Consumer credit across the EU is a step closer
Posted, January 16, 2008 @ 17:00
A single market for consumer credit is a step closer today after MEPs approved the second reading of the Consumer Credit Directive.
The Directive, which has been subject to a number of amendments adopted by the European Parliament in Strasbourg this afternoon, aims to reduce the differences in national legislation on consumer credit to facilitate cross-border loans.
Two out of three Europeans use credit to buy goods like furniture, washing machines or cars. Yet markets in consumer credit are still national.
The Directive should make it easy for banks and other financial institutions to offer loans in other EU countries. At the same time, consumers will have improved and comparable information on conditions including the right to cancel and the right to pay off a loan early, to help them find the best deals. However, following concerns over costs, Conservatives in the European Parliament have worked hard to avoid the burden of unnecessary detail in advertising and contract information.
The proposal also aims to avoid excessive debt and ensure a high level of consumer protection.
Internal Market and Consumer Protection Spokesman Malcolm Harbour MEP said it will be crucial to monitor the new legislation against developments in the market once the Directive has been adopted.
He said:
"This proposal is extremely important for European consumers. We want a financial services market with innovative products, but we also want a well regulated market. In fact, good regulation encourages innovation.
"The difficulty with this Directive was the diversity of national markets. Member States are at very different stages of development.
"The package we have adopted today represents a vast improvement on the original Commission proposal, which to our dismay was never supported by an impact assessment. We have tried to strike the right balance between ensuring a high level of consumer protection across the EU and reconciling the different national traditions."