21 January 2003

EACB Position Paper on Consumer Credit Directive

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The European Association of Co-operative Banks (EACB) welcomes the initiative designed to enhance transparency, but stresses that these initiatives must not produce a disproportionate administrative burden that will curtail the lender’s operational orbit without improving the service provided to the borrower.

The EACB is worried about the legal implications inherent in the concepts of “responsible lending” and “joint and several liability”. It is also worried about the reversal of the burden of proof and that some of the Directive’s provisions are relatively vaguely worded.

The association welcomes the merits of defining the Annual Percentage Rate of Charge narrowly on the grounds that it will reflect costs directly related to the credit function as this gives borrowers the chance to compare different offers. But EACB also stresses its opposition to any provision that will open the door to the idea of retroactivity, the implementing conditions for which will be virtually impracticable, very costly and at variance with the logic that has inspired European legislation up until now.

EACB Position Paper

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