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CONSUMER CREDIT DIRECTIVE TRANSPOSITION - The European Coalition for Responsible Credit and Debt on our Doorstep have responded to the UK Government’s consultation on the implementation of the Consumer Credit Directive.
Below are extracts of, and links to the documents which ECRC have submitted to the UK Government for their transposition efforts. Other stakeholders may be interested in using these documents for their national discussions.



This response is submitted on behalf of the European Coalition for Responsible Credit and the UK group Debt on our Doorstep. Further details of both agencies can be found at and respectively.
In this paper we have focused our attention on the issues of creditworthiness and adequate explanations, which are inter-linked. A separate paper concerning the Right of Withdrawal is also being submitted. We welcome the opportunity to comment on BERR’s proposals to implement the Consumer Credit Directive, but are concerned that the consultation period has been curtailed to only 8 weeks from the usual 13. We would also like to express our dismay that there have been no open consultation meetings arranged by BERR as part of this exercise with consumer agencies including ourselves, whilst there has clearly been much more engagement (through specific industry working groups) with representatives of the credit industry. We would therefore welcome an opportunity for a detailed discussion with Civil Servants on the issues set out in this paper as soon as possible.

As part of the European Coalition for Responsible Credit we have previously set out our position on the fundamental aspects of creditworthiness and responsibility in lending as follows:

“The creditor or, where applicable, the credit intermediary shall especially seek to establish… the most appropriate type and total amount of credit taking into account the financial situation of the consumer, the advantages and disadvantages associated with the product proposed, and the purpose of the credit.”

Article 8, as is recognised in BERR’s consultation document, does not define creditworthiness or the phrase ‘sufficient information’ on which such an assessment is to be based. We therefore continue to press for the UK and other Member States to interpret Article 8 in a broad way, and to implement the Article to ensure that people, especially those on lower incomes who are often tempted to borrow because of a fundamental shortfall in their budgets, are protected against irresponsible lending practices by:

• Ensuring that the type of credit being offered is fit for the purposes to which the borrower intends to put it

• Ensuring that the borrower can afford to repay the credit by assessing the impact of the credit on the borrower’s overall financial position

We provide further details concerning both of these aspects in the remainder of this paper. In our view these aims should be placed at the heart of the implementing legislation concerning both creditworthiness and adequate explanations.

Read on at link below………



July, 2007, written by Damon Gibbons, Debt on our Doorstep, and Saul Schwartz, School of Public Policy and Administration, Carleton University

The Consumer Credit Directive recently passed by the European Council contains a provision that gives consumers fourteen days to withdraw from any credit agreement, without needing to give a reason. The idea of such a “cooling off” period is firmly based in the psychology of human decision-making. Within most of us lies an “impulsive” self that wants to buy a desirable commodity — a car, a TV, a night on the town — right now and a “planner self” that urges caution and further reflection. A right of withdrawal gives the “planner self” a chance to reverse the decisions of the impulsive self after the heat of desire has cooled. Moreover, a cooling off period can give a consumer a chance to seek out information about alternatives to the agreement under consideration if he or she has not already done so.

One might therefore think that the right of withdrawal in the new Consumer Credit Directive is a positive development in European consumer protection. Unfortunately, it is not.

Read on….

ID: 43056
Author(s): iff
Publication date: 10/06/09

Link to "Regulation" part of the ECRC website

Created: 10/06/09. Last changed: 10/06/09.
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