(21 May 2007) Council:Competitiveness Council press release(21 May 2007) Commission:Consumer Commissioner Kuneva welcomes Member States decision to back new rules on consumer loans(21 May 2007) [FR] [FR] [DE] Commission:Consumer Affairs: Council Reaches Political agreement on Consumer Credit Directive(15 May 2007) [FR] [FR] [DE] NGOs and Think-Tanks BEUC:Consumer Credit: Consumers at risk(8 Januar 2008) Press articles Euractiv.tr:Tüketici kredileri yönergesinin kaderi hala belirsiz(11 January 2008)
