Consumer Credit stalemate ends - new Commission proposal is basis for agreement. Joachim Wuermeling MEP
After lengthy internal discussions, Markos Kyprianou, EU Commissioner on consumer protection has finally submitted a revised proposal on the consumer credit directive. According to the EP-rapporteur, Joachim Wuermeling (EPP-ED/CSU), the directive has been streamlined substantially. But even though the Commission had taken up many improvements suggested by Parliament in its first reading, the new draft is not entirely logical. Parliament's aim to guarantee that access to consumer credits shall be granted without bureaucratic obstacles will therefore remain.
Wuermeling pointed out that the Commission had limited the range of application of the directive. Thus specific types of consumer credits including mortgage credits and those above 50.000 Euro would not have fallen under the regime. By contrast, e.g. for credits below a minimum amount of 300 Euro, regulations would have still to apply. Parliament's goal to limit the directive's range of application clearly was thus not fulfilled, the German MEP said. Instead, the Commission sticks to the concept of full harmonisation in its new proposal although minimum standards would have been more useful - to take into account the very different structure of national credit markets. According to the EPP-ED-rapporteur, unnecessary obstacles for competition and product variety could thus be avoided, as well. However, the establishment of an internal market for consumer credits must be consistently pursued as a major part of the Lisbon-process, so that the directive does not restrict private consumption.
The principle of "credit responsibility" as endorsed by Parliament is now part of the directive. The Commission recognizes in the meantime, to a certain degree, that consumer responsibility exists. Thus the provision was removed which imposed upon the lender the duty to suggest the best suitable type of credit to an individual consumer. "Information and pre-contractual obligations of the lender still remain too extensive, in order to actually be useful to the consumer", Wuermeling said. It is now at least pleasing that after one year of stagnation, the proposal is finally on the table and can take its regular course in the legislative procedure. Shortly before his retirement, EU Commissioner David Byrne had presented a modified version of the original directive proposal in October 2004, which rather resembled "a chaotic accumulation of comments" than to a suitable basis for the further procedure. This "Byrne-Ballast" was now thrown out, according to the rapporteur, and the Council is now on the way to form its opinion. As the Commission took up only demands of the Parliament and made no new proposals, a repetition of the first reading is not necessary, Wuermeling concluded.
Translation from the original German
Joachim Wuermeling, MEP, +32 2 2845711 or +49 160 90462216
EPP-ED-Press Service, Knut Goelz, Tel.: +32 479 972144