Commission Opinion pursuant to Article 251 (2), third subparagraph, point (c) of the EC Treaty on the European Parliament's amendments to the Council's common position regarding the proposal for a Directive of the European Parliament and of the Council on credit agreements for consumers amending the proposal of the Commission pursuant to Article 250 (2) of the EC Treaty amending the proposal of the Commission pursuant to Article 250 (2) of the EC Treaty
Date: 2008-02-25
Institutions: European Commission
Subjects: approximation of laws, consumer credit, consumer protection, single market

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 25.2.2008 
COM(2008) 117 final 

2002/0222 (COD) 

COMMISSION OPINION 

pursuant to Article 251 (2), third subparagraph, point (c) of the EC Treaty  

on the 

European Parliament's amendments to the Council's common position regarding the 
proposal for a Directive of the European Parliament and of the Council on credit 
agreements for consumers amending the proposal of the Commission pursuant to 
Article 250 (2) of the EC Treaty  

AMENDING THE PROPOSAL OF THE COMMISSION pursuant to Article 250 (2) of the 
EC Treaty 

EN 

   EN 

 
 
 
  
 
 
2002/0222 (COD) 

COMMISSION OPINION 

pursuant to Article 251 (2), third subparagraph, point (c) of the EC Treaty  

on the 

European Parliament's amendments to the Council's common position regarding the 
proposal for a Directive of the European Parliament and of the Council on credit 
agreements for consumers amending the proposal of the Commission pursuant to 
Article 250 (2) of the EC Treaty  

1. 

BACKGROUND 

Date  of  forwarding  of  the  proposal  to  the  EP  and  Council 
(document COM(2002) 443 final – 2002/0222 COD) 

12 September 2002 

Date of the opinion of the European Parliament (First Reading) 

20 April 2004 

Date of forwarding of the first amended proposal 

29 October 2004 

Date of forwarding of the second amended proposal 

7 October 2005 

Date of the political agreement in Council 

21 May 2007 

Date of adoption of the Common Position 

14  September  2007 
(qualified majority) 

Date of the opinion of the Economic and Social Committee 

17 July 2003 

Date of the opinion of the European Parliament (Second Reading) 

16 January 2008  

2. 

PURPOSE OF THE COMMISSION’S PROPOSAL 

The  proposal  for  a  new  Directive  on  consumer  credit  has  a  double  objective: 
ensuring  a  high  level  of  consumer  protection  and  establishing  the  conditions  for  a 
genuine internal market in consumer credit. 

The  Directive  of  1987  was  based  on  minimum  harmonisation.  Almost  all  Member 
States have gone beyond these standards to a different extent, which has hindered the 
creation of a single market. The full harmonisation in particular of the five essential 
modules  of  the  Directive  (pre-contractual  and  contractual  information,  annual 
percentage rate of charge (APR), right of withdrawal and right of early repayment) 
aims  to  contribute  to  the  creation  of  a  single  market  in  consumer  credit,  because 
creditors will not have to adapt their products to different national legislations in the 
Member States.  

EN 

2 

   EN 

 
 
 
The  current  Directive  on  consumer  credit  (87/102/EC)  was  adopted  in  1987  and 
provides  only  for  basic  consumer  protection  measures.  Recent  market  evolutions 
called for adaptation of these rules. 

3. 

COMMISSION'S  OPINION  ON  THE  AMENDMENTS  PROPOSED  BY 
PARLIAMENT 

The  EP  voted  in  second  reading  a  consolidated  text  which  contains  a  number  of 
amendments to the text of the Common Position. The text is the result of negotiations 
between  the  Council,  the  EP  and  the  Commission.  The  most  important  and  at  the 
same  time  most  controversial  amendment  concerns  the  compensation  in  cases  of 
early  repayment.  Regarding  the  determination  of  the  compensation  the  EP  deleted 
the reference to the reference interest rate of the European Central Bank and added a 
possibility  for  Member  States  to  introduce  a  provision  whereby  creditors  may 
exceptionally claim a higher compensation than the caps if their loss is higher than 
the  caps  and  consumers  may  ask  for  a  reduction  of  the  compensation  if  they  can 
prove the opposite.  

The Commission accepts this amendment and all other amendments voted by the EP. 
The  outcome  of  the  second  reading  in  the  EP  was  overall  satisfactory:  Pre-
contractual and contractual information and the annual percentage rate of charge are 
fully harmonised. The right of withdrawal is fully harmonised with a small flexibility 
for  Member  States  to  reduce  under  very  restricted  conditions  the  period  for 
exercising the right of withdrawal of 14 days to 7 days. The Commission would have 
preferred more harmonisation in this area as well as on the compensation in cases of 
early repayment. However, it can accept the flexibilities granted to Member States as 
part  of  an  overall  package  agreement  which  will  establish  a  high  standard  of 
consumer  protection  while  fixing  the  conditions  for  a  genuine  internal  market  in 
consumer credit. 

4. 

CONCLUSION 

Pursuant to Article 250 (2) of the EC Treaty, the Commission amends its proposal as 
set out above. 

EN 

3 

   EN