Consumer credit: Commission adopts revised proposal to facilitate agreement
European Commission - IP/05/1237 10/10/2005
Brussels, 10 October 2005
The European Commission today adopted a revised proposal for a directive on consumer credit which aims to level up the rights enjoyed by consumers across the EU, within a genuine single market for such services. The modified proposal is intended to take into account the European Parliament’s positions as expressed in its first reading and to facilitate agreement between Parliament and Council. Key changes to the Commission’s first amended proposal of October 2004 include a focus on real consumer credit (up to €50,000); mortgage credit will be addressed separately. The text also allows greater flexibility for Member States to adapt certain rules to their national situation, while ensuring the single market is respected through a ‘mutual recognition’ clause. Key consumer rights in the proposal include a 14-day right of withdrawal, a right to repay credit early and a right to break a credit agreement if the related purchase is cancelled.
Markos Kyprianou, Commissioner for Health and Consumer Protection, said: “This new draft maximises the benefits to consumers while keeping ‘red tape’ to a minimum. This Directive makes it simpler for consumers to compare the cost of credit and easier for industry to offer credit across borders. The changes we have made, which reflect many of the concerns expressed by MEPs, Council and our consultations with stakeholders, should also facilitate the adoption of the proposal next year.”
In October 2004, the previous Commission indicated which European Parliament amendments it could accept. In November 2004, the incoming Commission of President Barroso decided to undertake further consultations on the draft directive and produce a consolidated text that would facilitate agreement.
Key elements of the revised proposal include:
The draft law will now be debated in the Council of
Ministers, with a common position expected in 2006.