UE-DIRECTIVE CRÉDIT À LA CONSOMMATION – Une Nouvelle Version proposée par la Présidence allemande ! Aucune Amélioration dans le Fond mais des Détails intéressants : « La Reconnaissance mutuelle », et « le Crédit par l’Internet » sont abrogés ainsi que malheureusement « le prêt Responsable » ; « L'harmonisation maximale » obtient des échappatoires ; Le prêt prédateur et le surendettement ne sont pas encore quelques chose qui inquiète ; Des TEGs trompeurs sont encore tolérés ; « le crédit relié », le « bail », « les prêts sur fiche de paie », « le crédit par carte de crédit » et « les deuxièmes prêt hypothécaires » verront aucun ou un très léger régime. L’iff propose une amélioration importante de la vieille Directive 87/104 à la place d'essayer d’apprivoiser cette proposition actuelle pleine d’erreurs.
La proposition CDD (de mars 2007) et des commentaires y afférant sont annexés ci-dessous (en anglais seulement pour l’instant). |
INTRODUCTION
Trois Propositions de Loi totalement différentes pour une nouvelle Directive pour le crédit à la consommation ont déjà été distribués par la Commission européenne depuis 2002. ....... During their presidency Austria and Finland have added two others with a significant move of Austria to a more realistic APR which Finnland and now Germany abolished later. Rumours circulated in Brussels that the CCD is dead and Germany did not mention it in its presidential agenda. The new head of the Economic Committee in the Parliament insisted that the Parliament had never been in favour of maximum harmonisation and just as ECRC and nearly all consumer organisations emphasised that Brussels should put their draft to national competition with regard to consumer friendliness.
The sixth attack on national consumer protection is less vigorous but still made on the basis of a consumer unfriendly approach. It at least takes into consideration the critique of the former drafts.
At least one obvious false assumption in the draft of the Commission has been corrected. While inspite of no transborder commerce at all N. 14 of the deliberations stated that “The de facto and de jure situation resulting from those national differences leads to distortions of competition among creditors in the Community and obstacles to the internal market where Member States have adopted different mandatory provisions more stringent than those foreseen in Directive 87/102/EEC.” the German presidency has now adapted it to more realism by introducing the words “in some cases”.
But this is not enough to correct the generally unrealistic assumptions laid down in No 1-9 of the motives. It is up to social organisations to clean these assumption from believes that have no empirical foundation and insert those facts which under the threat of overindebtedness and predatory lending are presently discussed European-wide on the ECRC conference series.
GENERAL SITUATION
The Directive is lengthy (Art. 5 fills three pages) complicated (each norm has numerous exemptions hidden in different Articles (see Art. 2, 3 a), 6,7 …) using an imprecise unknown and not homogeneous legal language especially where crucial questions have to be decided (“compulsory/obligatory/required”; ”overrunning”, “ancillary capacity”, “commonly used in a Member State”, “ancillary service”, “adequate explanation” (but no advice)… ) “borrowing rate”) with contradicting definitions of the central “APR” (cost definition in Art.3g; cash flow definition in Art.14, 18), as well as of “linked products” (insurance that is “not linked” according to Art. 3f is treated as “linked” in Art. 15 No 3 and Art. 13 4a) creates an overflow of detailed information (three times again the same information requirements in Art. 4,5, 9), is not informed by the actual practice of predatory lending (no allusion to nonsense price disclosure (“from 4% on”) and price discrimination (“risked based pricing”), has no protection for guarantors, give a strange definition of intermediaries (only brokers that do this primarily see No. 13b of the deliberations but Art. 3e is totally unclear to this exemption), introduces early repayment charges (Art. 15 both options) which will make refinancing even more profitable, breaks (Art.21) the Minimum Harmonisation Principle for consumer protection in the EU Treaty but inserts enormous loopholes for all kind of credit and credit providers.
PERSISTING THREATS TO CONSUMER PROTECTION AND TO RESPONSIBLE CREDIT
• Small credit like payday loans, overdraft, credit card loans which are the generators of overindebtedness burden the weakest consumers with extortionate prices are either totally exempted from consumer protection (under 200 € each) or get a light regime which help them to misrepresent its burden. The crucial problem that either through parallel or through chain contracts (a phenomenon well known in labour law protection) turn many small credit into one big debt load (still regulated in the old directive) is not even mentioned any more. Typical credit card credit (Art. 2 g) is totally exempted in the first three month even if this is the typical method to force customers later into a costly prolongation.
• Second mortgages where the home is endangered by a security for ordinary consumer credit (car loans, etc) will be totally exempted. (Mortgage credit in general which needs even more transparency is totally exempted) (Art. 2 2a “secured either by a mortgage or by another comparable security commonly used in a Member State on immovable property”)
• Responsible lending has now been totally removed from the text of the Articles (while the deliberations still pretend to deal with “irresponsible lending”). Instead bankers are advised to check creditworthiness of their applicants using databases. (Art. 7a: “Obligation to assess the creditworthiness of the consumer“)
• Guarantors are not protected.
• Leasing is factually excluded. The supplier has just to write into the fine print that there will be no automatic transfer of property for the even worthless financed good at the end of the contract. (Art. 2 2 c) “leasing agreements where an obligation to purchase the object of the agreement is (not) foreseen either by the agreement itself or by any separate agreement”)
• Credit Unions (which for some critics often organise the collective egoism of better-off employees and discriminate against unemployed and poor people) are partially excluded (Art. 4 5.)
• Total harmonisation is still the principle. (Article 21 “Harmonisation and imperative nature of the Directive”: “Insofar as this Directive contains harmonised provisions, Member States may not maintain or introduce provisions other than those laid down in this Directive.”
o But a number of loopholes are opened which render this principle ineffective: like “Member States may determine …” (Art. 2 4. (social credit exemption) Art. 2 5. (deferred payment or repayment methods exemption) ; Art. 5 5. “Member States may adapt the manner by and extent to which this assistance is given …(“adapted to his needs” credit intermediaries obligation); Art. 13 6. “Member States may provide that paragraphs 1 to 4a of this Article shall not apply … (notary agreements); written form of the contract: Art. 9 1. “Additional requirements in the law of Members States regarding the validity of the conclusion of credit agreements shall remain unaffected.”
• Early repayment fees are newly introduced and now standardised without regard to national restrictions to damages (either between 0% /(last third of credit life time to 2% first third or 20 € (last year) to 1% (other time) (Art. 15). The regulation is economically senseless. It erects an obstacle to repayment of debts, favours usurious chain credit mechanisms, ignores economic mechanisms and erects credit cartels. Early repayment of credit leads by 99% to the taking out of a credit with the same or another supplier. Creditors in toto do not loose any credit opportunity at all. Only those who keep customers in uncompetitive credit contracts will loose to those who have better conditions on the market. The law wants to change this mechanism and give those a premium who have been able to tie customers into long term relations.
• Combined Savings and Credit that circumvent APR disclosure and according to most member states conflict with the present directive (and according to the German courts to existing German law) and which in addition make the customer’s right to early repayment economically non executable and inefficient (see the way French courts look upon it) are now officially acknowledged. The creditor just has to inform the customer that such a construction exists and that it has negative implications for stability of payments and in the case of early repayment (but not even for the price disclosure and its comparability to other credit itself).
• Overdraft no delay when cutting the credit frame but only for “objective reasons”
AMELIORATIONS IN THE DIRECTIVE (WITH CRITICAL COMMENTS):
• Amortisation Table required for instalment credit (Art. 9 2. g) which is the only responsible information which shows the future debt burden as well as the composition of each instalment. But it is too late to ask it only at the final contractual stage.
• Written form and personal signature as well as other specific requirements against to prevent irresponsible lending will be uphold by member states. Overindebtedness by mouse click with predatory lenders from countries where credit extension is free for everybody may still be in the hands of the country which later has to cope with these social problems. (Art. 9 1) But the door has been opened to pure internet credit. Countries like the Netherlands who already have introduced it show that nobody makes use of it because neither the electronic signature is present nor will serious providers use this kind of unconscionable credit.
• "European Consumer Credit Information" a standardised information sheet as it is practiced in the US as well as proposed by the voluntary code of conduct in mortgage loans will be prescribed and adapted not only by contents but also by form (including letter size etc Art. 6 1; Annex 3; Art. 9 2. last alinea) but it is totally overloaded with unnecessary information. It should be restricted to figures and indicators and reappear in the later contract (i.e. APR, sum of additional cost not represented in the APR; paid out credit in cash and/or refinanced sum, total amount of all payments due by the customer to the creditor or related services, size of monthly instalment, first and last date, cost in the first 6 month after default as a default interest rate, rate cap). This could be the basis of financial education in schools and in public.
• Variable rates are now indirectly regulated in so far as the creditor has to inform about a system which thus is prescribed. (reference rate, adaptation period, adaptation condition) But no mention of prepaid rate caps and how they should be treated in case of early termination.
• Overdraft has now to show the true APR (Art. 2 3.)
• Bank employer credit is no longer excluded (Art. 2 2 f)
• Right of withdrawal (Art. 13) within 14 days. This right is new for some countries but it will have no true effect. It remains basically unused because a the evil of the credit (repayment) comes after the good (out payment) and in all cases the clause of repayment of the capital “30 calendar days after having sent the notification” makes this right inefficient. A far more efficient way would be a rule under Art. 5 to a right of a binding offer for 14 days. This would cure the problems of “risked based pricing” (customer does not know what his effective price will be) as well as the reflection and comparison. It would create a true market and burden all alike.
QUESTIONABLE OR SUPERFLUOUS REGULATIONS
• Another Expert Committee (Art. 23a) Another committee shall be erected after DG Market installed FinUse and DG Consumer Protection founded their own financial advisory committee which are partly overlapping in membership a third committee is envisaged which will be involved in a formal process. This will further develop the expertocracy replacing democracy in Brussels without sufficient legitimacy. These committees mostly represent just persons that are experts through appointment or they represent organisations which are not truly member based and do not know election processes. The control has to be exercised in the memberstates and nowhere else. The problem is the independence of these committees, their resources and their relation to the bureaucracy in Brussels.
• Out of court settlement (Art. 23) As the duty to provide credit advice in the
old directive has been abolished one should wonder what this article shall achieve. In the light of the existing ombuds systems it should at least be regulated who such settlement could be organised, who should pay for it and how its independence and relation to the legal system should be arranged. There is not even the mention of the respective recommendation of the EU which once started with a quite a promising approach of asking for an truly independent body.
IFF CONCLUCIONS: TEN POINTS FOR REFORMING THE EXISTING DIRECTIVE
The council should abandon the present draft and get back to the existing Directive 87/102 with its later adaptations. In this Directives the present good regulations with regard to scope, advice, linked credit, minimum harmonization and calculation should be maintained and the following points should either be added or corrected
1. European Standardarised Consumer Credit Information Box: Create a standardized box where an absolute minimum of main figures characterizing the credit in the view of the consumer (see above) are reproduced. This standardization should be unchangeable through national legislation but not restrict additional information outside this box.
2. APR: One single APR definition based on the payments of both sides including all consumer payments where the linked service is especially tailored to the offered credit and distributed by the creditor himself or acting as an intermediary.
3. Advertising: Minimum information on cost on the basis of the most issued credit of this supplier so that fictive offers are excluded.
4. Revolving Credit: Restrict the circumvention of credit regulations through many small credits. Include all credit that that provides options to refinance, to prolong, to extend if assessed for one year with the “worst assumption” of taking out as much credit as long as possible. would not be free of charge and cross the ceiling of 200 €. Improve rights for credit draw downs.
5. Reflection time and Choice: A binding offer of 14 days where the exact price is mentioned.
6. Responsible Information: A standardized obligatory table indicating the mentioned figures and the duty to act responsibly with regard to the credit burden.
7. Guarantors: Extend the information duties to all guarantors
8. Employer credit: Restrict exclusion for employers who are professional creditors
9. Default rate: Limitation of default interest rate and cost to a maximum of the actual contractual interest rate.
10. Refinancing: Refinancing with the same supplier should not make the existing credit more expensive as far as no added value is offered. |
| ID: |
39521 |
| Auteur(s): |
iff |
| Date de parution: |
13/03/07 |
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Created: 14/03/07. Last Changes: 14/03/07.
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