In a
text adopted by the Internal Market and Consumer Protection Committee,
with 42 votes in favour, 1 against and 1 abstentions, MEPs say that
legislation should cover credit agreements of up to €150,000, with the
actual upper limit to be determined by the relevant national authorities
based on the particular economic situation in a member state. Member
states will also be able to apply limited changes to the obligations in
the case of small value loans of up to €200, loans granted interest-free
and without other charges, or loans that have to be repaid within three
months and with minor charges
Creditworthiness assessment
MEPs introduced further requirements to
assess the creditworthiness of people taking out a loan before it is
granted, including requiring information on a consumer’s current
obligations or cost of living expenses. In order to assess the
creditworthiness of consumers with little or no credit history, other
information can be taken into consideration, such as from non-banking
lenders, telecommunication providers and utilities.
However, data from social media and
health data should not be taken into account and the right to be
forgotten should be respected.
MEPs also agreed that The European Banking Authority
(EBA) should develop guidelines detailing how creditors and providers
of crowdfunding credit services perform this creditworthiness
assessment.
Clear consumer information
Consumers should always obtain standard
information so they can compare different offers, and understand the
legal and financial consequences of loans and credit costs. The
information should be shown upfront and in a clear way. Consumers should
be able to see all essential information at a glance, even on their
phone.
They should also be reminded that they
have the right to withdraw from the credit agreement or the agreement
for the provision of crowdfunding credit services without giving any
reason within a period of 14 calendar days.
Consumer protection
MEPs stressed that credit advertising
should contain, in all cases, a clear and prominent warning that
borrowing money costs money, and that it should not incite over-indebted
consumers to seek credit or suggest that success or social achievement
can be acquired thanks to credit agreements.
As overdraft facilities and credit
overrunning are increasingly common forms of consumer credit, MEPs want
to regulate these financial products in order to increase the level of
consumer protection and avoid over-indebtedness.
Next steps
Parliament negotiators are ready for
talks with the Council and the Commission on the final shape of the
rules, following plenary's green light.