REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of Directive 2008/48/EC on credit agreements for consumers
Date: 2020-11-05
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: EU Member State, application of EU law, consumer credit, consumer protection, contract, credit policy, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 5.11.2020  COM(2020) 963 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of Directive 2008/48/EC on credit agreements for consumers      {SEC(2020) 371 final} - {SWD(2020) 254 final} - {SWD(2020) 255 final}  
 
 
Directive 2008/48/EC – Report to the co-legislators (in line with Art 27(2) CCD) 

1. 

Introduction 

Directive  2008/48/EC  on  credit  agreements  for  consumers  (Consumer  Credit  Directive  – 
‘Directive’)1  harmonises  certain  aspects  of  the  laws,  regulations  and  administrative 
provisions of the Member States concerning credit agreements for consumers. It pursues two 
main objectives:  

(i) 
(ii) 

to improve consumer protection thus boosting consumer confidence, and  
to foster the emergence of a well-functioning internal market for consumer credit 
offered  across  borders  by  ensuring  a  level-playing  field  for  consumer  credit 
providers across Member States. 

The Directive does not aim to encourage consumers to take more credit, but rather to provide 
them with all necessary information to reflect and compare offers before taking a credit and 
to  give  them  rights  in  case  they  change  their  mind.  It  covers  consumer  credit  between 
EUR 200  and  EUR 75 000,  such  as  loans  granted  for  personal  consumption,  overdrafts  and 
credit  cards,  as  well  as  unsecured  loans  above  EUR 75 000  the  purpose  of  which  is  the 
renovation  of  a  residential  immovable  property.  The  Directive  does  not  apply  to  certain 
specific  types  of  consumer  credit  (e.g.  certain  interest-free  credits,  certain  leasing 
agreements). 

The Directive entered into force in June 2008 and Member States had until 11 June 2010 to 
transpose  it.  By  now,  there  are  no  pending  infringement  procedures  against  Member  States 
for non-transposition of the Directive2.  

The  Directive  triggered  substantial  reforms  of  the  consumer  credit  environment  in  most 
Member  States.  Member  States  had  to  either  develop  and  set  up  an  entirely  new  legal 
framework applicable to the credit market or amend their existing legislation. Insofar as the 
Directive established harmonised provisions, Member States could not maintain or introduce 
in  their  national  law  provisions  diverging  from  those  laid  down  in  the  Directive.  However, 
discretionary  flexibility  was  given  to  Member  States  to  make  use  of  particular  regulatory 
choices  in  nine  optional  provisions3.  In  addition,  some  provisions  of  the  Directive  set  clear 
objectives but do not clearly specify the result to be achieved. This gave Member States some 
additional discretion in the implementation of the Directive. 

Article  27(2)  of  the  Directive  requires  the  Commission  to  monitor  the  way  in  which  the 
regulatory  choices  of  Member  States  affect  the  internal  market  and  consumers4.  Moreover, 

1 Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements 
for consumers and repealing Council Directive 87/102/EEC, OJ L 133, 22.5.2008, p. 66–92 
2 Upon the expiry of the transposition deadline, the Commission initiated infringement proceedings against 20 
Member  States.  However,  the  Member  States  had  eventually  adopted  and  communicated  their  transposition 
measures and thus all cases were closed soon after. 
3 Specified in Article 27(2) of the Directive and addressed further below in Section 3. 
4  Article  27(2)  of  the  Directive  furthermore  requires  that  the  Commission  undertakes  a  regular  review  of  the 
thresholds  and  percentages  laid  down  in  the  legislation  and  corresponding  annexes.  See  Section  4  below  for 
more information. 

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the  Commission  underlined  in  the  2017  ‘Consumer  Financial  Services  Action  Plan’5  the 
importance of a (i) deeper and safer single market for consumer credit6 as well as of (ii) better 
creditworthiness  assessment7.  The  Commission’s  REFIT  Platform  opinion  recommended  in 
2019 to assess the relevance, effectiveness and efficiency of the requirements for the standard 
information to be included in advertising. 

Against  this  background,  the  Commission  decided  to  carry  out  a  full-fledged  evaluation  of 
the  Directive  to  assess  its  effectiveness,  efficiency,  coherence,  relevance,  and  EU  added 
value8. The evaluation was carried out in line with Better Regulation principles, including an 
Open Public Consultation between January and April 2019 and other stakeholder consultation 
activities. 

This  report  presents  the  key  results  of  the  evaluation  and  the  lessons  learnt  from  the 
application  of  the  Directive  over  the  past  10  years,  including  the  considerations  required 
under Article 27(2) of the Directive9. It draws on the results of a comprehensive evaluation 
document  prepared  by  the  Commission  services10  and  published  simultaneously  with  this 
report. 

2. 

Key outcomes of the evaluation 

2.1 Overall result 

The  overall  finding  of  the  evaluation  is  that  the  Directive  has  been  partially  effective  in 
ensuring  high  standards  of  consumer  protection  and  fostering  the  development  of  a  single 
market  for  credit,  and  that  its  objectives  are  still  relevant  in  the  context  of  a  regulatory 
landscape showing significant fragmentation across the EU. 

Effectiveness 

A high level of consumer protection and the emergence of a well-functioning internal market 
have both been partially achieved. The most effective provisions in the Directive relate to the 
provisions on the rights of withdrawal and early repayment and the provision regulating the 
Annual  Percentage  Rate  of  Charge.  On  the  other  hand,  provisions  regarding  the 
creditworthiness assessments and credit databases have not been fully effective. The reasons 

5 Communication from the Commission to the European Parliament, the Council, the European Central Bank, 
the European Economic and Social Committee and the Committee of the Regions, Consumer Financial Services 
Action Plan: Better Products, More Choice, COM/2017/0139 final 
6 Action 7 – Deeper Single Market for consumer credit: the Commission will explore ways of facilitating access 
to loans across borders whilst ensuring a high level of consumer protection. In this context, the Commission will 
also  consider  ways  of  addressing  in  a  more  efficient  manner  consumer  over-indebtedness  linked  to  credit 
activities. 
7  Action  9  -  Better  creditworthiness  assessments:  the  Commission  will  seek  to  introduce  common 
creditworthiness assessment standards and principles for lending to consumers and work to develop a minimum 
set of data to be exchanged between credit registers in cross-border creditworthiness assessments. 
8  See  here:  https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/1844-Evaluation-of-the-
Consumer-Credit-Directive 
9  Article  27(2)  of  the  Directive  provides  that  the  Commission  shall  monitor  the  effect  of  the  existence  of  the 
regulatory  choices  referred  to  in  Article  2(5),  2(6),  4(1),  4(2)(c), 6(2),  10(1),  10(5)(f),  14(2)  and  16(4)  of  the 
Directive. 
10 SWD(2020)254. 

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why  the  Directive  has  been  only  partially  effective  stem  both  from  the  Directive  itself  (for 
instance,  imprecise  wording  of  particular  articles)  and  from  external  factors,  such  as  the 
practical  application  and  enforcement  in  the  Member  States11  and  from  aspects  of  the 
consumer credit market not covered by the Directive. 

Efficiency 

The  entry  into  force  of  the  Directive  has  led  to  a  number  of  initial  and  on-going  costs  (for 
instance, staff training and initial set up costs for private companies; monitoring, compliance 
and enforcement costs for public authorities). However, the main finding is that the principal 
benefit of the Directive, namely the reduction in consumer detriment, outweighs the costs. 

Coherence 

The  Directive  is  generally  coherent  with  and  complementary  to  other  EU-level  consumer 
policy and legislation. While there are no major inconsistencies with other relevant EU-level 
legislation,  further  alignment  or  synergies  with  such  legislation  may  help  improve  legal 
clarity  for  consumers  and  creditors.  One  such  instance  concerns  the  creditworthiness 
assessment  and  the  possible  need  for  the  Directive  to  align  itself  better  with  the  Mortgage 
Credit Directive and General Data Protection Regulation respectively. 

Relevance 

The  two  main  objectives  of  the  Directive,  namely  achieving  higher  consumer  protection 
standards and the emergence of a cross-border market, remain relevant. However, in order to 
sustain its relevance in the short and medium term, the Directive may need to cover the new 
emerging consumer habits and emerging market developments brought by digitalisation. This 
does not  require changing the objectives themselves, but  possibly  an adaptation  of some of 
the Directive’s provisions. 

EU added value 

The Directive’s added value lies in the creation of a high level of consumer protection across 
the  EU  and  in  the  reduction  of  fragmentation  of  the  EU  regulatory  framework  through  the 
introduction  of  certain  harmonization  articles  (for  instance,  standardised  information 
formats), thereby increasing consumer protection and reducing the barriers to the provision of 
cross border credit.  

2.2 Key developments of the credit market affecting the Directive  

The  effectiveness,  efficiency,  coherence,  relevance  and  added  value  of  the  Directive  have 
been affected by several trends in the credit market over the past 10 years:  

Digitalisation  

Digitalisation  has  profoundly  changed  the  decision-making  process  and  overall  habits  of 
consumers.  This  is  also  affecting  the  lending  sector  that  is  progressively  getting  digitalised 

11 Discussed below Section 2.4. 

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with an increasing number of consumer credit contracts negotiated and/or concluded online. 
The trend towards more digitalisation is expected to continue12. 

Digitalisation also brought with it new market players offering credit agreements in different 
forms, such as credits by platforms or peer-to-peer lending. This has generated a debate about 
whether or not new market players do and should fall within the scope of the Directive and 
whether  the  current  definition  of  ‘creditor’  as  laid  down  in  the  Directive  is  sufficient. 
Digitalisation  has  also  put  into  question  the  suitability  of  the  current  articles  on  pre-
contractual information for a paperless environment navigated by digital tools such as mobile 
phones and tablets. 

New Products 

New products have appeared on the consumer credit market, as a result of innovation or by 
adaptation  from  the  corporate  finance  sector  –  e.g.  short-term  high-cost  credit,  revolving 
credit, or peer-to-peer lending.  

Some  of  these  new  products  currently  do  not  fall  within  the  scope  of  the  Directive.  At  the 
same time, some of them pose particular risks for consumers as charges related to them may 
be  either  very  high  from  the  outset  or  increase  rapidly  over  time,  thus  bearing  the  risk  of 
sending the consumer into a spiral of debt. 

Consumer preferences 

Over  the  past  ten  years,  the  consumers’  decision-making  processes  to  take  up  credit  have 
changed  not  only  as  a  result  of  digitalisation  but  also  due  to  the  transformation  of 
consumption habits. The public consultation in 201913 has shown that consumers place more 
emphasis  on  smoother  and  faster  process  of  obtaining  the  credit  rather  than  the  location  or 
identity of the creditor. 

2.3 Areas where the Directive had particularly positive impact  

Notwithstanding  the  above  challenges,  the  evaluation  has  shown  that  the  Directive  has 
improved consumer protection and internal market integration in a number of areas:  

Right of withdrawal and early repayments 

The consumer enjoys a period of 14 calendar days in which he can withdraw from the credit 
agreement  without  giving  a  reason.  In  addition,  the  early  repayment  clause  entitles  the 
consumer  to  fully  or  partially  repay,  at  any  time,  the  outstanding  debt  under  a  credit 
agreement. 

There  is  consensus  among  consumers,  consumer  organisations,  Member  State  officials  and 
creditors  that  the  right  of  withdrawal  and  the  right  of  early  repayment  are  effective  and 

12 A study showed that between Q2 2016 and Q2 2018 the volume of fintech credit rose about threefold, while 
another found that the fintech market is expected to grow 13.3% by 2022, from a 2018 transaction value of EUR 
682 billion. 
13 
Credit-Directive 

https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/1844-Evaluation-of-the-Consumer-

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generally  working  well14.  They  are  seen  as  offering  high  levels  of  protection  to  consumers 
and also show good levels of compliance by creditors15.  

Annual Percentage Rate of Charge  

The Annual Percentage Rate of Charge expresses the total cost of the credit to the consumer 
as an annual percentage of the total amount of credit. Although the provision on the Annual 
Percentage Rate of Charge existed already in the previous legislation on consumer credit, the 
Directive  entirely  harmonised  the  calculation  of  the  Annual  Percentage  Rate  of  Charge  by 
providing a coherent formula for its calculation across all Member States. The Directive thus 
provides  for  a  common  and  comparable  tool  of  high  effectiveness  and  value  added  for 
consumers16. 

Pre-contractual information: The Standard European Consumer Credit Information form  

The  Directive  obliges  the  creditor  to  provide  to  the  consumer,  in  good  time  before  he  is 
bound  by  any  credit  agreement  or  offer,  with  the  information  needed  to  compare  different 
offers  and  take  an  informed  decision  whether  to  conclude  a  credit  agreement.  Such 
information  is  provided  by  means  of  the  Standard  European  Consumer  Credit  Information 
form  which includes key details  such as type of  credit, Annual  Percentage Rate of Charge, 
number and frequency of payments, and total amount owed.  

Overall, stakeholders acknowledge that the Standard European Consumer Credit Information 
form has had a positive impact on consumer protection by providing them with information 
in  an  easily  understandable  and  well-structured  format17.  In  addition,  compliance  among 
credit providers with the provision on pre-contractual information is generally high.  

2.4 Shortcomings of the Directive 

The evaluation has pointed to a number of challenges which have emerged in the course of 
the Directive’s  application. They  result from  shortcomings of the Directive as well as from 
the trends in the credit environment, and have partially hampered achieving its objectives:  

Scope  

The exclusions from Directive’s scope defined in its Article 2 are significant and encompass 
certain  widely  used  loans  as  well  as  loans  that  are  documented  to  more  easily  lead  to 
consumer  detriment  under  certain  circumstances,  such  as  zero-interest  loans,  payday  loans, 

14  Overall,  consumers  are  well-informed  about  both  rights,  with  72%  of  consumers  aware  of  the  right  to 
withdraw, and 82% of the right to repay early 
15  Relatively  few  consumers  experienced  problems  in  exercising  their  right  of  withdrawal,  with  slightly  more 
facing issues with early repayment 
16 90% of the individuals who replied to the Open Public Consultation considered the Annual Percentage Rate of 
Charge somewhat or very important in their decision.   
17 Nearly two-thirds of the organisations responding to the  Open Public Consultation considered the  Standard 
European  Consumer  Credit  Information  form  to  be  effective.  While  the  majority  of  responding  public 
authorities (74%) and consumer associations (65%) clearly stated that the Standard European Consumer Credit 
Information  form  was  effective  in  protecting  consumers,  for  industry  representatives  this  was  just  over  half 
(56%) 

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leasing  agreements  that  do  not  impose  an  obligation  to  purchase,  or  agreements  with 
pawnshops. 

Furthermore, the Directive does not cover the entire process of credit granting of which many 
aspects are only partially harmonised or not at all harmonised across the EU (e.g. the content 
of  credit  databases).  This  represents  an  important  barrier  to  the  creation  of  a  real  internal 
market for consumer credit. 

Definitions and unclear terms 

Most  of  Directive’s  definitions  are  still  relevant  to  the  current  market  situation.  However, 
there is a growing level of uncertainty about new forms of lending that have appeared online. 
Article 2(2) of the Directive does not explicitly mention such new forms of lending - there is 
no  reference,  for  instance,  to  peer-to-peer  lending18  amongst  the  exclusions  for  the  scope 
(Article  2(2)),  meaning  that  the  Directive  should  in  principle  cover  peer  to  peer  lending. 
However, the definition of ‘creditor’ uses the words ‘in the course of his  trade, business or 
profession’ which might not fit with the concept of peer-to-peer lending.  

Legal  uncertainty  is  also  resulting  from  imprecise  wording  of  some  provisions  of  the 
Directive  such  as  those  on  standard  information  to  be  included  in  advertising,  on  pre-
contractual  information  and  on  creditworthiness  assessment  which  employ  terms  such  as 
‘sufficient information’ and ‘in good time’ without further specification. 

Information obligations and channels of communication 

While there is no doubt that the harmonized Standard European Consumer Credit Information 
form in the detailed table-format set out in Annex II of the Directive seems to work well in a 
paper  context,  the  format  and  length  of  the  form  does  not  suit  modern  mobile  digital 
technology  used  by  many  consumers.  Thus,  the  aim  of  the  Standard  European  Consumer 
Credit  Information  form of providing useful pre-contractual information leads to  obligatory 
disclosure of information difficult  for the  consumer to  access  and  comprehend in  an online 
environment, thus defeating its original purpose. 

Another  transparency-related  issue  that  has  surfaced  over  the  course  of  the  past  decade 
concerns advertisements for consumer credit aired on television and radio. The provisions of 
Article  4  of  the  Directive19  lead  to  important  information  being  either  shown  for  a  very 
limited amount of time or spoken very quickly, not giving consumers enough time to process 
and recall it. This indicates the practical difficulty involved in making the current Article 4 of 
the Directive consistently effective across all media types. 

Creditworthiness assessment and credit databases 

Article  8  of  the  Directive  provides  for  an  ‘obligation  to  assess  the  creditworthiness  of  the 
consumer before granting a credit to the consumer’. The Article states that the creditor needs 

18  Peer-to-peer  lending  consists  of  the  use  of  an  electronic  platform  to  match  lenders/investors  with 
borrowers/issuers to provide unsecured loans, including consumer credit 
19  Article  4  requires  that  standard  information  is  provided  in  a  clear,  concise  and  prominent  way  and  lists  a 
number of required information items, including the borrowing rate, the total amount of credit and the annual 
percentage rate of charge.  

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to  assess  ‘the  consumer's  creditworthiness  on  the  basis  of  sufficient  information,  where 
appropriate obtained from the consumer and, where necessary, on the basis of a consultation 
of the relevant database’, without specifically defining the information to be checked or the 
conditions  under  which  the  creditor  can  deem  the  consumer  to  be  creditworthy.  The 
information  to  be  checked  and  the  decision-making  process  are  defined  at  Member  State 
level,  giving  considerable  discretion  to  Member  States  to  further  regulate  the  details  of  the 
creditworthiness assessment.  

A majority of Member States20 have laid down further provisions about the creditworthiness 
assessment and access to databases, further defining how the creditworthiness assessment is 
to be conducted and imposing other obligations on creditors. Most Member States that went 
beyond  the  simple  obligation  of  checking  the  solvency  of  a  borrower  have  laid  down  the 
documents that consumers have to provide to assess their creditworthiness.21 

The  only  source  of  data  that  the  Directive  defines  for  creditworthiness  assessment  are  the 
credit  databases  that  exist  in  Member  States  and  that  store  information  on  consumers’ 
existing credit and possible defaults. Article 9 of the Directive, concerning database access, 
imposes  the  obligation  for  each  Member  State  to  ensure  access  for  creditors  from  other 
Member States to databases used in that Member State. However, the Directive is silent on 
how  such  access  is  to  be  granted,  resulting  in  different  access  requirements  set  by  the 
individual  Member  States.  Moreover,  the  credit  databases  –  and  the  information  contained 
therein  –  differ  from  Member  State  to  Member  State,  being  either  public  or  private  and 
containing positive data (i.e. data on any credit taken by a person) or negative data (i.e. solely 
data on defaults on credit taken) or both.  

The  differences  in  the  content  of  each  respective  Member  State’s  database  make  the 
creditor’s task harder in cross-border operations. 

In  addition  to  the  differences  in  the  way  Member  States  operationalized  the  generic 
requirements of Articles 8 and 9, some Member States22 imposed a range of other obligations 
on  creditors  with  respect  to  creditworthiness  assessment,  such  as  rules  that  prohibit  the 
creditors  from  terminating the credit agreement  or from  imposing penalties and charges for 
late payments in case the creditworthiness assessment was not correctly done.  

As  a  result,  the  current  provisions  of  the  Directive  have  led  to  a  fragmented  situation  with 
respect  to  creditworthiness  assessment  rules  as  well  as  database  interoperability  which 
hamper better functioning of the internal market for consumer credit. 

Enforcement of the Directive 

Article 23 of the Directive establishes that Member States are to lay down rules on penalties 
applicable to infringements of the national provisions transposing the Directive and that such 
penalties must be effective, proportionate and dissuasive. 

20 BE, CZ, DK, ES, FI, HU, IT, LV, LT, NL, PL, RO, SI, SK, SE, UK.  
21 BE, DK, ES, FI, LV, PL, SK, UK. 
22 HU, IT, LT, NL, SI. 

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In doing so, Member States have generally established civil and administrative sanctions for 
infringements  of  the  national  provisions  transposing  the  Directive;  however,  some  Member 
States,  provide,  in  addition  to  civil  and  administrative  sanctions,  the  possibility  to  issue 
criminal  sanctions.  The  result  has  been  that  there  is  considerable  disparity  in  the  types  and 
levels  of  sanctions  used  by  national  authorities  when  enforcing  the  Directive.  In  addition, 
while  a  small  majority  of  Member  States  have  only  one  enforcement  body  responsible  for 
compliance of the Directive, a large number of Member States have appointed several bodies 
to ensure correct implementation of the different aspects of the Directive; in some Member 
States, the competent authority depends on the type of the credit provider, namely whether it 
is  a  bank  or  a  non-bank  lender  23.  Having  multiple  competent  authorities  with  varying 
sanctioning powers and competent authorities depending on the type of operator has had an 
impact on the level-playing field between the competitive position of different categories of 
providers and the consistency of enforcement. 

3. 

Member States’ use of regulatory choices provided for by the Directive 

The  shortcomings  of  the  Directive  highlighted  above  have  been  further  exacerbated  by  the 
results of the regulatory choices made by Member States on certain elements of the Directive. 
While  the  Directive  required  the  development  of  a  specific  harmonized  legal  framework  to 
protect  consumers,  which  did  not  exist  in  numerous  Member  States  at  the  time  of  its 
introduction,  flexibility  was  given  to  national  lawmakers  for  nine  optional  provisions, 
offering the possibility for Member States to make use of particular regulatory choices.  

Regulatory choices referred to in Article 27(2) of the Directive 

According to Article 2(5) of the Directive, Member States may decide to partially apply the 
Directive to credit agreements concluded by organisations established for the mutual benefit 
of their members24. This flexibility was used by some Member States25. 

According to Article 2(6) of the Directive, Member States may decide to apply only certain 
articles of the Directive in a situation where the consumer is already in default of the initial 
credit  agreement  and  the  creditor  and  the  consumer  both  agree  on  the  deferred  payment  or 
repayment method. This possibility has been used by a majority26 of Member States. 

According to the second paragraph of Article 4(1) of the Directive, national legislation may 
determine that the Annual Percentage Rate of Charge must be included in advertisements for 
credit  agreements  that  do  not  indicate  an  interest  rate  or  any  figures  relating  to  the  cost  of 

23  For  instance,  the  creditworthiness  assessment  requirements  stemming  from  the  Directive  are  generally 
enforced by the consumer authority (for all creditors in BE, EE, EL, FR, IS, LV, PL; for non-bank lenders in 
DK, SE, SI and regional ES authorities), the financial supervisory authority (for all creditors in EE, FR, NL, PL, 
UK and for bank lenders in DK, SE) or the national central bank  (for all lenders in CY, CZ, ES,  HU, IE, IT, 
LT, PT, RO, SK and for bank lenders in ES, SI). 
24 Full list of qualifying criteria is provided in Article 2(5) of the Directive. 
25 CY, IE, LT, LV, RO, UK 
26 BE, CY, CZ, DE, DK, EL, ES, HR, IT, LT, LU, LV, MT, PL, PT, RO, SI, SK  

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credit  to  the  consumer.  Only  a  limited  number  of  Member  States27  have  made  use  of  the 
flexibility laid down in Article 4(1) of the Directive. 

According  to  Article  4(2)(c)  and  Article  10(5)(f)  of  the  Directive,  respectively,  Member 
States  may  establish  that  the  Annual  Rate  of  Percentage  of  Charge  does  not  need  to  be 
included in  the information provided to  consumers at  the  advertising  stage and  contractual 
stage for credit agreements in the form of overdraft facilities where the credit is to be repaid 
on  demand  or  within  three  months.  A  good  number  of  Member  States  have  exercised  the 
possibility provided by  Article 10(5)(f)  28, while a slightly lower number of Member States 
made use of the option provided by Article 4(2)(c) 29.  

The flexibility provided by Article 6(2) of the Directive allowing Member States to exclude 
the  Annual  Percentage  Rate  of  Charge  from  the  pre-contractual  information  in  case  of 
specific credit agreements covered by Article 2(3) (overdraft facilities where  the credit is to 
be repaid on demand or within three months) was opted for by a number30 of Member States.  

According  to  the  second  paragraph  of  Article  10(1)  of  the  Directive,  Member  States  may 
establish  rules  regarding  the  validity  of  the  conclusion  of  credit  agreements  which  are  in 
conformity  with  European  Union  law.  All  Member  States  have  opted  to  include  additional 
rules regarding the validity of the conclusion of credit agreements. 

Article 14(2) of the Directive concerns the right of withdrawal in linked credit agreements. It 
establishes that in a situation where the national legislation at the time of entry into force of 
the Directive already provided that funds cannot be made available to the consumers before 
the expiry of a specific period, Member States could exceptionally provide that the period of 
14  calendar  day  provided  for  in  Article  14(1)  of  the  Directive  for  the  right  of  withdrawal 
could be reduced to this specific period at the explicit request of the consumer. Article 14(2) 
of  the  Directive  has  been  scarcely  used  by  Member  States31  since  its  applications  is  quite 
specific. 

Article  16  of  the  Directive  concerns  early  repayment  by  the  consumer  of  his  obligations 
under a credit agreement and the creditor’s possibility to be compensated. Article 16(4) of the 
Directive  establishes  that  Member  States  may  provide  that  creditors  are  entitled  to 
compensation for early repayment only if the amount of early repayment exceeds a threshold 
defined  in  national  law  (which  cannot  exceed  EUR  10,000  within  a  period  of  12  months 
(Article 16(4)(a)) and that they may claim a higher compensation, by exception, if they can 
provide  that  the  loss  suffered  is  higher  than  the  amount  of  the  normal  compensation 
(Article 16(4)(b)).  A  large  number  of  Member  States32  have  in  fact  established  a  threshold 

27 CY, HU, SE, UK 
28 The Member States that have opted not to include the Annual Rate of Percentage of Charge at the contractual 
stage are: CZ, DE, DK, ES, IE, LU, MT, NL, PL, SK, UK 
29 The Member States that have opted not to include the Annual Rate of Percentage of Charge at the advertising 
stage are: BG, DK, ES, IE, LU, MT, PL, UK    
30 DE, DK, ES, HR, IE, LU, MT, PL, SK, UK    
31 FR, RO, SI 
32 AT, CY, EL, FI, FR, HR, HU, IE, IT, LT, LU, MT, PL, SI, SK, UK    

9 

 
 
                                                           
beyond  which  the  creditor  can  claim  compensation  (Article  16(4)(a)).  With  regard  to 
Article 16(4)(b) of the Directive, a number of Member States33 have opted to legislate also in 
the  circumstance  where  the  creditor  can  prove  that  he  has  suffered  a  loss  due  to  the  early 
repayment which exceeds the thresholds set by Article 16(2) of the Directive34. 

Other regulatory choices by Member States, notably on scope  

Some Member States went beyond the Directive in areas not covered by it and where the full 
harmonisation  rule  of  the  Directive  does  not  apply.  The  limitation  of  the  scope  of  the 
Directive  has  pushed  Member  States  to  broaden  the  scope  of  their  respective  legislation  in 
order to capture more types of credit agreements. With the exception of two Member States35, 
all Member States have adopted measures that go beyond the requirements of the Directive. 
Some  extend  the  scope  of  application  of  the  Directive  (or  certain  of  its  provisions)  to 
consumer  credit  not  covered  or  not  entirely  covered  by  the  Directive,  either  below  EUR 
200,36  above  EUR  75,00037  or  to  leasing  agreements,38  overdraft  facilities,39  revolving 
credit,40 mortgages,41 zero-interest rate credit42 and agreements with pawnshops.43 

Moreover, some provisions of the Directive, while setting clear objectives, did not specify the 
exact  result  to  be  achieved,  remaining  somewhat  ambiguous  (for  instance,  the  article  on 
creditworthiness assessment, discussed above). 

Effects of regulatory choices 

The combined effect of the regulatory choices in areas established by the Directive or where 
made  necessary  by  the  lack  of  specification  in  the  Directive,  has  resulted  in  a  fragmented 
regulatory  framework  in  a  number  of  aspects  of  consumer  credit.  This  leads  to  a  different 
scope  of  consumer  protection  and  also  affects  the  integrity  of  the  internal  market  for 
consumer credit insofar as they pose boundaries to cross-border operations of creditors.  

4. 

Thresholds and percentage rates 

Article  27(2)  of  the  Directive  obliges  the  Commission,  every  five  years,  to  review  the 
thresholds laid down in the legislation and the percentages used to calculate the compensation 
payable in the event of early payment. 

Thresholds laid down in this Directive and its annexes 

33 BG, CY, DK, ES, LT, LU, MT, NL, UK 
34 See  Table 3 on page 38 of the  Evaluation Study  which provides an overview of the implementation of the 
Directive:https://ec.europa.eu/info/business-economy-euro/banking-and-finance/consumer-finance-and-
payments/retail-financial-services/credit/consumer-credit_en  
35 CY, EL 
36 BE, BG, CZ, DK, EE, FI, HU, IT, LV, PT, SK. 
37 DE, DK, CZ, EE, ES, FI, FR, HU, PT, RO. 
38 AT, EE, HU, IT, FI, FR, PT, UK. 
39 AT, BE, FI, PT, FR. 
40 FI, NL, FR, IT. 
41 BG, CZ, HR, HU, RO, SI, SK. 
42 BE, UK. 
43 BE. 

10 

 
 
                                                           
As mentioned above, Article 2(2)(c) of the Directive provides that credit agreements less than 
EUR  200  or  more  than  EUR  75  00044  fall  outside  its  scope.  There  seems  to  be  a  general 
agreement45  that  these  thresholds  are  affecting  the  effectiveness  and  relevance  of  the 
Directive.  High-risk  credit  agreements,  which  often  cause  consumer  detriment,  are  often 
lower than EUR 200 and thus not covered by the Directive. To remedy this, a large number 
of Member States46 have decided in the transposition of the Directive to extend the scope to 
credit agreements lower than EUR 200.  

While  the  upper  threshold  of  EUR  75  000  seems  to  pose  less  of  a  risk  from  consumer 
protection  or  internal  market  perspective,  a  number  of  Member  States47  have  extended  the 
scope  of  the  Directive  (or  some  of  its  provisions)  also  to  credit  agreements  above 
EUR 75 000.  

The  thresholds  were  fixed  at  the  time  of  the  adoption  of  Directive,  hence  in  2008.  They 
therefore reflect the economic circumstances of that time. If considered at present-time price 
levels,  using  the  standard  GDP  deflator,  the  corresponding  values  for  the  lower  and  upper 
limits would be approximately EUR 235 and EUR 87 380 respectively48. 

In the light of the above, the planned review of the Directive could consider whether it would 
be justified to adjust or abolish the thresholds49.  

The Directive contains another threshold, laid down in Part II (Additional assumptions for the 
calculations of the annual percentage rate of charge) of Annex I. The Annex, in paragraph h 
of  Part  II,  provides  that  in  case  the  parties  to  the  credit  agreement  have  not  agreed  on  its 
ceiling, the assumed ceiling for the calculation of the annual percentage rate of charge will be 
set at EUR 1 500. Annex I has been the subject of a legislative amendment50 which aimed at 
modernising  the  assumptions  used  to  calculate  the  Annual  Percentage  Rate  of  Charge. 
However,  the  ceiling  has  not  been  amended,  and  from  the  analyses  carried  out  during 
Directive’s  evaluation  in  2019  no  relevant  evidence  calling  for  its  amendment  has  been 
identified. 

Percentages used to calculate the compensation payable in the event of early repayment 

44  The  Directive  applies  also  to  unsecured  credit  agreements  above  EUR  75  000  the  purpose  of  which  is  the 
renovation of a residential immovable property. 
45 According to stakeholder consultations carried out in 2019, over 90% of consumer associations argued that 
the current thresholds are no longer adequate, with 80% of Member State authorities agreeing. Among the credit 
providers, 30% considered the scope inadequate, with the lower limit cited as a particular problem. 
46 BE, BG, CZ, DK, EE, FI, HU, IT, LV, PT, SK. 
47 DE, DK, CZ, EE, ES, FI, FR, HU, PT, RO 
48 
as 
from 
EUR 
https://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=teina110&plugin=1, 
200 in 2008 economics corresponds to approximately EUR 235 in 2020 economics. Similarly, EUR 75 000 in 
2008 corresponds to approximately EUR 87 380. 
49  https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12465-Consumer-Credit-Agreement-
review-of-EU-rules 
50  Commission  Directive  2011/90/EU  of  14 November  2011  amending  Part  II  of  Annex  I  to  Directive 
2008/48/EC of the European Parliament and of the Council providing additional assumptions for the calculation 
of the annual percentage rate of charge 

available 

deflator 

deflator 

Using 

GDP 

GDP 

the 

the 

11 

 
 
                                                           
The  Directive  also  lays  down  thresholds  in  Article  16;  they  concern  the  compensation  to 
which creditors are entitled to in the event of early repayment. The threshold foreseen is of 
1% of the amount repaid early, which is reduced to 0.5% if the period of time between the 
early repayment and the agreed termination of the credit agreement does not exceed one year. 
Neither the Directive Report of 201451 nor the recent  study  have identified any issues  with 
regard to this threshold and as such it is still considered relevant to the needs of the consumer 
credit market. 

5. 

Conclusions and way forward 

The  main  finding  of  the  Directive’s  evaluation  is  that  its  two  objectives,  namely  ensuring 
high standards of consumer protection and fostering the development of a single market for 
credit, have been partially achieved and remain relevant. The rights of withdrawal and early 
repayment and the introduction of standardised information formats, have contributed to the 
provision  of  a  standard  EU-wide  level  of  consumer  protection,  thereby  reducing  consumer 
detriment,  increasing  consumer  protection  and  providing  a  level-playing  field  between 
providers EU-wide. 

On  the  other  hand,  the  rapid  digitalisation  and  product  innovation  as  well  as  changes  in 
consumer  preferences  over  the  past  decade  pose  challenges  to  the  legal  framework  for 
consumer credit based on the Directive. While rigid prescriptions of formats for information 
disclosure  ensured  ten  years  ago  improved  transparency  during  the  pre-contractual  stages, 
then  taking  place  in  paper  format,  they  are  not  necessarily  maximizing  consumer  benefit 
today in an increasingly digital environment, and in situations where consumers prefer a fast 
and  smooth  credit-granting  process.  The  increasingly  digital  environment  has  in  turn 
motivated the development of new products, some of which may present new risks for which 
the Directive does not offer effective protection. 

These  facts  point  to  the  possible  need  of  the  review  of  certain  provisions  of  the  Directive, 
particularly  on  the  scope  and  the  credit-granting  process  (including  the  pre-contractual 
information  and  creditworthiness  assessment).  Such  a  review  could  also  be  a  suitable 
opportunity to consider remedies for other shortcomings, such as improving the definitions. 

Finally,  while  most  thresholds  and  percentages  in  the  Directive  do  not  seem  to  require 
amendments,  there  appears  to  be  broad  agreement  among  stakeholders  that  the  EUR 200-
EUR 75 000 threshold related to the scope of application of the Directive could be revisited. 

The  Commission  will  include  these  considerations  in  the  revision  of  Directive  that  was 
already  announced  for  the  second  quarter  of  2021  in  the  revised  2020  Commission  Work 
Programme, adopted on 28 May 202052. 

51 Report from the Commission to the European Parliament and the Council, on the implementation of Directive 
2008/48/EC on credit agreements for consumers, Brussels, 14.5.2014. COM(2014) 259 final  
52 Available here: https://ec.europa.eu/info/sites/info/files/cwp-2020-adjusted-annexes_en.pdf 

12