| CONSUMER EMPOWERMENT – The London Declaration was discussed! The ECRC and its views have featured in Commission consultation with EU consumers. |
Having now heard what the ECRC proposes to help solve the crisis, will the European Commission ensure that what consumer representatives would like to see implemented, actually does? (Below is the extract of last year's meeting):
Minutes of the European Consumer Consultative Group (ECCG)
8-9 December 2008
2. European Commission role in banking/financial crisis (ECCG2008 104-106)
The Commission (Ms Donnay, DG Economic and Financial Affairs) and Mr Oosterloo (DG Internal Market and Services) presented the various Commission initiatives undertaken in response to the banking/financial crisis.
• The majority of ECCG members highlighted the discrepancy between the urgency of saving banks and the lack of attention paid to consumer interests. They referred to the 'London Declaration' of the European Coalition for Responsible Credit and asked the Commission to do more for consumers. They were also critical of the communication handling of the crisis by public authorities. The Commission replied that the costs of not intervening to rescue banks would be much higher than the costs incurred by rescue plans. The Commission added that the European Economic Recovery Plan (EERP) is aimed at impacting on the real economy, including consumers. Several EU initiatives are specifically addressed to consumers e.g. in the area of deposit guarantee.
• Some ECCG members asked questions about lending practices. The Commission answered that it is examining lending practices in the EU. The Commission also adopted a proposal to revise the capital requirement directive. The Commission added that a proposal on credit rating agencies was adopted in November and is currently being discussed in the Council and Parliament.
• Some had specific concerns about the level and transparency of executives' pay. The Commission replied that Member States have specified clear conditions on executives’ pay in the endorsed rescue plans. The Commission is also looking at measures aimed at supervising bank governance, especially the level of executives' pay as well as specific pay structures which could trigger risky behaviours.
• Another member was positive with the approach of the White Paper on mortgage credit towards responsible credit. However, he expressed criticisms regarding the lack of clarity surrounding the decision to reinforce existing deposit guarantee schemes. Concerning this deposit guarantee scheme, the Commission noted that discussions in the Council so far were aiming at a EUR 50.000 guarantee as of June 2009 (with an increase to a maximum of EUR100.000 by end 2010).
• A member requested the Commission to react to the London Declaration which notably calls for the establishment of mortgage rescue funds to help borrowers restructure mortgages at affordable rates of interest. This member was also disappointed by the content of the consumer credit Directive, e.g. on responsible lending and marketing. He requested DG Health and Consumers to ensure a coordinated implementation of the consumer credit Directive bearing in mind the Council of Europe Recommendation on legal solutions to debt problems.
The Commission (Ms Minor, DG Health and Consumers) listed the different areas it is looking at to help consumers. The Commission said that the consumer credit Directive, while not perfect, includes some positive aspects such as pre-contractual information provisions which could inspire future initiatives on other financial products. The Commission will examine with Member States how they could use their margin of manoeuvre in the implementation of the Directive, e.g. regarding responsible lending. Some initiatives are being looked at in the field of financial education. A window of opportunity is also offered by the follow-up to the White Paper on mortgage credit. The Commission will also reconsider the idea of standard financial products (e.g. bank accounts). Finally, bearing in mind the risk of increased unfair commercial practices, reduced product quality and safety, the Commission will focus activities on enforcement and market monitoring in 2009.
Follow-up discussion and report from the ECCG sub-group on financial services at the subsequent ECCG meeting of 24-25 March is not yet available to the public |
| ID: |
42816 |
| Author(s): |
ECRC |
| Publication date: |
30/04/09 |
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Created: 30/04/09. Last changed: 30/04/09.
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