Opinion of the European Economic and Social Committee on the "Proposal for a Directive of the European Parliament and of the Council on the harmonisation of the laws, regulations and administrative provisions of the Member States concerning credit for consumers" (COM(2002) 443 final — 2002/0222 (COD))
Date: 2003-07-17
Institutions: European Economic and Social Committee
Subjects: approximation of laws, consumer credit, consumer protection

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II

(Preparatory Acts)

ECONOMIC AND SOCIAL COMMITTEE

401st PLENARY SESSION, 16 AND 17 JULY 2003

Opinion of the European Economic and Social Committee on the ‘Proposal for a Directive of the
European Parliament and of the Council on the harmonisation of the laws, regulations and
administrative provisions of the Member States concerning credit for consumers’

(COM(2002) 443 final — 2002/0222 (COD))

(2003/C 234/01)

On 8 October 2002 the Council decided to consult the European Economic and Social Committee, under
Article 95 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 25 June 2003. The rapporteur was
Mr Pegado Liz.

At its 401st Plenary Session of 16 and 17 July 2003 (meeting of 17 July), the European Economic and
Social Committee adopted the following opinion by 91 votes to one with one abstention.

SUMMARY

ensuring that opting for total harmonisation does not
lead to a potential fall in the level of consumer protection,
presently guarded against by retaining a minimum clause.

While recognising that a Commission initiative to review the
directive on consumer credit is appropriate — and, indeed,
overdue — and while agreeing that it is necessary, given the
changes which have occurred in the fields it sets out to regulate
and in the objectives set, the European Economic and Social
Committee cannot support adoption of the proposal as it
stands:
it must firstly be radically amended, principally on
account of the need to:

The most important aspects which, in the EESC’s view, need
to be adjusted to meet the proposal’s aims, concern:

— the legal basis on which the directive is to be adopted;

— ensure it is compatible with the provisions of other
Community legislative instruments dealing with related
matters;

— its scope, with regard both to what is included and what

is excluded;

— carry out a detailed simulation of the impact of every
aspect of the proposed measures, especially regarding
progress in completing the single market in financial
services and boosting consumer confidence;

— fine-tune several of

the suggested provisions in the
light of the principles of proportionality and necessity,

— the way in which the total harmonisation method is used
without guaranteeing maintenance of a high level of
consumer protection;

— the failure to take account of over-indebtedness, assuming
that matters can be resolved with an inappropriate and at
times disproportionate list of information obligations,
leaving aside others which are effectively essential;

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— the need to flesh out the structure, functioning and

guarantees concerning the use of centralised databases;

1.1.2.
lowing:

The Commission points, in particular, to the fol-

as well as a series of technical legal issues which are examined
(albeit non-exhaustively) in the relevant points below.

a)

b)

the need to include new forms of consumer credit which
did not exist in 1987;

the need for a realignment of the rights and obligations
of both consumers and credit providers;

c)

technical problems in penetrating other markets.

1.

Introduction: purpose of the directive

1.1.3.

The Committee, for its part, has identified:

1.1.
The proposal submitted by the Commission to the
European Parliament and the Council, and for which referral
to the Committee for an opinion is mandatory under Article 95
of the Treaty, arises from the need to revise Directive 87/
102/EEC of 22 December 1986, subsequently amended by
Directives 90/68/EEC of 22 February 1990 and 98/7/EC of
16 February 1998.

1.1.1.
Civil society and the Member State authorities have
long pointed to a series of reasons by the 1987 directive needs
to be revised (1). Some of these reasons are acknowledged in
the explanatory memorandum of the proposal itself, while
others have been set out in a number of ESC reports and
opinions (2).

( 1) Occasions on which the need for revision were stated include:

— Hearings with government experts and with consumer organ-
isations on 4 and 5 July 2001 respectively, Brussels (Borschette
Centre);

— Hearing promoted by the ESC, Stockholm, 18 July 2001;
— Conference held by the Italian Consiglio Nazionale dei Consu-

matori e degli Utenti, Milan, 2 July 2001;

— Colloquium on Consumer Credit and Community Harmonis-
ation held by the Belgian EU Presidency, Charleroi, 13 and
14 November 2001.

( 2) Among the most important:

— Information Report on Household over-indebtedness;
— Opinion on Household over-indebtedness, (OJ C 149 of

21.6.2002);

— Opinion on the Proposal for a Directive amending Directive

87/102/EEC (OJ C 337 of 31.12.1988);

— Opinion on the Green Paper – Financial services: meeting

consumers’ expectations (OJ C 56 of 24.2.1997);

— Opinion on the Proposal for a Directive on certain legal
aspects of electronic commerce (OJ C 169 of 16.6.1999);
— Opinion on the Report on the operation of Directive 90/88
and the Proposal for a Directive amending Directive 87/102/
EEC (as modified by Directive 90/88/EEC) [COM(96) 79 final],
(OJ C 30 of 30.1.1997);

— Opinion on the Proposal for a Directive on the distance
marketing of consumer financial services (OJ C 169 of
16.6.1999).

a)

the increase in the volume of consumer credit;

b)

the rising level of over-indebtedness;

c)

d)

e)

f)

discrepancies between national regulations and practices
in applying the 1987 directive and its modifications;

the inability of the directive’s provisions to ensure that
real consumer credit costs (APR) can be effectively
compared;

the lack of Community-level definition of parameters for
identifying usury and possible means of preventing and
combating it on a uniform basis;

the need to make the rules compatible with recent
directives on cross-border transfers (Directive 97/5/EC of
27 January 1997), electronic commerce (Directive 2000/
31/EC of 8 June 2000) and distance selling of financial
services (Directive 2002/65/EC of 23 September 2002).

1.1.4.
These shortcomings, together with others in the
Community arrangements for consumer credit, have been
considered as giving grounds for concern by the Member
States and civil society, because they:

a)

b)

c)

result in glaring differences in the level of consumer
protection, and undermine consumer confidence in the
single market in financial services;

distort competition and destabilise the European credit
market;

are an obstacle to the smooth operation of the internal
market in financial services .

1.2.
The EESC therefore agrees with the proposal’s primary
aim of ‘paving the way for a more transparent market, a more
effective market and to offer such a degree of protection that
the free movement of offers of credit can occur under the best
possible conditions both for those who offer credit and those
who require it’.

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Consumer credit’s importance to developing the internal
market requires firstly, that rules of conduct for the various
players be devised, based on fairness and transparency and
secondly, that correct and full mutual information require-
ments be introduced for both sellers and consumers.

g) more detailed information for consumers both prior to,
and at the time of, concluding a contract, bringing it into
line with the provisions of Directives 2000/31/EC of
8 June 2000 on electronic commerce and 2002/65/EC of
23 September 2002 on distance marketing of consumer
financial services (Articles 6, 10 and 21);

1.3.
The Committee also agrees with the fundamental
guidelines set out in the initiative, which can be summarised
as follows:

a)

better definition of the directive’s scope;

b) minimisation of risk for credit providers;

c)

better information for consumers and their guarantors;

d)

e)

fair sharing of responsibilities between consumers and
professionals;

establishment of common rules on recovery of unpaid
debts.

1.4.
The Commission proposes that the following principal
innovations, reflecting the above guidelines, be introduced to
the existing arrangements with a view to achieving the
objective set:

the aim of total harmonisation guaranteeing a high level
of protection for consumers and ensuring an identical
scheme in the different Member States (Articles 1 and
30);

h)

i)

j)

k)

l)

a ban on the use of securities (bills of exchange, promiss-
ory notes or pre-dated cheques) to underpin the credit
(Article 18);

a duty to provide advice to consumers on the different
types of credit available (Article 6(3));

a right of withdrawal within fourteen days, from the day
on which a copy of the credit agreement is transmitted to
the consumer (Article 11);

compulsory existence of, and access to, a central database
in all the Member States recording payment defaults, and
the subsequent obligation upon credit institutions to
consult the database before granting credit (Article 8);

liability on the part of the creditor for non-supply, partial
supply or failure to supply in conformity with the relevant
contract, whenever the supplier of goods is also a credit
intermediary (Article 19);

m)

the establishment of a list of unfair terms specific to
consumer credit agreements (Article 15), as previously
recommended by the EESC (1).

an extension of the scope of the provisions to guarantors
and credit
intermediaries (Article 2(d) and (f) and
Articles 10, 23, 28 and 29);

2. General comments

the scope to include all

forms of
an extension of
consumer credit and surety, whether personal or real,
including agreements promising to grant credit and credit
for the supply of services, but excepting mortgage credit
for the purchase of private housing (Article 2(b) and (e)
and Articles 3 and 5);

the concept of ‘responsible lending’ (Article 9) to make
financial institutions responsible for assessing the con-
sumer-borrower’s ability to meet their commitments, and
for informing consumers, or their guarantors, of the
assessment;

an explicit ban on negotiating credit agreements outside
business premises (Article 5);

The Committee agrees with the innovations to the
2.1.
consumer credit system in the areas listed above, which
represent:

progress in comparison with the arrangements under
2.1.1.
Directive 87/102/EEC, even following the amendments made
by Directives 90/88/EEC and 98/7/EC;

2.1.2.
a significant improvement in the way instruments
and means of conveying information to creditors, borrowers
and guarantors are defined;

a new formula for calculating the APR (Article 12), fully
covering the total cost of the credit, in order to ensure
transparency and comparability;

(1) Opinion on the Report from the Commission on the implemen-
tation of Directive 93/13/EEC of 5 April 1993 (OJ C 116 of
20.4.2001), and the Opinion on Consumers in the insurance
market (OJ C 95 of 30.3.1998).

a)

b)

c)

d)

e)

f)

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2.1.3.
special care taken in identifying and incorporating
the different types of credit now available to consumers,
although these could be improved;

2.1.4.
great accuracy with which key concepts such as ‘total
lending rate’, ‘borrowing rate’ and ‘sums levied by the creditor’
have been defined, although the large number of concepts may
confuse consumers and be detrimental to transparency of
information;

2.1.5.
efforts made to establish a method for calculating
the APR making it effectively transparent and comparable
between all the Member States;

2.1.6.

a curb on exclusions from the established scheme;

clearer establishment of a duty on the part of
2.1.7.
the creditor to provide information for the consumer and
guarantor;

2.1.8.
a decision to completely ban the use of bills of
exchange, promissory notes or cheques as a form of surety in
credit agreements.

2.2.
However, the Committee regrets that the Commission
has failed to take the opportunity to go further in achieving its
objective and implementing its own guidelines, in areas which
it considers to be equally vital, such as:

2.2.1. more detailed definition of the nature and operating
methods of the databases for payment defaults, establishing
uniform rules guaranteeing consumers’ rights — right of
consultation, right of correction, clear and unequivocal individ-
ual authorisation, limitations on the scope for the use of data,
etc.;

2.2.2.
an explicit obligation for all forms of commercial
communication regarding consumer credit to indicate the APR
and other essential features defining the type of credit granted;

2.2.3.
an attempt to classify some consumer credit agree-
ments, harmonising all the different arrangements for granting
credit, and covering certain methods such as the direct debit
system, combining consumer credit with authorisation for
standing orders;

2.2.4.1.
Usury means an interest rate which is abnormally
higher than the legally established rate, or is incompatible with
the principles of honesty and fairness in commercial affairs or
of public policy and good practice, or which is imposed by
exploiting the difficult situation of the person requesting the
loan.

2.2.4.2.
As a constituent part of the legal structures govern-
ing the organisation of the market economy, regulation of
usury is considered to be a matter of public policy by the
Member States. It also forms an integral part of the general
Community interest. Ultimately, creditors must comply with
the current law of usury of the country where the consumer
resides, particularly in the case of cross-border contracts. In
view of the public policy nature of rules governing usury,
conflicts between the law of the various Member States could
arise.

2.2.4.3.
Opponents of moves to harmonise the rules gov-
erning usury argue that compliance with the duty of infor-
mation on the part of creditors, particularly regarding infor-
mation on the rate of interest actually applied, is adequate
since it puts consumers in a position to make a choice. In
practice, however, usury occurs in cases where consumers do
not enjoy freedom of choice. It is also argued that regulating
usury may constitute a market restriction, depriving those
consumers who most require it of credit. Nevertheless, con-
sumers in difficulty must be protected from dishonest creditors.

2.2.4.4. Moreover, the gap between different interest rates
has tended to narrow with the introduction of the single
currency, facilitating harmonisation of legislation in this area.

The EESC therefore believes that this aspect of the
2.2.4.5.
market should be regulated through action at Community
level, in order to prevent distortions and restrictions affecting
competition. It considers that setting interest rates ceilings for
the various types of consumer credit may be the most effective
means of achieving this.

2.2.5.
Lastly, the EESC recalls the need for special conditions
to be provided for disabled consumers in an integrated fashion.

2.2.4.
determining EU-level criteria for defining maximum
interest rates and what constitutes usury, using identical
variables but not necessarily the same absolute amounts.

This is an important question which merits further examin-
ation, for the reasons set out below.

2.3.
The EESC would take this opportunity to alert the
Commission to the need to introduce robust consumer
protection measures in the area of mortgage credit for the
purchase of private housing for long-term residence, which
accounts for more than 70 % of the volume of consumer
credit.

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2.4.
In addition, the EESC must voice its disagreement with
the form in which certain solutions are presented and situations
are envisaged, as these do not match the original objective.

2.4.4. More robust advice measures are needed, providing
proper means for less literate or financially-astute consumers.

This applies in the following cases.

Firstly, the legal basis for the adoption of the proposal
2.4.1.
is not
(Treaty Article 95). The proposal, by its nature,
exclusively concerned with the completion of
the single
market, and the basis should rather be the current Article 153
of the Treaty which, while including measures for the com-
pletion of the internal market, extends to the protection of
consumers’ economic interests.

2.4.2.
Also the way in which complete — meaning full and
binding — harmonisation is to be achieved, without use of a
regulation and without ensuring the highest possible level of
protection for consumers,
leaving the Member States the
option of whether or not to take implementing measures in
key areas such as:

a)

b)

inversion of
and 33);

the burden of proof

(Articles 30(1)(b)

inclusion in advertising material of borrowing rates, total
lending rates and APR (Article 4);

c)

penalty provisions (Article 31);

d)

e)

the content of
and 30(1)(a));

the central databases (Articles 8(4)

compulsory provision of a copy of the credit agreement
for
its validity
(Article 10(1));

the consumer as a

condition of

thereby creating the conditions for real disparities between
national legal systems, which could lead to market distortions
and varying levels of consumer protection.

2.4.3. Moreover, the general thinking behind the proposal
is that ‘consumer protection’ is the same thing as ‘consumer
in contrast with the EESC’s consistent view
information’,
that while consumer information is essential,
it must be
accompanied by active forms of protection and defence for
consumers. This means that unless such measures are explicitly
included, proper consumer protection can only be achieved by
retaining minimum clauses, possibly in relation to certain as
yet unspecified aspects of the directive.

2.4.5.
There is also insufficient mention of over-indebted-
ness (1), as if it was entirely unconnected with consumer credit
and could be resolved purely by fulfilling the information
requirements imposed by the proposal. However, it is known
that the Commission’s persistent unwillingness to press for-
ward with proposals for legislative harmonisation in this field
is aggravating disparities between national systems, and this
hampers effective completion of the internal market. Such
disparities will become all the more obvious with the accession
of new Member States, where the phenomenon is on the rise.

The continued possibility of

imposing an early
2.4.6.
repayment indemnity is similarly unacceptable, with no precise
definition of the terms under which such an indemnity may
be determined, and the Member States left to specify what
constitutes a ‘fair and objective [indemnity] calculated on the
basis of actuarial principles’ (Article 16). As well as widely
differing treatment of consumers, this may even result in a
distorted credit market between different countries.

2.4.7.
The EESC cannot accept the definition in general of
parameters which, since total harmonisation is involved,
cannot be exceeded by the Member States, and which set levels
of consumer protection lower than those already practised by
certain Member States — as, for example, with the obligation
to return the sum with interest in the event of exercise of the
right of withdrawal, or with the lifting of the obligation to
mention the APR in advertising material.

2.4.8.
Furthermore, the proposal contains some provisions
aiming at making credit intermediaries liable in certain situ-
ations: it does so, however, in a haphazard and unsystematic
manner.

2.4.8.1.
The EESC considers that regulation of credit inter-
mediaries is a priority, and should be accomplished in the
same way as has been done for insurance intermediaries (2).

(1) The subject of the EESC opinions referred to in footnote 2.
(2) Directive 2002/92/EC of the European Parliament and of the
Council of 9 December 2002 (OJ L 9 of 15.1.2003, p. 3). The
EESC drew up an opinion on the proposal for this directive (OJ
C 221 of 7.8.2001).

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2.4.8.2.
There are a number of reasons for this position.
The first is the fact that intermediaries occupy an important
place in the consumption process, since they mediate relations
between the creditor and the consumer. Another is that the
way credit intermediaries are regulated varies widely between
the Member States’ legal systems.

Moreover, there is no consensus in the case-law of Europe’s
national courts regarding the liability of intermediaries, par-
ticularly in the area of electronic commerce and distance sales.

2.4.9.
Turning to the scope of the directive, the removal of
the minimum threshold below which credit would not be
subject to the proposed rules is unacceptable, since this could
for
act as a deterrent to granting consumer micro-credit
essential goods or services. The directive’s requirements are
out of proportion to the interests involved.

The Committee therefore suggests that the prin-
2.4.9.1.
ciple set out in Article 1(2) of the previous directive be
reinstated, establishing EUR 500 as the limit below which the
directive would not apply.

2.4.10.
If the contractual arrangements governing some
types of consumer credit, such as leasing contracts, are to be
retained in the directive, they require a provision enabling
certain effects flowing from the proposed regime to be adjusted
in line with their specific legal nature. This concerns areas such
as the right of withdrawal, calculation of
the
amortisation table, early repayment or repossession in the
event of non-compliance with the contract.

the APR,

2.5.
Lastly, there are solid grounds for believing that some
of the proposal’s provisions, or at least possible interpretations
of them, may be incompatible with the provisions of other
directives, particularly those concerning data protection, dis-
tance selling, electronic commerce, distance marketing of
financial services and unfair terms. This aspect requires detailed
and specialist legal analysis.

3. Specific comments

3.1. Definitions

offering credit agreements, undertaking other preparatory
work for such agreements, or concluding such agreements’.

3.1.2. D e f i n i t i o n

o f

s u r e t y

a g r e e m e n t

( A r t i c l e 2 ( e ) )

It should be made clear that the surety agreement may be
incorporated into the credit agreement itself. This is not at
present clear.

3.1.3. D e f i n i t i o n

o f

d r a w d o w n

( A r t i c l e 2 ( m ) )

The concept of drawdown should apply to the moment at
which the amount of credit is actually drawn down, not the
moment the credit is made available to the consumer.

3.2.

Scope (agreements excluded)

3.2.1.
Article 2(2)(c).

Delete the expression ‘in a single payment’ from

3.2.2.
Article 3(2)(d) should be deleted, or should state
explicitly that the conditions set out under (i), (ii) and (iii) are
cumulative.

3.3.

Information prior to the agreement

3.3.1. A d v e r t i s i n g ( A r t i c l e 4 )

This should include an obligation to indicate the APR and total
lending rate in all
forms of commercial communication
regarding consumer credit.

3.3.2. B a n o n n e g o t i a t i o n o f c r e d i t a g r e e -
p r e m i s e s

b u s i n e s s

o u t s i d e

m e n t s
( A r t i c l e 5 )

3.1.1. D e f i n i t i o n

o f

c r e d i t

i n t e r m e d i a r y

( A r t i c l e 2 ( d ) )

This should specify that the prohibition refers exclusively to
unsolicited offers.

The definition of a credit intermediary under this article should
be worded as follows:

3.3.3.

P r i o r i n f o r m a t i o n ( A r t i c l e 6 )

‘“credit intermediary” means a natural or legal person who,
for a fee, habitually acts as an intermediary by presenting or

The exception contained in Article 6(4) should be
3.3.3.1.
deleted. At the very least, the ambiguous expression ‘in an
ancillary capacity’ should be clarified.

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3.3.3.2.
In Article 6(1) and (2), replace ‘se necessário’ with
‘se for caso disso’ (applies to the Portuguese version, not to the
English version).

3.4.4.1.
The EESC suggests that this provision be brought
into line with the revised Basle Agreement, setting down a
for keeping data, except where the consumer
time-limit
expresses a wish for data to be destroyed immediately.

3.3.3.3.
In the second paragraph of Article 6(2), replace the
expression ‘its advantages, and any drawbacks’ with ‘and its
important and characteristic aspects’.

3.5. Responsible lending (Article 9)

In Article 6(3), replace ‘eventualmente’ with ‘se for
3.3.3.4.
casso disso’ (applies to the Portuguese version, not to the
English version).

3.5.1.
The expression ‘parte-se do princípio de’ is not legally
precise and should be replaced with ‘presume-se’, reversing the
burden of proof (applies to the Portuguese version, not to the
English version).

3.3.3.5.
The words ‘advantages and disadvantages associ-
ated with the product’ should be replaced with ‘relevant aspects
and characteristics of the product’ (Article 6(3)).

3.5.2.

The following sentence should be added:

‘It
is also assumed that both the consumer and the
guarantor have accurately portrayed their financial situ-
ation’.

3.4. Consultation of the central database (Article 8)

3.6.

Information that must be included in credit and surety
agreements (Article 10)

3.4.1.
The directive must clearly set out the consequences
of failure to consult or take account of the data contained in
the database, in terms of the creditor’s liability (1), in order to
guarantee that the consultation is effectively compulsory.

Compulsory supply of a copy of the contract to the
3.6.1.
consumer should be established as a condition for the
contract’s validity.

The existence of micro-credit

3.4.2.
should also be
acknowledged by defining a minimum threshold for compul-
sory consultation of the database as an alternative in the event
that the minimum threshold recommended in point 2.4.9.1
above is not accepted.

The obligation to inform the consumer of the result
3.4.3.
of any consultation should be accompanied by the right of
correction by the consumer, with appropriate sanctions in the
event of non-compliance.

3.4.4.
Immediate and automatic destruction of the data
received may hamper the definition of customer profiles and
make it impossible to suggest the most appropriate products.

( 1) Cf.

in this regard Bernd Stauder,

‘La consécration légale d’un
devoir de diligence du donneur de crédit’ [‘Enshrining credit
providers’ duty of care in law’], in ‘La responsabilité du donneur de
crédit aux particuliers’, Observatoire du Crédit et de l’Endettement,
Belgium, October 1996, and ‘La prévention du surendettement
du consommateur: la nouvelle approche de la LCC 2001’ in ‘La
nouvelle loi
fédérale sur le crédit à la consommation’, Ed.
CEDIDAC No 51, Lausanne, 2002.

3.7. Right of withdrawal (Article 11)

In Article 11(1), the expression ‘transmitted to the
3.7.1.
consumer’ should be replaced with ‘received by the consumer’.

The period should only be counted from the confirmed date
of receipt.

3.7.2.
The wording of Article 11(3) must be clarified,
particularly regarding the possibility of returning the goods:
this only seems to make sense in terms of credit linked to the
sale of goods.

The rule under which the purchase contract must
3.7.2.1.
not be subject to the effects of withdrawal from the credit
agreement is accepted in principle, but there must be safe-
guards against fraud by bogus consumers.

The decision to retain ownership of the goods
3.7.2.2.
the withdrawal period has elapsed,
being financed until
regardless of
the transfer of physical possession to the
consumer, is prejudicial to the rule of transfer of ownership
because of the bilateral nature of the contract and is not in
keeping with the principle of subsidiarity which governs this
matter.

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It would be preferable to make exercise of
the right of
withdrawal from the credit agreement subject to proof of
in question or of effective
prior payment of
reimbursement of the credit if it was provided directly to the
purchaser-consumer of the object.

the object

3.8.

Early repayment (Article 16)

Under the proposal, consumers may still be required
3.8.1.
to pay an indemnity, which is not defined with the necessary
clarity and objectivity.

3.10.

Performance of a surety agreement (Article 23)

3.10.1.
It is necessary to make it clearer that the expression
‘take action’ means to request a court order. The deadline
should also be reduced to 30 days.

3.10.2.
Neither are there grounds in the third paragraph
for limiting the amount guaranteed to the outstanding balance
and arrears: it should be possible for the surety to cover any
amount which the consumer may have to face as a conse-
quence of failure to comply with the contract (e.g. costs of
enforcing an order).

3.8.1.1.
the possibility of demanding any indemnity whatsoever.

The Committee’s preferred solution is to remove

3.11. Total harmonisation (Article 30)

If this does not occur, it must be stipulated that the
3.8.1.2.
possibility of demanding an indemnity for early repayment be
stated in advance in the credit contract, and must relate
exclusively to the cost of setting up and management credit,
the risks on the lender’s
spread over all the repayments,
refinancing rate and the risk of having to reinvest capital at a
lower rate, in addition to stipulating only low penalties where
a new credit is drawn up for the purposes of repaying a
previous credit.

3.11.1.
The issue of total harmonisation and the conditions
under which the EESC could agree to this approach were
addressed in the general comments above.

The Committee would simply point out that, in
3.11.2.
accordance with point 3.13 below regarding Article 33,
Article 30(1)(b) should be deleted.

3.12.

Penalties (Article 31)

3.9.

Joint and several liability (Article 19)

3.12.1.
general comments above.

The question of penalties was discussed in the

3.9.1.
The provisions of the article should be supplemented
with those of the current Article 11(2) of Directive 87/102/
EEC (1).

3.12.2.

However, the following:

In Article 19(2), replace ‘compensar’ with ‘indemniz-
(applies to the Portuguese version, not to the English

3.9.2.
ar’
version).

( 1) ‘2

The consumer shall have the right to pursue remedies

against the grantor of credit where:
a)

in order to buy goods or obtain services the consumer
enters into a credit agreement with a person other than the
supplier of them; and
the grantor of the credit and the supplier of the goods or
services have a pre-existing agreement whereunder credit is
made available exclusively by that grantor of credit to
customers of that supplier for the acquisition of goods or
services from that supplier; and
the consumer referred to in subparagraph (a) obtains his
credit pursuant to that pre-existing agreement; and
the goods or services covered by the credit agreement are
not supplied, or are supplied only in part, or are not in
conformity with the contract for supply of them;
the consumer has pursued his remedies against the supplier
but has failed to obtain the satisfaction to which he is
entitled’.

b)

c)

d)

e)

‘These penalties must be effective, proportionate and
constitute a deterrent. They may provide for the loss of
interest and charges ...’

should be replaced with the following:

‘These penalties must be effective, proportionate and
constitute a deterrent, and they must provide for the loss
of interest and charges ...’.

3.13. Burden of proof (Article 33)

3.13.1.

In Article 33,

‘Member States may provide that the burden of proof ...’

should be replaced with

‘Member States must provide that the burden of proof ...’.

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C 234/9

4. Conclusions

4.1.
The proposal for a directive comes in response to a
series of expectations and needs relating to consumer protec-
tion,
including an extension of the scope to cover surety
agreements, the supply of new forms of credit, together with
clarification of key concepts in credit, which it is believed can
help boost consumer confidence in the single financial services
market.

4.2.
The EESC regrets, however, that the revision was not
preceded by a simulation to gauge its impact in market terms
(volume of transactions, amounts and types of credit, etc.), on
both the demand and supply sides.

4.8.
It is unacceptable that the information obligations
imposed upon credit providers should relieve them of liability
towards consumers: the duty of information does not represent
the full extent of consumer protection.

4.9.
The EESC recommends that implementation in the
single market of the arrangements contained in the draft
directive be backed by a commitment to training, specially
geared to credit
intermediaries in general and traders in
it should also relate to consumers,
particular. However,
especially those with a lower level of awareness; here, personal-
ised advice and education from the earliest school years are
crucial to understanding the mechanisms and consequences
of using consumer credit, especially in terms of prudent
management of household budgets.

4.3.
Neither does the EESC agree that the proposal, like
Directive 87/102/EEC, should view the completion of the
single market as its main concern, envisaging consumer
protection only insofar as it can foster free movement of credit
supply, and not taking it as an end in itself but merely a means
of developing the internal market.

4.10.
It also recommends that the impact study outlined in
point 4.2 above be extended to the accession countries. It
suggests that the study, to be carried by the Commission and
submitted to the EESC and the European Parliament, comprise
the following aspects:

4.3.1.
be taken as the legal basis for the proposal.

The EESC therefore suggests that Treaty Article 153

4.4.
At the same time, a number of individual measures are
welcomed. They concern over-indebtedness, particularly the
principle of responsible lending, the duty to provide advice,
regulation of the right of withdrawal, the duty to provide an
amortisation table, and regulation of out-of-court recovery
procedures.

— the economic impact of the proposed arrangements on

the banking sector, trade and industry;

— the impact on consumers, especially from disadvantaged

groups;

— an examination of the impact of the proposal on the

possible development of cross-border trade.

4.5.
An opportunity has, however, been missed to go
further: practical measures could have been introduced to
handle declared cases of over-indebtedness.

The decision to seek full harmonisation only merits
4.11.
support
it entails effective alignment with the highest
if
possible level of consumer protection and does not lead to a
real reduction in consumer safeguards; in other words, in
contrast to the present proposal.

4.6.
The proposal continues to leave a large area of credit
unregulated; it lays down no rules on usury, leaves types of
contract undefined, and credit intermediaries remain free of
liability.

The EESC also suggests that the minimum clause be
4.12.
retained, accompanied by a precise definition of the areas
where the Member States can provide more effective protection
of consumers in credit agreements.

4.7.
Certain aspects even represent a step back from the
previous arrangements, particularly the lifting of the obligation
to state the APR in advertising, which prevents consumers
from comparing credit costs before beginning negotiations.
Moreover, many aspects of the proposed arrangements as a
whole offer less protection than current practice in some
Member States.

4.13.
In brief, it is recommended that the Council and the
Member States do not accept the proposal for a directive as
it currently stands. The Commission must firstly respond
adequately to the suggested solutions, and especially in the
light of the EESC’s comments, ensure that the provisions

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Official Journal of the European Union

30.9.2003

contained in the proposal are compatible with those of other
Community instruments dealing with related matters, and
assess in detail the impact of every aspect of the proposed

measures. This applies in particular to progress in completing
the single market in financial services and to significantly
boosting consumer confidence in cross-border transactions.

Brussels, 17 July 2003.

The President

of the European Economic and Social Committee

Roger BRIESCH

Opinion of the European Economic and Social Committee on the ‘Proposal for a Directive of the
European Parliament and of the Council relating to the protection of pedestrians and other
vulnerable road users in the event of a collision with a motor vehicle and amending Directive
70/156/EEC’

(COM(2003) 67 final — 2003/0033 (COD))

(2003/C 234/02)

On 7 March 2003 the Council decided to consult the European Economic and Social Committee, under
Article 95 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 25 June 2003. The rapporteur was
Mr Levaux.

At its 401st Plenary Session, held on 16 and 17 July 2003 (meeting of 16 July), the European Economic
and Social Committee adopted the following opinion by 109 votes to four.

1.

Introduction

1.1. Aim of the proposal

1.1.1.
This proposal aims to reduce the number of deaths
and injuries that occur in accidents involving pedestrians and
cyclists, through changes to the front of passenger cars and
light vans of less than 2,5 tonnes.

1.1.3.
In 2001 the Commission successfully concluded
negotiations with the associations representing the European
car manufacturers (including American vehicles sold in Europe)
and Japanese and Korean car manufacturers (ACEA, JAMA and
KAMA) obtaining a commitment by the industry to introduce
measures to increase pedestrian protection. This commitment
was the subject of a Communication to the Council and the
Parliament on 11 July 2001. In the light of the opinions
received,
the
manufacturers’ commitment by means of a recommendation,
or to put forward a directive based on the contents of the
commitment. The latter option was selected in the end.

the Commission proposed either to accept

1.1.2.
The need for the directive can be seen from the sheer
number of accidents — 8 000 pedestrians and cyclists killed
and a further 300 000 injured in the Community each year in
road accidents — and from the fact that the harmonised
technical requirements for the type-approval of motor vehicles
laid down in Directive 70/156/EEC are in need of modification.

1.1.4.
Thus the proposed directive gives a formal frame-
work to the relevant parts of the commitment undertaken by
the industry, thereby ensuring legal certainty concerning the
implementation of the relevant measures. In addition, the new
requirements will be part of the EC type-approval system, thus
involving the Member States in the application of the legal
provisions.