Home Retail banking Customers Credits & loans Consumer credit directive makes progress  


18 january 2008

Consumer credit directive makes progress

Negotiations on the proposed consumer credit directive forged ahead in 2007, with the EU Council adopting a common position in September that is defi nitely a step in the right direction and which includes abandoning the mutual recognition rule and excluding all types of property loans. The banking industry pursued its efforts to have other key aspects of the directive improved.


The compromise draft adopted by the EU Parliament on 16 January 2008 marks an important step toward the integration of retail banking in Europe. It provides a high level of protection for consumers and enables them to take full advantage of competitor credit offerings.

The new directive :

  • Applies to consumer loans of more than 200 euros and less than 75,000 euros (the initial ceiling was 100,000 euros).
  • Harmonises pre-contractual information and the calculation of the cost of credit using the total annual percentage rate of charge.
  • Sets the withdrawal period to 14 days. For tied sales, this period may be shortened at the consumer's request in countries where this is already allowed, as in France.
  • Harmonises the right of early repayment and sets a maximum indemnity for this.

Throughout these negotiations the FBF defended a pragmatic approach and full harmonisation of the key points most needed to facilitate the comparison of cross-border offerings, while ensuring fair competition and without deteriorating lending conditions at the national level.

Top of the page