Consumer Credit Reform: Focus on implementation

2023 marked the completion of the revision of the European consumer lending framework with the adoption of the new Consumer Credit Directive (CCD). A key priority for Eurofinas throughout the legislative process, the Federation has engaged extensively in negotiations to ensure that the new framework supports both enhanced consumer protection and proportionate, workable rules for lenders.

The revised CCD introduces several important updates aimed at modernising and harmonising the European consumer credit markets, including a broadened scope to encompass more products and players, adaptations of the rules to reflect the updated digital reality, stronger information requirements, and stricter creditworthiness assessment obligations to safeguard against consumer over-indebtedness.

With the political legislative phase concluded, attention is now fully on the critical implementation stage. Eurofinas is actively working with its national Member Associations to coordinate responses, share intelligence, and advocate for pragmatic solutions to support a smooth and timely transition.

The changes are intended to pave the way for a more level playing field, ensuring adherence to the principle of same activity, same rules, same supervision, and aiming to ensure that all credit providers are subject to equivalent regulatory standards, regardless of their business model or location. That being said, the implementation process is not without challenges. There are real risks that national implementation could lead to far-reaching and disproportionate rules, with Member States setting divergent requirements that go beyond what is set out in the agreed Directive.

By the end of 2025, EU Member States must have transposed the new rules into their national legislation, with the Directive becoming generally applicable one year later, in 2026. It is, however,  already clear that a number of Member States will face significant difficulties meeting the transposition deadline. Political instability, diverging legislative priorities, complex legal adaptations, and administrative constraints are contributing to a real risk of delayed and/or inconsistent implementation across the EU.

Building upon the CCD: revised guidance from the EBA

In parallel with the CCD implementation, the European Banking Authority’s (EBA) is gearing up to update its Guidelines on loan origination and monitoring.

The Guidelines, first issued in 2020, set out the EBA´s supervisory expectations, and the update of the Guidelines will be particularly important in the context of the revised CCD and its new rules on creditworthiness assessments and responsible lending obligations. An update will be prepared in light of the changes introduced by the new Consumer Credit Directive (CCD), as well as developments stemming from the Financial Data Access (FiDA) framework and the forthcoming payments rules under the Payment Services Regulation (PSR) and PSD3. The exact timing of this update will be confirmed once the relevant legislative processes have progressed further.

It is a further key priority for Eurofinas, together with its Member Associations, with the goal is to ensure that the updated Guidelines are proportionate, consistent with the CCD’s objectives, and operationally feasible for specialised lenders.