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Brussels, 15 June 2009

Financial services: Commission launches consultation on how to ensure responsible lending and borrowing in the EU

The European Commission has today launched a public consultation on "Responsible lending and borrowing in the EU". This initiative should be viewed in the context of the Commission's 4 March 2009 Communication 'Driving European Recovery" (see IP/09/351 ) where the Commission undertook to come forward with measures at EU level on responsible lending and borrowing. Views from all interested stakeholders are welcome by 31 August 2009.

Internal Market and Services Commissioner Charlie McCreevy said: "The financial crisis has shown the damage that irresponsible lending and borrowing practices can have on consumers, lenders, the financial system and the economy at large. We are therefore determined to learn from possible mistakes to ensure that lending and borrowing takes place in a responsible manner. This public consultation will allow the Commission to gather views and ideas on the extent of irresponsible behaviour and to assess which measures may be most appropriate."

Responsible lending, where the credit products sold are appropriate for consumers’ needs and are tailored to their ability to repay, and responsible borrowing, where consumers provide relevant, complete and accurate information on their financial conditions, are vital components in ensuring a stable and effective credit market.

Building on previous consultations and policy development in the area of retail financial services, and especially mortgage credit, this consultation seeks to strengthen and deepen the Commission services’ understanding of the remaining issues surrounding responsible lending and borrowing, and to contribute to the Commission's analysis of the varying policy options in this area. The consultation covers, amongst other things, the advertising and marketing of credit products, the pre-contractual information provided, ways to assess product suitability and borrower creditworthiness, advice standards, responsible borrowing and issues relating to the framework for credit intermediaries (e.g. disclosures, registration, licensing and supervision).

A public hearing on responsible lending and borrowing will be held on 3 September 2009 to discuss with stakeholders the most appropriate policy responses to the challenges faced by borrowers and the financial services industry, and to draw together the main conclusions from the consultation.

The Commission welcomes contributions from all interested stakeholders by 31 August 2009.

This consultation should also be viewed in conjunction with the parallel consultation on the report of the Expert Group on Credit Histories (see IP/09/921 ).

Further information can be found at:

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