Activities of Chris MACMANUS related to 2021/0171(COD)
Shadow opinions (1)
OPINION on the proposal for a directive of the European Parliament and of the Council on consumer credits
Amendments (36)
Amendment 92 #
Proposal for a directive
Recital 44
Recital 44
(44) Credit offers or credit sales that have not been solicited by the consumers may in some cases be associated with practices that are harmful to the consumer. In this regard, Member States shall prohibit (i) unsolicited sales of credit, including non- requested pre-approved credit cards sent to the consumers, or the unilateral increase of a consumers’ overdraft or credit card limit, should be prohibitedand (ii) unsolicited credit offers, including visits by the creditor or credit intermediary to the consumer’s place of residence or place of employment, on the occasion of which a credit offer is made to the consumer, without the prior express consent of the consumer; and the creditor or credit intermediary sending to a consumer, by any means of communication, a credit offer, a credit contract, or a payment instrument, without the prior request or express consent of the consumer or a pre-existing legal or contractual obligation.
Amendment 100 #
Proposal for a directive
Recital 46
Recital 46
(46) It is essential that the consumer’s ability and propensity to repay the credit is assessed and verified before a credit agreement or an agreement for the provision of crowdfunding credit services is concluded. That assessment of creditworthiness should be done in the interest of the consumer, to prevent irresponsible lending practices and over- indebtedness, and should take into consideration all necessary and relevant factors that could influence a consumer’s ability to repay the credit as well as a consumer’s ability to afford the credit. Member States should be able to issue additional guidance on additional criteria and methods to assess a consumer’s creditworthiness, for example by setting limits on loan-to-value or loan- to-income ratios.
Amendment 101 #
Proposal for a directive
Recital 47
Recital 47
(47) The assessment of creditworthiness should be based on information on the financial and economic situation, including income and expenses, of the consumer. The European Banking Authority Guidelines on loan origination and monitoring (EBA/GL/2020/06) provide guidelines on what categories of data may be used for the processing of personal data for creditworthiness purposes, which include evidence of income or other sources of repayment, information on financial assets and liabilities, or information on other financial commitments. Personal data, such as personal data found on social media platforms or health data, including cancer data, should not be used when conducting a creditworthiness assessment. Consumers should provide information about their financial and economic situation in order to facilitate the creditworthiness assessment. In principle, cCredit should only made available to the consumer where the result of the creditworthiness assessment indicates that the obligations resulting from the credit agreement or the agreement for the provision of crowdfunding credit services are likely to be met in the manner required under that agreement. However, should such assessment be negative, the creditor or the provider of crowdfunding credit services can exceptionally make credit available in specific and justified circumstances such as when they have a long-standing relationship with the consumer, or in case of loans to fund exceptional healthcare expenses, students loans or loans for consumers with disabilities. In such case, when deciding on whether or not to make the credit available to the consumer, the creditor or the provider of crowdfunding credit services should take into account the amount and the purpose of the credit, and the likelihood that the obligations resulting from the agreement will be met.
Amendment 108 #
Proposal for a directive
Recital 47 a (new)
Recital 47 a (new)
(47a) Member States shall ensure that the creditworthiness assessment and corresponding re-payment plans are tailored to the borrower’s specific profile and repayment capacity, including in the case of the most vulnerable consumers. In particular, where a creditor or a provider of crowdfunding credit services fulfils a social purpose as required by national law, the specificities of the loan such as its nature, maturity and interest rate, as well as the re-payment plan should fit the borrower’s specific profile. Creditors should be held liable and be subject to appropriate penalties in case of a breach of the requirements surrounding the creditworthiness assessment. Consumers should have access to proportionate and effective remedies including compensation for damage suffered by the consumer. Those remedies should be without prejudice to the application of other remedies available to consumers under Union or national law.
Amendment 173 #
Proposal for a directive
Article 7 – paragraph 2 (new)
Article 7 – paragraph 2 (new)
Advertising of credit agreements shall not be personalised. Only standardised offers may be advertised, without using any data relating to a user to tailor it to a specific time, circumstance or situation.
Amendment 187 #
Proposal for a directive
Article 8 – paragraph 2 – point a a (new)
Article 8 – paragraph 2 – point a a (new)
(aa) In case of a consumer credit with a promotional zero percent interest rate for the first 30 days of the loan duration, any penalty charges due during that period if payments are not made on time and any changes to the interest rate after the 30- day promotional period ends;
Amendment 188 #
Proposal for a directive
Article 8 – paragraph 2 – point f a (new)
Article 8 – paragraph 2 – point f a (new)
(fa) a prominent, clearly visible warning to make consumers aware that borrowing costs money, using the words “warning: borrowing money costs money”. Powers are delegated to the European Commission to adopt and, where necessary, amend regulatory technical standards to stipulate the exact wording, presentation and format of the warning under Article 8 (fa). Those regulatory technical standards shall be adopted in accordance with Articles 10to 14 of Regulation (EU) No 1093/2010. The European Banking Authority (EBA) shall develop draft regulatory technical standards to stipulate the exact wording, presentation and format of the warning under Article 8 (fa) for submission to the Commission by XX. EBA shall review, and if necessary, develop further draft regulatory technical standards for submission to the Commission for the first time by XX and every two years thereafter.
Amendment 225 #
Proposal for a directive
Article 10 – paragraph 7
Article 10 – paragraph 7
Amendment 240 #
Proposal for a directive
Article 12 – paragraph 2
Article 12 – paragraph 2
Amendment 248 #
Proposal for a directive
Article 14 – paragraph 2
Article 14 – paragraph 2
Amendment 253 #
Proposal for a directive
Article 14 – paragraph 3
Article 14 – paragraph 3
Amendment 256 #
Proposal for a directive
Article 14 – paragraph 4
Article 14 – paragraph 4
4. By way of derogation from paragraph 1 Member States may allow creditors or providers of crowdfunding credit services to require the consumer to hold a relevant insurance policy related to the credit agreement or crowdfunding credit services, taking into account proportionality considerations. In such cases, Member States shall ensure that the creditor or the provider of crowdfunding credit services is required to accept the insurance policy from a supplier different to his or her preferred supplier where such insurance policy has a level of guarantee equivalent to the one the creditor or the provider of crowdfunding credit services has proposed, without modifying the condition of the credit offering to the consumer. In addition, creditors or providers of crowdfunding credit services should not be permitted to offer a relevant insurance policy related to the credit agreement of crowdfunding credit services before a 7-day cooling off period in order to ensure that the consumer is able to compare offers.
Amendment 259 #
Proposal for a directive
Article 16 – paragraph 4 – subparagraph 1
Article 16 – paragraph 4 – subparagraph 1
4. Member States may shall prohibit the use of the terms ‘advice’ and ‘advisor’ or similar terms when the advisory services are being marketed and provided to consumers by creditors or, where applicable, credit intermediaries or providers of crowdfunding credit services. Where Member States do not prohibit the use of the terms ‘advice’ and ‘advisor’ or similar terms, they shall impose the following conditions on the use of the term ‘independent advice’ or ‘independent advisor’ by creditors, credit intermediaries or providers of crowdfunding credit services providing advisory services:(a) creditors and, where applicable, credit intermediaries or providers of crowdfunding credit services shall consider a sufficiently large number of credit agreements or crowdfunding credit services available on the market; (b) credit intermediaries shall not be remunerated for the advisory services by one or more creditors. Point (b) of the second subparagraph shall apply only where the number of creditors considered is less than a majority of the market. Member States may impose more stringent requirements for the provision of advisory services use of the terms ‘independent advice’ or ‘independent advisor’ by creditors and, where applicable, credit intermediaries or providers of crowdfunding credit services
Amendment 287 #
Proposal for a directive
Article 18 – paragraph 1
Article 18 – paragraph 1
1. Member States shall require that, before concluding a credit agreement, or an agreement for the provision of crowdfunding credit services, the creditor or, where applicable, the provider of crowdfunding credit services makes a thorough has made a positive assessment of the consumer’s creditworthiness. That assessment shall be done in the interest of the consumer, to prevent irresponsible lending practices and over-indebtedness, and shall take appropriate account of factors relevant to (i) verifying the prospect of the consumer to meet his or her obligations under the credit agreement or the agreement for the provision of crowdfunding credit services and(ii) the risk to the consumer of not being able to meet his/her obligations.
Amendment 290 #
Proposal for a directive
Article 18 – paragraph 1 – subparagraph 1 a (new)
Article 18 – paragraph 1 – subparagraph 1 a (new)
The creditor shall make reasonable allowances for committed and other non- discretionary expenditures such as the consumers’ actual obligations, including appropriate substantiation and consideration of the living expenses of the consumer and his/her household. The assessment shall ensure that the agreed credit does not put the consumer in financial difficulty and allows the consumer to maintain a minimum standard of living. The creditor shall make prudent allowances for potential negative scenarios in the future, including for example, a reduced income; or where applicable, an increase in the borrowing rate or negative change in the exchange rate, or deferred payments of principal or interest. Member States shall ensure that credit intermediaries accurately transmit to the creditor information obtained from the consumer so that the creditworthiness assessment can be carried out.
Amendment 293 #
Proposal for a directive
Article 18 – paragraph 2 – subparagraph 1
Article 18 – paragraph 2 – subparagraph 1
2. The assessment of creditworthiness referred to in Article 8 shall be carried out exclusively on the basis of relevant and accurate information on the consumer’s income and expenses and other financial and economic circumstances which is necessary and proportionate such as evidence of income or other sources of repayment, information on financial assets and liabilities, or information on other financial committhe following information: – Evidence of identification - – Evidence of residence - – Where applicable, information on the purpose of the loan – Where applicable, evidence of eligibility for the purposes of the loan – Evidence of employment, including the type, sector, status (e.g. full- time, part-time, contractor, self-employed) and duration – Evidence of income or other sources of repayment (including annual bonus, commission, overtime, where applicable) covering a reasonable period, including payslips, current bank account statements, and audited or professionally verified accounts (for self-employed persons) – Information on financial assets and liabilities, e.g. savings account statements and loan statements indicating outstanding loan balances – Information on other financial commitments, such as child maintenance, education fees and alimonies, if relevant – Information on household composition and dependants – Evidence of tax status – Where applicable, evidence of life insurance for the named borrowers – Where applicable, data from credit registers or credit information bureaux or other relevant databases, covering the information on financial liabilities and arrears in payment – Information on the collateral, if any – Evidence of ownership of the collateral – Evidence of the value of the collateral – Evidence of insurance of the collateral – Information on guarantees, other credit risk mitigating factors and guarantors, if any – Rental agreement or evidence of potential rental income for buy-to-let loans, if any – Permissions and cost estimates, if applicable, for real estate building and improvement loans – the household general budget data of the borrower The information taken into account shall be necessary, sufficient and proportionate to assess the re-payment capacity of the consumer, in line with the data minimisation principle of Regulation (EU) 2016/679 (GDPR). In addition, the information taken into account shall be relevant, up-to-date, complete and accurate. Data other than the categories of data listed above, and in line with Article 9(1) of the GDPR, data on racial or ethnic origin, political opinions, religious or philosophical beliefs, or trade union membership, data concerning health or data concerning a natural person's sex life or sexual orientation shall not be processed nor used to perform creditworthiness assessments. The information shall be obtained from relevant internal or external sources, including the consumer and, where necessary, but not exclusively, on the basis of a consultation of a database referred to in Article 19. subject to the consumer’s prior information by the creditor and consent in line with the GDPR, and the consumer’s payment account, subject to the consumer’s consent as defined in Directive (EU) 2015/2366 on payment services in the internal market (PSD 2). The information obtained cannot only be based on consumer declarations and should be accompanied by supporting evidence. Appropriate checks are required where necessary through reference to independently verifiable documentation.
Amendment 313 #
Proposal for a directive
Article 18 – paragraph 4 – subparagraph 2
Article 18 – paragraph 4 – subparagraph 2
Amendment 340 #
Proposal for a directive
Article 21 – paragraph 1 – subparagraph 1 – point v a (new)
Article 21 – paragraph 1 – subparagraph 1 – point v a (new)
(va) w) the relevant contact details of debt-advisory services and a recommendation for the consumer to contact such services in case of re- payment difficulties.
Amendment 346 #
Proposal for a directive
Article 23 – paragraph 1 – subparagraph 1
Article 23 – paragraph 1 – subparagraph 1
1. Member States shall require that the creditor or the provider of crowdfunding credit services inform the consumer of any change in the borrowing rate, on paper or another durable medium chosen by the consumer at least seven days, before the change enters into force.
Amendment 347 #
Proposal for a directive
Article 24 – paragraph 1 – introductory part
Article 24 – paragraph 1 – introductory part
1. Where a credit has been granted in the form of an overdraft facility, Member States shall require that the creditor, throughout the duration of the credit agreement, keeps the consumer regularly informed, i.e. at least once a month, by means of statements of account, on paper or on another durable medium, containing the following elements:
Amendment 350 #
Proposal for a directive
Article 24 – paragraph 2 – subparagraph 1
Article 24 – paragraph 2 – subparagraph 1
2. Where a credit has been granted in the form of an overdraft facility, Member States shall require that the creditor informs the consumer, on paper or another durable medium at least seven days before, of increases in the borrowing rate or in any charges payable, before the change in question enters into force.
Amendment 353 #
Proposal for a directive
Article 25 – paragraph 2 – subparagraph 1 – introductory part
Article 25 – paragraph 2 – subparagraph 1 – introductory part
2. In the event of a significantn overrunning exceeding a period of one monthtwo weeks, Member States shall require that the creditor informs the consumer without delay, on paper or on another durable medium, of all of the following:
Amendment 356 #
Proposal for a directive
Article 25 – paragraph 3 a (new)
Article 25 – paragraph 3 a (new)
3a. Any fees charged for overrunning shall not exceed 0.5% of the amount overrun by. Creditors should ensure that the consumer is informed of these fees in line with all relevant provisions of this Directive.
Amendment 376 #
Proposal for a directive
Article 29 – paragraph 4 – point b
Article 29 – paragraph 4 – point b
(b) the creditor may exceptionally claim higher compensation if the creditor can prove that the loss suffered due to early repayment exceeds the amount determined in accordance with paragraph 2. However, this compensation should not exceed the amount of interest that the consumer would have paid during the period between the early repayment and the agreed date of termination of the credit agreement.
Amendment 377 #
Proposal for a directive
Article 30 – paragraph 2 – subparagraph 1 a (new)
Article 30 – paragraph 2 – subparagraph 1 a (new)
The annual percentage rate of charge must also take into account the costs and charges for any additional insurance or other financial products that are either sold with, recommended for sale with or proposed for sale with the credit product.
Amendment 382 #
Proposal for a directive
Article 31 – title
Article 31 – title
Caps on interest rates, annual percentage rate of charge and the total cost of the credit to the consumer
Amendment 391 #
Proposal for a directive
Article 31 – paragraph 1 – point a
Article 31 – paragraph 1 – point a
Amendment 407 #
Proposal for a directive
Article 32 – paragraph 1 – subparagraph 1 – point e a (new)
Article 32 – paragraph 1 – subparagraph 1 – point e a (new)
(ea) promoting the sale of goods or services, covered by a linked credit agreement
Amendment 410 #
Proposal for a directive
Article 32 – paragraph 2 - subparagraph 1 a (new)
Article 32 – paragraph 2 - subparagraph 1 a (new)
Member States shall prohibit remuneration policies contingent upon the interest rate or cost of the credit, or the type of credit product subscribed.
Amendment 414 #
Proposal for a directive
Article 32 – paragraph 4
Article 32 – paragraph 4
4. Member States shall ensure that where creditors, credit intermediaries or providers of crowdfunding credit services provide advisory services the remuneration structure of the staff involved does not prejudice their ability to act in the consumer’s best interest and is not contingent on sales targets. In order to achieve that goal, Member States mayshall also ban commissions paid by the creditor to the credit intermediary.
Amendment 424 #
Proposal for a directive
Article 35 – paragraph 1 – introductory part
Article 35 – paragraph 1 – introductory part
1. Member States shall require creditors to have adequate policies and procedures so that they make efforts to exercise, where appropriate,exercise reasonable forbearance before enforcement proceedings are initiated. Such forbearance measures shall take into account, among other elements, the consumer’s circumstances and may consist in, among other possibilities:
Amendment 430 #
Proposal for a directive
Article 35 – paragraph 1 a (new)
Article 35 – paragraph 1 a (new)
Amendment 431 #
Proposal for a directive
Article 35 – paragraph 2
Article 35 – paragraph 2
Amendment 443 #
Proposal for a directive
Article 36 – paragraph 1
Article 36 – paragraph 1
Member States shall ensure that debt advisory services are made available to consumers free of charge and independent.
Amendment 444 #
Proposal for a directive
Article 36 – paragraph 1 a (new)
Article 36 – paragraph 1 a (new)
Member States shall ensure that creditors systematically refer consumers experiencing or likely to experience financial difficulties, to the nearest debt- advice service available in their area. The European Commission should within two years of implementation of this Directive, produce a report providing an overview of the availability of debt-advice services across Member States, including their structure and financing models, and identify best practices for the further developments of such services.
Amendment 462 #
Proposal for a directive
Article 41 – paragraph 8 a (new)
Article 41 – paragraph 8 a (new)
8a. Member States may apply national legislation to grant product intervention powers to national competent authorities to withdraw products with a high default rate.