Consumer Credit Directive officially adopted

[Amethyst]

Consumer Credit Directive officially adopted The Consumer Credit Directive has today (22 May) been published in the Official Journal (OJ) of the European Union.

This means that it has now been formally adopted. It will need to be implemented by Member States by May 2010.

Click here to view the OJ extract.

[Amethyst]

Re: Consumer Credit Directive officially adopted

http://www.experian.co.uk/www/pages/...ive_220508.pdf

Compliance - Consumer Credit Directive - Experian UK and Ireland

[Amethyst]

Re: Consumer Credit Directive officially adopted

Article 2
Scope
1. This Directive shall apply to credit agreements.
2. This Directive shall not apply to the following:
(a) credit agreements which are secured either by a mortgage
or by another comparable security commonly used in a
Member State on immovable property or secured by a right
related to immovable property;
(b) credit agreements the purpose of which is to acquire or
retain property rights in land or in an existing or projected
building;
(c) credit agreements involving a total amount of credit less
than EUR 200 or more than EUR 75 000;
(d) hiring or leasing agreements where an obligation to
purchase the object of the agreement is not laid down
either by the agreement itself or by any separate agreement;
such an obligation shall be deemed to exist if it is so
decided unilaterally by the creditor;
(e) credit agreements in the form of an overdraft facility and
where the credit has to be repaid within one month;
(f) credit agreements where the credit is granted free of interest
and without any other charges and credit agreements under
the terms of which the credit has to be repaid within three
months and only insignificant charges are payable;
(g) credit agreements where the credit is granted by an
employer to his employees as a secondary activity free of
interest or at annual percentage rates of charge lower than
those prevailing on the market and which are not offered to
the public generally;



(h) credit agreements which are concluded with investment
firms as defined in Article 4(1) of Directive 2004/39/EC of
the European Parliament and of the Council of 21 April
2004 on markets in financial instruments (1) or with credit
institutions as defined in Article 4 of Directive 2006/48/EC
for the purposes of allowing an investor to carry out a
transaction relating to one or more of the instruments
listed in Section C of Annex I to Directive 2004/39/EC,
where the investment firm or credit institution granting the
credit is involved in such transaction;
(i) credit agreements which are the outcome of a settlement
reached in court or before another statutory authority;
(j) credit agreements which relate to the deferred payment, free
of charge, of an existing debt;
(k) credit agreements upon the conclusion of which the
consumer is requested to deposit an item as security in
the creditor's safe-keeping and where the liability of the
consumer is strictly limited to that pledged item;
(l) credit agreements which relate to loans granted to a
restricted public under a statutory provision with a general
interest purpose, and at lower interest rates than those
prevailing on the market or free of interest or on other
terms which are more favourable to the consumer than
those prevailing on the market and at interest rates not
higher than those prevailing on the market.

3. In the case of credit agreements in the form of an overdraft
facility and where the credit has to be repaid on demand or
within three months, only Articles 1 to 3, Article 4(1), Article
4(2)(a) to (c), Article 4(4), Articles 6 to 9, Article
10(1), Article 10(4), Article 10(5), Articles 12, 15, 17 and
Articles 19 to 32 shall apply.

4. In the case of credit agreements in the form of overrunning,
only Articles 1 to 3, 18, 20 and 22 to 32 shall apply.



nb: (d) ‘overdraft facility’ means an explicit credit agreement
whereby a creditor makes available to a consumer funds
which exceed the current balance in the consumer's current
account;

[Amethyst]

Re: Consumer Credit Directive officially adopted

Pre-contractual information
1. In good time before the consumer is bound by any credit
agreement or offer, the creditor and, where applicable, the credit
intermediary shall, on the basis of the credit terms and
conditions offered by the creditor and, if applicable, the
preferences expressed and information supplied by the consumer,
provide the consumer with the information needed to
compare different offers in order to take an informed decision on
whether to conclude a credit agreement. Such information, on
paper or on another durable medium, shall be provided by
means of the Standard European Consumer Credit Information
form set out in Annex II. The creditor shall be deemed to have
fulfilled the information requirements in this paragraph and in
Article 3, paragraphs (1) and (2) of Directive 2002/65/EC if he
has supplied the Standard European Consumer Credit Information.
The information in question shall specify:

(see article)



(r) the consumer's right to be supplied, on request and free of
charge, with a copy of the draft credit agreement. This
provision shall not apply if the creditor is at the time of the
request unwilling to proceed to the conclusion of the credit
agreement with the consumer; and






..............





Article 6
Pre-contractual information requirements for certain credit
agreements in the form of an overdraft facility

....
(k) in the case of credit agreements as referred to in Article
2(3), information about the charges applicable from the
time such agreements are concluded and, if applicable, the
conditions under which those charges may be changed;
(i) the interest rate applicable in the case of late payments and
the arrangements for its adjustment, and, where applicable,
any charges payable for default;





4. However, in the case of voice telephony communications
and where the consumer requests that the overdraft facility be
made available with immediate effect, the description of the main
characteristics of the financial service shall include at least the
items referred to in points (c), (e), (f) and (h) of paragraph 1.

(thats the only bit compulsory for telephony overdraft )






PAGE 20 for calculations for repayments/drawdowns etc


Page 25 - prescribed terms for contracts (overdrafts)

Costs in the case of late payments You will be charged […… (applicable interest rate and
arrangements for its adjustment and, where applicable,
default charges)] for missing payments.

[Amethyst]

Re: Consumer Credit Directive officially adopted

Oxera report on CCD - April 2007 (PDF)

[Amethyst]

Re: Consumer Credit Directive officially adopted

– A direct increase in the cost of providing credit—in particular, the enforced duty to
advise and the requirement for credit providers to ensure that their customers re-sign
their credit agreements would add directly to the costs of providing credit. Overall, there
would be similar impacts across the product range. For example, by abolishing the
present exemption of overdrafts from the scope of the Directive, the draft Directive
would pose a real threat to the current flexibility enjoyed by users of overdraft
arrangements. The costs imposed by the Directive would tend to be fixed per
agreement, and so would have the greatest impact on those credit agreements where
the amount of credit drawn was the smallest.

[tomterm8]

Re: Consumer Credit Directive officially adopted

In many ways, this directive is based on British Consumer credit legislation, and I don't think it will make a really major effect on the law.