WRITTEN QUESTION E-1636/01 by Juan Naranjo Escobar (PPE-DE) to the Commission. Single market in mortgages.
Date: 2001-06-12
Institutions: European Parliament, Provisional data
Subjects: EC recommendation, code of conduct, consumer information, consumer protection, mortgage, real estate credit

4.4.2002

EN

Official Journal of the European Communities

C 81 E/43

past it ignored a similar judgment by the same court condemning it in the Loizidou case of 1996, can the
Council say:

1. What direct action it intends to take to ensure respect for the judgments of the European Court of

Human Rights by Turkey?

2. What will be the consequences of Turkey(cid:146)s behaviour in violating its commitments to the European
institutions in respect of its prospects of accession to the European Union, and what specific form will
these consequences take in the European Union(cid:146)s political and economic relations with Turkey?

Reply

(29 November 2001)

The EU has no authority to take direct action to enforce judgements by the European Court of Human
Rights. But it does take every opportunity, not least in its enhanced political dialogue with Turkey, to press
on it the need to respect all its international commitments, not least on human rights, including decisions
by the European Court of Human Rights.

Turkey is well aware that compliance with the Copenhagen political criteria is a prerequisite for the
opening of accession negotiations and that membership of the Union requires compliance with all the
Copenhagen criteria. The EU has set out its priorities in this regard in the Accession Partnership for
Turkey (1), which includes the guaranteeing of rights and freedoms laid down in the European Convention
for the Protection of Human Rights and Fundamental Freedoms and ensuring their implementation, as an
integral part of the acquis communautaire.

The Accession Partnership has also a conditionality clause on the basis of which Community assistance for
financing projects through the pre-accession instruments for Turkey is conditional on respect by Turkey of
its commitments under the Association Agreement, customs union and related decisions of the EC-Turkey
Association Council, for example on the trade regime for agricultural products. At this stage, further steps
towards satisfying the Copenhagen criteria and in particular progress in meeting the specific priorities of
this Accession Partnership in 2001 need to be taken.

(1) OJ L 85, 24.3.2001.

(2002/C 81 E/054)

WRITTEN QUESTION E-1636/01

by Juan Naranjo Escobar (PPE-DE) to the Commission

(12 June 2001)

Subject: Single market in mortgages

The standardisation of rules on mortgages which will take place when the new European code of conduct
on loans is adopted will significantly alter the European market in mortgages.

This code, already endorsed by financial institutions and consumers, is now awaiting adoption by the
Fifteen, who may submit their comments or amendments.

Can the Commission explain the present state of play on the matter and state whether Member States will
be expected to give their approval by a given date, so that we can finally have a single market in
mortgages despite the excessive protectionism concerning internal markets being exhibited by some
Member States?

C 81 E/44

Official Journal of the European Communities

EN

4.4.2002

Answer given by Mr Bolkestein on behalf of the Commission

(3 September 2001)

The Commission brought
together European Credit Sector Associations and European Consumer
Organisations in an attempt to have them agree on the terms of a Voluntary Code of Conduct on Pre-
Contractual Information for Home Loans. The negotiations were successfully completed, after more than
three years, and a Voluntary Code of Conduct was signed by the negotiating parties on 5 March 2001. The
Agreement is between industry and consumers and is as such not to be adopted by Member States.

The Commission also gave its political backing to the Voluntary Code of Conduct.

It therefore issued a Recommendation (1) that endorses the Code and invites:

(cid:129) Lenders offering home loans, regardless of whether they are members of

the associations and
federations who negotiated the Code, to comply with the Recommendation and, consequently, the
Code;

(cid:129) Member States to take all necessary steps in order that any pre-contractual information laid down in
national legislation and additional to the pre-contractual information of the Code may be merged with
the information included in the European Standard Information Sheet of the Code in a manner that
does not impair comparability across borders.

The aim is to improve consumer protection and to make it easier for consumers to compare the relative
merits of similar products offered by different home loan lenders. It lays down the obligation for lenders to
provide consumers with general information as to the different types of products offered, the types of
interest rate (fixed, variable or combinations thereof), all additional costs associated with taking up
mortgage credit, etc (cid:133) It also provides for a personalised breakdown of a consumer(cid:146)s personal liabilities
that details the exact amount of each instalment, the total amount that will be paid over the full term of
the mortgage, the possibility and conditions for early repayment for the particular mortgage credit formula
chosen by the individual consumer, etc. in a standardised document (European Standardised Information
Sheet ESIS), that allows the consumer to compare easily between the offers made by different home loan
lenders, potentially across borders.

Home loan lenders have six months to register their intention to comply with the Code and up to 12
months to implement the necessary measures. Therefore, adhering home loan lenders should comply with
the terms of the Code and the Recommendation no later than 30 September 2002. The same deadline
applies to Member States in case they have national legislation including pre-contractual information that
has to be merged with the information included in the Standard Information Sheet.

The Commission has set up a central register to keep track of the lenders that notify their adherence to the
Recommendation and the Code. This central register will be published on Directorate general Internal
Market(cid:146)s website by the end of September 2001.

In a separate yet connected exercise the Health and Consumer Protection Directorate general has entered
into early consultation with (cid:145)stakeholders(cid:146) (national experts, representatives of consumers and industry with
Parliament committees observing) about a revision of the 1987 Consumer Credit Directive (2). A Discussion
Paper is on the DG website (3). One theme is the sustainability of the current distinction between
(unsecured) consumer credit and (secured) real estate or (cid:145)mortgage credit(cid:146)/home loans in the light of the
increasing role of (cid:145)mortgage-backed(cid:146) consumer credit. The analysis of this problem will be made with the
effectiveness of the Code in mind.

(1) C(2001)477 final, on 1.3.2001.
(2) Council Directive 87/102/EEC of 22 December 1986 for the approximation of

the laws, regulations and

administrative provisions of the Member States concerning consumer credit, OJ L 42, 12.2.1987.

(3) http://europa.eu.int/comm/consumers/policy/developments/cons_cred/cons_cred1a_en.pdf.