EAPB Position Paper on Consumer Credit

31 January 2003

The European Association of Public Banks (EAPB) published a Position Paper on the forthcoming Consumer Credit Directive. Among others, the EAPB opposes the idea to extend the scope of the directive to credit and surety agreements. The latter should be exempted because the objective and the economic purpose of surety agreements are different from those of a credit agreement.

Furthermore, EAPB suggests that a minimum and maximum threshold of the current Consumer Credit Directive of between € 500 and € 50000 should be maintained. Otherwise small credit amounts would entail disproportionate costs, the Association argues.

EAPB also favours to remove promotional loans and credits secured by a mortgage from the scope of the directive. The association argues that there is no need to harmonise promotional loans, and credits secured by mortgages are of a fundamental different nature than the non- secured consumer credit.

Finally, the EAPB strongly opposes the principle of total harmonisation of the proposal. Total harmonisation entails extensive provisions and requirements on all aspects of the consumer credit. By doing so, the consumer credit will become overregulated with the consequence that credit costs will rise significantly and many products will disappear from the market.

Full Position Paper

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