COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT Accompanying the Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on consumer credits
Date: 2021-06-30
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: EU Member State, consumer credit, consumer protection, contract, credit policy, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 30.6.2021  SWD(2021) 170 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT REPORT  Accompanying the  Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  on consumer credits          {COM(2021) 347 final} - {SEC(2021) 281 final} - {SWD(2021) 171 final}  
 
 
DISCLAIMER: This is a working document draft which does not reflect the views of the 
European Commission. The positions expressed therein do not prejudge the official position 
of the European Commission 

EN 

  EN 

 
 
 
 
 
Table of Contents 

1. 

2. 

Introduction: political and legal context ......................................................................................3 

Problem definition .......................................................................................................................6 

2.1 What are the problem drivers? ................................................................................................. 8 

2.2 What are the problems? ............................................................................................................ 8 

2.3  What are the consequences of the problems? ................................................................... 25 

2.4  How will the problem evolve? .......................................................................................... 26 

2.5 

Intervention logic .............................................................................................................. 29 

3.  Why should the EU act? ............................................................................................................30 

3.1 

3.2 

3.3 

Legal basis ........................................................................................................................ 30 

Subsidiarity: Necessity of EU action ................................................................................ 30 

Subsidiarity: Added value of EU action ........................................................................... 31 

4.  Objectives: What is to be achieved? ..........................................................................................32 

4.1  General objectives ............................................................................................................ 33 

4.2 

Specific objectives ............................................................................................................ 33 

5.  What are the available policy options? ......................................................................................34 

5.1  What is the baseline from which options are assessed? .................................................... 34 

5.2  Description of the policy options ...................................................................................... 35 

5.3  Options discarded at an early stage ................................................................................... 44 

6.  What are the impacts of the different policy options and who will be affected? .......................45 

6.1 

6.2 

Policy option 1: Non-regulatory intervention ................................................................... 46 

Policy option 2: Targeted amendment of the Directive to increase legal clarity .............. 47 

Policy option 3a: Extensive amendment of the Directive to include certain new 

6.3 
provisions, in line with existing EU acquis .................................................................................. 49 

6.4 
Policy option 3b: Extensive amendment of the Directive to include provisions going 
beyond existing EU acquis ........................................................................................................... 52 

7.  How do the options compare? ....................................................................................................54 

7.1 Effectiveness: expected achievement of the initiative’s objectives ....................................... 54 

7.2 Efficiency: impacts on businesses and consumers ................................................................. 55 

7.3 Coherence with other EU legislation (and policy objectives) ................................................ 59 

7.4 Stakeholder views on the options ........................................................................................... 59 

7.5 Comparison of options and proportionality............................................................................ 61 

8. 

The preferred option ..................................................................................................................63 

8.1 

8.2 

The overall effectiveness of the preferred option ............................................................. 64 

Impact on stakeholders ..................................................................................................... 65 

1 

 
 
 
 
8.3 

8.4 

Synergies with other legislation ........................................................................................ 66 

REFIT (simplification and improved efficiency) ............................................................. 67 

9.  How would actual impacts be monitored and evaluated? ..........................................................69 

Annexes ...............................................................................................................................................71 

Annex 1: Procedural information ................................................................................................. 71 

Annex 2. Stakeholder consultation – Synopsis report .................................................................. 75 

Annex 3. Who is affected by the initiative and how? .................................................................. 89 

Annex 4. Analytical methods used in preparing the impact assessment ...................................... 95 

Annex 5: Policy options detailed measures ................................................................................ 105 

Annex 6: Market developments ................................................................................................. 112 

Annex 7: Glossary ...................................................................................................................... 160 

Annex 8: Mapping of national measures to support borrowers amid the COVID-19 crisis ...... 167 

Annex 9: Approach to monetisation of cost benefits ................................................................. 169 

Annex 10: References and documentation reviewed ................................................................. 204 

Annex 11: List of abbreviations ................................................................................................. 235 

2 

 
 
 
 
 
 
1.  INTRODUCTION: POLITICAL AND LEGAL CONTEXT 

Political context 

Directive  2008/48/EC  on  credit  agreements  for  consumers  (“the  Consumer  Credit 
Directive”  or  “the  Directive”)  aims  at  securing  a  consistently  high  level  of  protection 
across the EU for consumers taking out loans, thus contributing to consumer confidence. 
The Directive also seeks to create the best possible conditions for the  free movement of 
credit offers and to establish a level playing field for providers in different Member States. 

The Commission evaluated the Directive in 2018-2019, following a 2017 REFIT Platform 
opinion on Article 4 of the Directive regarding standard information to be provided when 
advertising consumer credit agreements. In 2020, the Commission presented the results of 
the  Evaluation  in  a  Staff  Working  Document  and  an  Implementation  Report  to  co-
legislators  on  the  Directive,  as  well  as  an  externally  contracted  study.1  This  full-fledged 
Evaluation,  while  establishing  that  the  objectives  pursued  by  the  Directive  remain 
relevant, highlighted a number of areas for improvement. The main problems identified 
include  the  restricted  scope  of  the  Directive,  issues  about  the  content  and  disclosure  of 
information to consumers and insufficient safeguards to ensure responsible lending. The 
Directive also lacks provisions dealing with events of exceptional and systemic economic 
disruption (such as the one caused by the COVID-19 crisis). 

The  consumer  credit  sector  has  been  profoundly  transformed  by  the  digital  transition. 
New actors such as peer-to-peer lending platforms have emerged and traditional providers 
are  increasingly  using  online  sales  channels.  New  products  such  as  short-term  high-cost 
loans, that can lead to significant costs for the borrower, are more and more marketed and 
sold  online.  The  growing  use  of  digital  devices  affects  the  way  in  which  pre-contractual 
information is provided to consumers. Also, automated decision-making for credit scoring 
and  the  use  of  personal  data  not  directly  provided  by  consumers  for  assessing  their 
creditworthiness  raise  questions  in  terms  of  consumer  and  data  protection  and  potential 
discrimination  from  decisions  based  on  opaque  algorithms.  Finally,  the  COVID-19  crisis 
has greatly impacted the credit market and consumers, especially vulnerable ones, leading 
to an increased financial vulnerability of many EU households.  

The  von  der  Leyen  Commission  through  its  Work  Programme  20202  recognised  the 
significant  impact  of  the  digital  transition  in  everyday  life  and  included  the  need  for  a 
Europe  fit  for  the  digital  age  among  its  headline  ambitions.  The  Commission  also 
committed to giving a new push for European democracy, including by aligning consumer 
protection  with  contemporary  realities  -  notably  cross-border  and  online  transactions  -  to 
empower  consumers  to  make  informed  choices  and  play  an  active  role  in  the  digital 
transformation of society.  

1 These documents published in November 2020. See  the  CCD Evaluation Better Regulation  webpage and 
the DG JUST webpage on consumer credit. 
2  Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European  Economic 
and Social Committee and the Committee of the Regions, Commission Work Programme 2020, A Union that 
strives for more, COM(2020) 37 final.  

3 

 
 
 
                                                           
In this context, the Commission decided to review the Consumer Credit Directive, in 
line  with  Better  Regulation  principles,  to  ensure  enhanced  consumer  information  and 
understanding  of  consumer  credits,  and  to  better  protect  consumers  from  irresponsible 
lending  practices.  The  Consumer  Credit  Directive’s  review  was  included  in  the  REFIT 
annex  of  the  2020  Commission  Work  Programme,  with  a  potential  new  legislative 
proposal scheduled for the second quarter of 2021.3 The Directive’s review is apposite to 
ensure  better  consumer  empowerment  and  protection  in  synergy  with  other  simultaneous 
initiatives that the Commission is undertaking.  

First,  the  New  Consumer  Agenda,4  which  presents  a  vision  for  an  EU  consumer  policy 
from 2020 to 2025, includes the key priority areas accompanying the digital transformation 
and  of  taking  into  account  specific  needs  of  consumer  groups  susceptible  of  being 
vulnerable. Therefore the agenda already highlighted the intention to revise the Consumer 
Credit Directive (action  10) but  also  to  devise actions to  enhance debt  advice services in 
Member States (action 15). The Agenda also highlights the synergies of such actions with 
the ongoing review of other existing legislation, such as  the Mortgage Credit Directive, 
the  Payment  Account  Directive  and  the  Distance  Marketing  of  Financial  Services 
Directive. 

Secondly,  in  September  2020,  the  Commission  adopted  a  Digital  finance  package, 
including  a  Digital  finance  strategy  and  legislative  proposals  on  crypto-assets  and 
digital  resilience,  for  a  competitive  EU  financial  sector  that  gives  consumers  access  to 
innovative  financial  products  while  ensuring  consumer  protection  and  financial  stability. 
The  package  supports  the  EU’s  ambition  for  a  recovery  that  embraces  the  digital 
transformation.  In  2020,  the  Commission  also  published  a  White  Paper  on  Artificial 
Intelligence presenting options to promote the uptake of Artificial Intelligence but also to 
address  the  risks  associated  with  certain  uses  of  this  new  technology,  followed  by  a 
Proposal  for  a  Regulation  laying  down  harmonised  rules  on  artificial  intelligence 
(Artificial Intelligence Act) published in April 2021. 

In addition, the new Capital Markets Union action plan, published in September 2020, 
proposes several actions to support a green, digital, inclusive and resilient post COVID-19 
economic recovery, including an action on empowering citizens through financial literacy. 
The  action  plan  also  announces  a  renewed  sustainable  finance  strategy  that  the 
Commission  will  put  forward  to  increase  private  investment  in  sustainable  projects  and 
activities. 

Finally, the continuous efforts of the Commission towards deepening the Economic and 
Monetary  Union  (EMU)  by  2025  are  to  be  supported  by  an  increased  cross-border 
integration  and  risk  reduction  in  the  banking  system,  notably  as  regard  non-performing 

3See Annexes to Adjusted Commission Work Programme 2020  
4 European Commission, 2020, Communication: New Consumer Agenda Strengthening consumer resilience 
for sustainable recovery, COM/2020/696 final. 

4 

 
 
 
                                                           
loans. In 2019 consumer lending non-performing loans (NPLs) represented more than 25% 
of household NPLs and roughly 10% of total NPLs.5 

Legal developments 

The  Directive,  which  was  adopted  in  2008,  covers  consumer  credit  between  EUR  200 
and EUR 75 0006, such as loans granted for personal consumption, including automotive 
vehicles,  household  goods  and  appliances,  travels,  as  well  as  some  overdrafts  and  credit 
cards.  Overdraft  facilities  to  be  repaid  within  a  month,  interest-free  credits,  leasing 
agreements without an obligation to purchase are among the main types of credits excluded 
from its scope.7   

The  main  objectives  of  the  Directive  are  to  ensure  that  all  consumers  enjoy  a  high  and 
equivalent  level  of  protection  across  the  Union  as  well  as  to  create  a  genuine  internal 
market for consumer credit (Member States cannot maintain or introduce in their national 
law provisions diverging from those laid in the Directive for harmonisation purposes). This 
means  that,  where  no  such  harmonised  provisions  exist,  for  example  due  to  scope 
limitation,  Member  States  remain  free  to  maintain  or  introduce  national  legislation,  and 
most of them did so.8 

Along the years, a number of relevant pieces of legislation complementing the CCD have 
been  enacted,  for  instance,  the  Mortgage  Credit  Directive  (MCD)9  or  the  General  Data 
Protection  Regulation  (GDPR).  In  fact,  there  are  a  number  of  similarities  between  the 
Consumer Credit Directive and the Mortgage Credit Directive: they both share a number of 
similar  definitions  and  both  pieces  of  legislation  are  currently  struggling  with  certain 
similar  definitions  (example:  whether  peer-to-peer  lenders  fall  under  the  definition  of 
‘creditor’  or  ‘creditor 
legislation  set  rules  on 
creditworthiness assessment, with the MCD adopting a more prescriptive approach (ban on 
negative  creditworthiness  assessment  and  more  precise  text  of  possible  data  used  for  the 
assessment).  The  MCD  also  provides  safer  and  sounder  rules  with  regard  to  responsible 
lending, protection of over-indebtedness and regulates practices till now not fully regulated 
by the Consumer Credit Directive (example: product tying practices, advisory service and 
knowledge and competence of staff). The GDPR is of particular importance when lenders 
are carrying out a credit assessment. 

intermediaries’).  Both  pieces  of 

The application of the Directive revealed some issues which were not clear, as they rose 
in subsequent case-law of the Court of Justice. The main issues are the following: 

5In  September  2019,  NPL  ratios  were  considerably  higher  for  consumer  credit  (5.5%)  than  for  mortgages 
(2.5%). The decrease in consumer lending NPLs (24%) since 2015 was significantly smaller than the overall 
decrease  in total NPL volume (45%). EBA, Thematic  note on consumer lending in the EU banking sector, 
2020. 
6 and over when the credit is destined for the renovation of a residential property. 
7 See Art. 2 (2) of the Consumer Credit Directive. 
8 Support study to the Consumer Credit Directive Evaluation, Annex 1: Thresholds and scope, p. 148. 
9  Directive  2014/17/EU  of  the  European  Parliament  and  of  the  Council  of  4  February  2014  on  credit 
agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC 
and 2013/36/EU and Regulation (EU) No 1093/2010, OJ L 60, 28.2.2014, p. 34 

5 

 
 
 
                                                           
Right of withdrawal: Article 14(1) provides the consumer with a 14 calendar day period 
in  which  to  withdraw  from  the  credit  agreement  without  giving  any  reason.  The  date  of 
commencement  of  the  14  calendar  day  start  either  from  the  day  of  the  conclusion  of  the 
credit  agreement,  or  from  the  day  on  which  the  consumer  receives  the  contractual  terms 
and conditions and information in accordance with Article 10 of the Directive. This latter 
situation has given rise to a number of pending preliminary rulings for one Member State, 
namely Germany. The question raised by the national court concern, in particular, whether 
the right to withdrawal can be invoked forever whenever Article 10 of the Directive is not 
fully complied with. 

Creditworthiness assessment: The Evaluation of the Directive highlighted the Member 
States’  variant  interpretations  of  the  creditworthiness  assessment  provisions,  which 
created  a  diverse  landscape  as  regards  the  requirements  for  such  assessment.  The  use  of 
new  technologies  and  alternative  types  of  data  has  led  to  concerns  about  personal  data 
protection,  particularly  about  transparency,  relevance,  proportionality  and  fairness.  There 
are  also  concerns,  predominantly  expressed  by  consumer  organisations  in  the  context  of 
the  surveys  accompanying  the  Evaluation  and  Impact  Assessment  support  studies 
conducted by external consultants, about granting loans despite a negative creditworthiness 
assessment.    According  to  the  Court  of  Justice,  the  obligation  to  assess  the  borrower’s 
creditworthiness  is  intended  to  protect  consumers  against  the  risks  of  over-
indebtedness  and  bankruptcy.10  It  has  also  been  ruled  that  national  rules  obliging  the 
creditor  to  refrain  from  granting  credit  if  there  is  a  lack  of  the  consumer’s 
creditworthiness, are compliant with the Directive.11 

In  May  2020,  the  European  Banking  Authority  (EBA)  published  Guidelines  on  loan 
origination  and  monitoring,  applying  as  of  30  June  2021.  These  guidelines  aim  to  bring 
together the prudential framework and consumer protection aspects of credit granting. 

2.  PROBLEM DEFINITION  

As  demonstrated  by  the  Evaluation,12  the  Directive’s  objectives,  namely  ensuring  high 
standards of consumer protection and fostering the development of an internal market for 
credit,  have  only  been  partially  achieved.  The  link  between  problems  identified  in  this 
Impact Assessment as well as in the preparatory study, their drivers and their consequences 
is visualised in the problem tree below. 

10 Judgment of 5 March 2020, OPR-Finance, C-679/18, ECLI:EU:C:2020:167, paragraph 21. 
11 Judgment of 6 June 2019, Schyns, C-58/18, ECLI:EU:C:2019:467, paragraph 48. 
12 ICF, 2020.  

6 

 
 
 
                                                           
Figure 1 Problem tree 

Drivers 

Driver 1: Market developments 
linked to digitalisation making 
regulatory framework 
inadequate (e.g. new common 
types of credit not covered), 
actors) 

Driver 2: Developments in 
consumer behavior, often 
exploited by providers, making 
regulatory framework 
inadequate 

Driver 3: Lack of legal clarity 
since some definitions or terms 
in the Directive are too vague 

Driver 4: Insufficient equity 
considerations (e.g. no measures 
to support consumers hit by over-
indebtedness) 

Driver 5: Insufficient 
harmonisation between Member 
States leading to imperfect 
competition 

Problems 

Consequences 

Problem 1: Consumers taking out loans face detriment 
that could be avoided 

Sub-problem 1.1: Emergence of new risky credit products and new 
actors not (clearly) regulated 

Sub-problem 1.2: Limited consumer awareness of the key 
elements and costs of the credit product they obtain 

Sub-problem 1.3: Existence of practices by credit providers 
exploiting consumer’s situation and patterns of behaviour 

Sub-problem 1.4: Credits granted without thorough assessment of 
the consumer creditworthiness 

Sub-problem 1.5: Certain consumers (because of individual 
circumstances or systemic economic disruptions) fall easily into 
over-indebtedness 

Problem 2: The competitiveness of the internal market is 
not fully achieved 

Sub-problem 2.1: Barriers for credit providers to business 
expansion across borders 

Sub-problem 2.2: Difficulties for consumers to access cross-border 
credit offers 

Sub-problem 2.3: Information requirements for advertisement on 
certain channels create unnecessary burden for businesses 

7 

For consumers:  
- Consumers harmed when obtaining certain 
types of credit 
- Sub-optimal choices (additional costs) 
- Increased over-indebtedness  
- Low level of trust  
- Unmet demand for cross-border credit 
(expected to increase with digitalisation)  

For businesses: 
- Imperfect competition, due to different sets of 
rules for different kinds of credits  
- Few incentives to engage in responsible 
lending practices 
- Burden from unclear obligations  
- Burden from information related obligations 
that do not benefit consumers 
- Financial risks because of loan defaults  

For public authorities: 
- Burden from increased consumer complaints, 
and regulatory fragmentation in case of cross-
border cases 

For society:  
- Increased level of over-indebtedness and its 
negative externalities 
- Risks for financial stability 

 
 
 
 
 
2.1 What are the problem drivers? 

There  are  five  key  problem  drivers  why  the  Directive’s  two  main  objectives  were  only 
partially achieved: 

1)  Since  the  entry  into  force  of  the  Directive,  the  digitalisation  has  led  to  new  market 
developments  which  are  not  adequately  captured  by  the  current  limited  scope  of  the 
regulatory  framework:  for  instance,  short-term  high  cost  loans  frequently  provided 
online  are  often  below  EUR  200.  The  digital  transformation  is  radically  changing 
consumers’ lives and its wider implications cut across the other problem drivers.  

2)  Consumer behaviour and preferences have evolved over the past ten years, and for 
instance  a  greater  emphasis  seems  to  be  put  on  factors  like  fast  access  to  credit.13 
Behavioural biases are not adequately addressed by the current Directive and this has 
resulted in consumer protection gaps - for instance, against exploitative practices like 
cross-selling of expensive payment protection insurances not needed by the consumer.   
3)  Some of the Directive’s  definitions have not withstood the test of time, leading to 
legal uncertainty (e.g. peer-to-peer lending platforms are not explicitly captured in the 
definition of ‘creditor’ or ‘credit intermediary’).  

4)  The  Directive  does  not  address  adequately  equity  considerations  in  the  sense  that, 
apart  from  a  recital  (Recital  26)  alluding  to  the  problem,  the  legal  text  does  not 
establish measures to support consumers vulnerable to over-indebtedness.  

5)  Finally  what  hampered  the  full  achievement  of  the  two  objectives  is  insufficient 
harmonisation  between  Member  States,  allowed  by  the  vague  provisions  of  the 
Directive, leading to an unlevel playing field.  

These  five  drivers  have  led  to  two  overarching  problems.  On  the  one  hand,  when 
consumers  take  out  loans  some  of  them  may  engage  in  very  costly  credit  agreements 
without being fully aware and/or may become unable to pay back their credit, leading to 
unexpected fees, and possibly to a dramatic deterioration of their financial situation and to 
over-indebtedness. On the other hand, the competitiveness of the internal market is not yet 
fully achieved, and the  market  for consumer credits remains largely  fragmented. Each of 
these problems is divided into sub-problems, described below. 

2.2 What are the problems? 

Problem 1: consumers taking out loans face detriment that could be avoided 

taking  out 

In  the  light  of  market,  technological  and  behavioural  developments  since  the  Directive’s 
loans  are  not  adequately  protected  from 
adoption,  some  consumers 
arrangements  that  will  become  unsustainable  for  them.  Ill-suited  credits  can  prompt  debt 
spirals  and  over-indebtedness,  which  have  become  serious  social  issues  in  some  EU 
regions.  In  2019,  2%  of  EU  households  had  arrears  on  hire  purchase  instalments  or 
other loan payments, and were at risk of over-indebtedness, with big discrepancies among 
Member States.14 The number of over-indebted households is expected to increase due to 

13 See Annex 6 Market developments – Impact of digitalisation. 
14 See Annex 6 Market developments. 

8 

 
 
 
 
                                                           
the  COVID-19  crisis,  which  has  deeply  disrupted  the  EU  economy  in  the  beginning  of 
2020.  Many  consumers  have  already  faced  important  income  losses.15    A  recent  survey 
published by the Commission on 12 March 2021 shows that on average 38% of consumers 
have concerns on how they are going to pay their bills next month and the situation varies 
greatly among Member States (from 7% to 71%)16.  

As  shown  by  the  Market  Monitoring  Survey  2019,  just  under  three  quarters  of  EU27 
consumers  trust  the  loans,  credit  and  credit  cards  market,  and  9%  of  them 
experienced  problems.17  Of  those  who  experienced  a  problem,  4  in  10  experienced 
financial detriment as a result (around 7 in 10 for consumers who find it very difficult to 
manage  financially),  and  around  three  in  four  experienced  other,  non-financial  impacts. 
The sources of consumer detriment include: insufficient protection e.g. because of loose 
creditworthiness assessments allowing consumers to take out credits even when this is not 
warranted  by  their  financial  situation;  practices  and  business  conduct  of  credit  providers 
enticing  consumers  to  take  out  credits  they  cannot  afford;  unclear  and  non-transparent 
disclosure  of  prices  and  fees  limiting  consumer  understanding  of  the  real  costs  of  the 
credit; and inappropriate use of personal data.18 

The underlying problems are presented below. 

Sub-problem  1:  Emergence  of  new  potentially  or  actually  risky  credit  products  not 
necessarily covered by the Directive and new actors not (clearly) regulated 

The  consumer  credit  market  changed  considerably  since  2010,  as  a  result  of  the  strong 
impact  of  digitalisation,  and  of  the  growing  presence  of  new  products,  such  as  payday 
loans,19 often offered by non-bank lenders.20 The share of non-bank lending to households 
has seen a dynamic growth over the recent years.21 Even though the market for consumer 
credit  is  still  led  by  traditional  operators,  new  market  players,  in  particular  fintech 
companies,22 have also appeared on the market.  

One  of  the  most  important  credit  products  provided  by  fintech  companies  is  unsecured 
loans  through  peer-to-peer  (P2P)  lending  platforms.23  These  platforms  seek  to  match 
individual  borrowers  with  individual  lenders,  often  tapping  onto  a  segment  of  consumer 
lending  underserved  by  banks  (e.g.  because  they  received  a  negative  creditworthiness 
assessment). Some of the most successful in Europe are Auxmoney in Germany, Mintos in 

15 Survey conducted by Kantar for the European Parliament, November 2020. 
16 https://ec.europa.eu/info/sites/info/files/future_financial_concerns_-_country_distribution_0.pdf 
17  Including  loss  of  time,  anger  or  frustration,  stress,  anxiety  and  other  negative  impacts  on  mental  health. 
This is higher than the proportion of consumers  who had problems  with bank accounts or insurances (7%) 
who however were more likely to make a complaint. Market Monitoring Survey Report 2019/2020. 
18 FinCoNet, 2019a. 
19 Payday loans warrant particular attention due to the risk of relatively higher detriment that they may imply 
given, among other factors: typically high interest rates and additional fees. 
20 See Annex 7: Glossary. 
21See Annex 6: Market developments – Evolution of the consumer credit market over the recent years.  
22See Annex 7: Glossary. 
23  The  global  volume  of  P2P  consumer  credit  in  2018  was  USD  195  billion  (32 billion,  excluding  China), 
Cambridge Centre for Alternative Finance, 2020. 

9 

 
 
 
                                                           
Latvia  and  Bondora  in  Estonia.24  P2P  lending  may  be  a  convenient  and  quick  way  to 
access  credit,  however,  it  may  involve  important  risks  for  consumers.  The  fast  processes 
may lead to rush decisions.25 Since this new type of lending is not explicitly mentioned in 
the  Directive,  proper  creditworthiness  assessments  may  not  be  carried  out,  even  when 
platforms  act  as  creditors  or  intermediaries  (i.e.  receive  a  fee  for  facilitating  the 
transaction) for professional lenders. Furthermore, consumers might be unsure about their 
rights  and  possible  recourse  in  case  of  problems.  Evidence  from  several  Member  States 
confirms that consumers are reporting issues.26  

The available data on the share of households using a particular product falling under the 
category  of  consumer  credit  is  quite  fragmented.  The  most  common  types  of  consumer 
credit in the market are predominantly credit cards (owned by 44% of EU citizens), and 
personal loans (owned by 13% of EU citizens).27 

The Directive establishes that loans below EUR 200 and above EUR 75 000 are outside its 
scope  of  application.  Evidence  shows  that  small  loan  borrowers  often  have  more  than 
one  loan.  This  is  particularly  dangerous,  since  their  creditworthiness  is  never 
assessed. They are therefore likely to experience early payment problems. Concerns raised 
about  the  minimum  threshold  of  EUR  200  in  the  Directive  also  relate  to  the  fact  that  in 
some Member States EUR 200 represent an important share of the monthly income.28 
In 2019, in Ireland around 300 000 people borrowed from moneylenders.29  

Short term high-cost (STHC) credit, including payday loans, are quick and easy-access 
personal loans which may be useful for consumers seeking to obtain a loan in a simple and 
rapid  way.  These  loans  have  a  clear  growth  potential  in  a  digitalised  market  with  a 
stronger  cross-border  element.  They  can  however  rapidly  lead  to  a  financial 
detriment, in particular for consumers with low or unpredictable incomes. STHC loans are 
often likely to be very expensive, far beyond the rate necessary to integrate the credit risk 
resulting from the borrower profile and the refinancing costs reflecting the monetary policy 
stance.  In  a  recent  mystery  shopping  exercise  conducted  in  Ireland,  Spain  and  Romania, 
the average APR for the small value (below EUR 180) payday loans analysed was found to 
be  2 543%.  Payday  loans  are  popular  in  some  countries  (e.g.  Lithuania)  and  have  been 
growing  fast  in  others  (e.g.  Sweden,  Poland  and  Czech  Republic),  also  thanks  to 
digitalisation that allows for quicker, automated processes.30 Since the amount borrowed is 

24See Impact assessment support study. 
25 In a 2021 mini-sweep on consumer credit, two P2P lending instances were checked and both were flagged 
for suspected irregularities related to the standard information in advertising, as the initially displayed credit 
cost was not presented in a clear, intelligible and unambiguous manner while inclusive of all additional costs. 
26 See Annex 6 Market developments. 
27 Eurobarometer 443 figures, indexed for 2018. Credit cards can have either a “next month full debit” option 
or a “monthly partial repayment” option – allowing consumer to make partial payments every month. 
28 See Annex 6: Market developments.  
29 Moneylending loans are short-term high-cost loans, often for low amounts, with APR of 23% or more. 
https://www.irishtimes.com/business/personal-finance/high-interest-irish-moneylenders-experience-big-drop-
in-activity-1.4491071    
30 74% of the operators offering STHC credit in the EU are new operators. LE Europe et al., 2019.  

10 

 
 
 
                                                           
typically lower than the minimum threshold of EUR 200, these loans often fall beyond 
the scope of the Directive.  

In the absence of EU rules covering small amount STHC loans, most Member States have 
adopted rules to address the design of credit products, denoting the perceived importance 
of the problem at national level. The most common measure is the introduction of interest 
rate  or  APR  caps,  adopted  by  23  Member  States.31  However,  the  typology  of  caps  and 
their level vary significantly. Caps have led, in some cases, to lowered default notices and 
to  the  disappearance  of  potentially  risky  products  such  as  payday  loans  (e.g.  Belgium, 
Slovakia).32 STHC loans are growing in Member States with no or high caps and they are 
the main reason for consumer complaints in some of them (e.g. Bulgaria, Malta).33 

Revolving credit including credit cards warrant attention too.34 The term revolving credit 
encompasses any credit that is automatically renewed as debts are paid off, including thus 
credit  cards.  The  Directive’s  evaluation  estimated  that  up  to  20  million  EU  consumers 
face  problems  with  their  credit  card  in  terms  of  unrequested  extensions  of  the  credit 
line.35  Revolving  credit  and  credit  cards  raise  concern  among  consumer  associations 
because of the potential  harm that can stem from the flexibility of these  contracts  due to 
behavioural biases.36 The situation of consumers under the impression of having unlimited 
credit possibilities from  the moment  they pay back a part of their debt  every month, can 
suddenly become unsustainable because of high costs non-transparently disclosed.37 These 
credits  frequently  amount  to  less  than  EUR  200,  and  are  hence  exempted  from  the 
Directive’s  obligations.  In  France,  revolving  credit  was  identified  as  a  key  factor  behind 
over-indebtedness  linked to  credit. Since the introduction of specific rules in  2010, over-
indebtedness related to revolving loans decreased by 47%.38  

Loans  above  EUR  75 000  are  excluded  from  the  Directive’s  scope.  However,  the 
Mortgage Credit Directive has widened the scope of the Consumer Credit Directive in the 
sense that the latter shall apply to credit agreements the purpose of which is the renovation 
of  a  residential  immovable  property  involving  a  total  amount  of  credit  above  EUR 
75 000.39 However there is no comprehensive data on such big amount loans.  

There are also other credit agreements, described below, which fall outside the scope 
of the Directive and can entail risks for consumers:40 

31 See Annex 6 Evolution of the consumer credit market over recent years. 
32 ICF, 2020 (Legal analysis); FinCoNet, 2017.  
33 See Annex 6: Market developments – Evolution of the consumer credit market over the recent years.  
34 In a 2021 mini-sweep on consumer credit, 5 out of 16 revolving credit products (31%) were identified with 
potential  irregularities  related  to  the  presentation  of  information  in  advertising,  including  because  of  the 
likelihood of the main characteristics of the credit and its costs/special price advantage to mislead consumers. 
35 See Annex 4: Consumers affected in the status quo.  
36 Optimism bias, myopia, cumulative cost neglect. Annex 6: Market developments – Impact of digitalisation 
37 EBA Consumer Trends Report 2020/2021, EBA/REP/2021/04.  
38 National authority.  
39 See article 46 of Directive 2014/17/EU. 22% of the respondents to the survey performed for the Directive’s 
Evaluation said they had got a consumer credit for housing renovation. 
40 See Article 2(2) of the Consumer Credit Directive. 

11 

 
 
 
                                                           
Credit  agreements  where  the  credit  is  granted  free  of  interest  and  without  any  other 
charges and credit agreements where the credit has to be repaid within three months 
and  only  insignificant  charges  are  payable  are  not  captured  within  the  scope  of  the 
Directive (Article 2(2)(f)).41 These are generally used to finance the purchase of products 
such as household appliances, in the form of point of sale financing, concluded between 
the  consumer  and  the  retailer  selling  the  good,  acting  either  as  a  credit  provider  or 
intermediary. Moreover, new digital financial tools that let consumers make purchases and 
pay them off over time, i.e. ‘Buy Now Pay Later’ products,42 are growing fast in the EU, 
and raise concerns among consumer organisations.43 The number of EU citizens who have 
contracted an interest free loan  has been estimated to  be  around 7  million.44Although 
interest  free  credits  may appear as very  convenient  and having  low or no costs linked to 
them, since the lender is paid by the merchant (via a fixed or variable fee), they may entail 
high fees for late or missed payments.45,46 The risk lies in the fact that consumers are often 
poorly  informed  about  the  conditions  of  the  credit,47  frequently  very  strict  on  delays. 
Moreover, such financial products promote quick decisions, enticing people to overspend 
and putting them at risk of taking on financial commitments that they may not be able to 
honour.48 Concern at national level is shown by the decision of certain Member States to 
apply some of the Directive’s provisions to all consumer credits, regardless of the interest 
rate charged.49  

Overdraft  facilities  allow  consumers  to  mobilise  amounts  for  their  immediate  financial 
needs,  which  exceed  the  balance  in  their  current  account.  Usually,  overdrafts  entail  high 
costs if they are not repaid within a certain period, especially for unarranged ones.50 If the 
period  does  not  exceed  a  month,  the  credit  is  not  covered  by  the  scope  of  the  Directive 
(Article 2(2)(e)).51 Overdraft facilities are an example of loans widely used. The number of 
EU  citizens  with  an  overdraft  facility  is  estimated  between  20  and  40  million52. 

Sveriges 

Konsumenter, 

https://www.sverigeskonsumenter.se/nyheter-press/nyheter-och-

41 Depending on whether there are considered to be without ‘charges’ or ‘insignificant charges’. 
42 See Annex 6: Market developments – Evolution of the consumer credit market over the recent years. 
43 
pressmeddelanden/klarna-ar-otydliga-och-lockar-till-konsumtionslan/, consulted on 23 February 2021. 
44 Based on Eurofinas data  (2019) on consumers taking consumer credit at PoS extrapolated to the EU-27. 
See Annex 4: Consumers affected in the status quo. 
45 ICF, 2020; EBA, 2019a. 
46 For ‘Buy Now Pay Later’ providers that charge late payment fees the revenue from such fees can make up 
a significant portion of the firms’ overall revenue. UK FCA, 2021. 
47 For instance, low fees are usually mentioned by the retailer but not provided in an APR calculation. 
48 Eurofound, 2020a. 
49 e.g. Germany applies the right of withdrawal. ICF, 2020; Finance Watch, 2018 and 2019. 
50 In the UK, for unarranged overdrafts, the price regularly exceeds the equivalent of an interest rate of 10% 
per day and are more likely to be used by vulnerable consumers, see Annex 6 Market developments.  
51  The  Directive  introduces  specific  obligations  in  connection  with  overdraft  facilities  (Art.  12).  For 
overdrafts  where  the  credit  has  to  be  repaid  on  demand  or  within  three  months,  and  in  the  case  of  credit 
agreements in the form of overrunning, lighter regimes apply (Art. 2(3) and (4), and Art. 18).  
52 As of 2018, overdraft facilities made up 30% of a consumer outstanding debt in SE, followed by 15% in IT 
and DE while in most of the other countries this share was typically below 10%. Deloitte, 2019. 

12 

 
 
 
                                                           
National data suggest that they more likely to be needed, and therefore frequently used, by 
lower income households,53 resulting in detriment for the more vulnerable consumers.54 

According to Article 2(2)(d) of the Directive, leasing agreements  where an obligation to 
purchase the object of the agreement is not laid down either by the agreement itself or by 
any  separate  agreement,  do  not  fall  under  the  scope  of  the  Directive.  Finance  Watch 
estimates that “hire purchase”, a common type of leasing agreement which envisages but 
does  not  require  the  purchase  of  the  good,  represents  around  12%  of  the  total  credit 
provided  to  households,  although  it  accounts  for  26%  in  Member  States  who  joined  the 
Union as of 2004.55  Leasing agreements are being increasingly used to finance automotive 
purchases.  The number of EU citizens with a car leasing agreement is potentially high 
as 13 million new passenger car registration are done in the EU annually.56 In France, the 
number of leasing transactions increased by more than three times between 2008 and 2019. 
In  Ireland,  it  represented  the  largest  amount  of  personal  financing  by  value  in  2019,  at 
approximately EUR 3.1 billion.57 Risks for consumers in taking such financing solution are 
linked to the absence of information enabling them to compare offers (for example a basic 
consumer credit arrangement could be less costly) as well as to opaque fees structures.58 

Credit  provided  by  pawnbrokers/pawnshops,59  offering  secured  loans  using  personal 
property  as  collateral,  is  still  widely  used  across  the  EU,  especially  by  vulnerable 
consumers who  cannot  resort to  more formal  sources of  credit (e.g. banks).60 Consumers 
are  not  always  clearly  informed  about  the  applicable  conditions  or  about  the  absence  of 
equivalent  consumer  protections  when  entering  into  unregulated  agreements.  They  are 
often  unaware  of  the  high  interest  rates  usually  attached  to  these  contracts61  and  they  do 
not always receive the ‘surplus’ money that they are owed in cases where the pawnbroker 
sells the collateral for a price above the redemption value.62 It is important to stress that the 
pawnshop collateralised has no evident cross-border potential. 

53 In France, while 22% of lower-income households (first quintile) uses overdrafts frequently, only 12-13% 
of middle-income households (second and third quartile) does so. INSEE, 2016. 
54 According to the UK FCA 2018 study,  a strong, positive correlation between vulnerability of consumers 
and unarranged overdraft charges can be established. 
55 They include Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, 
Poland, Romania, Slovenia and Slovakia. Finance Watch, 2020a, Basic Financial Services. 
56 https://www.acea.be/statistics/tag/category/by-country-registrations. 
If 30% of new car buyers use a lease agreement, this potentially represents 12 million people with a 3 years 
lease ongoing for their car.  
57 ICF, Impact Assessment support study. 
58 Typical fees and costs include: documentation fees, interest surcharge for missed repayments, penalty fees 
for missed or late payments, completion fee for ownership of the goods to pass to consumers, rescheduling 
charge, or a charge if the goods are repossessed. Citizens Information, 2020. Hire purchase agreements. 
59  Art.  2(2)(k)  excludes  from  the  Directive’s  scope  credit  agreements  upon  the  conclusion  of  which  the 
consumers are requested to deposit an item as security and their liability is limited to that pledged item. 
60 See Annex 6 Market developments – Evolution of the consumer credit market over the recent years. 
61 CIVIC Consulting, 2013. 
62 UK Financial Conduct Authority, 2018, Pawnbroking sector review. 

13 

 
 
 
                                                           
In  the  light  of  the  above  described  problems,  in  order  to  ensure  effective  protection  of 
consumers taking out loans, some Member States opted to extend the Directive’s rules to 
credit below EUR 200,63 leasing agreements,64 or to all overdraft facilities.65 

Sub-problem 2:   Limited consumer awareness of the key elements and costs of the credit 
product they obtain   

Articles 4 and 5 of the Directive indicate the elements of the consumer credit agreement 
about which consumers must be informed before entering a credit agreement. Article 4 
concerning  standard  information  to  be  included  in  advertising  was  the  object  of  a 
REFIT Platform Opinion in 2017.66 Article 5 specifies that pre-contractual information 
must be presented in good time before signing the agreement by means of a standard form 
(SECCI). The Evaluation found that these articles have succeeded in positively impacting 
the overall level  of  consumer protection and ensuring  a certain  level  of  harmonisation  in 
how  information  is  provided,  notably  through  the  adoption  of  the  SECCI.  Nevertheless, 
there are elements that hamper their effectiveness, especially on digital means.67 

With  regard  to  Article  4  of  the  Directive,  although  it  establishes  that  information  in 
advertising  must  be  presented  to  consumers  in  a  ‘clear,  concise  and  prominent  way’,  it 
does  not  establish  exactly  how  the  information  should  be  provided.  Many  national 
authorities, mentioned that even though credit providers are generally complying with their 
obligation  to  provide  standard  information  at  advertising  stage,  key  information  is  often 
not prominently displayed.68,69 By presenting certain information in (non) prominent way, 
the  advertising  message  can  become  misleading.  In  a  mystery  shopping  exercise70 
conducted in 2020, in almost 20% of cases, malpractices were experienced in advertising 
material,  and  in  particular  for  revolving  credits  online.  It  is  estimated  that  around  10 
million  borrowers  may  be  affected  by  misleading  advertising.  Consumers  are  also 
concerned  about  profiling  and  higher  prices  linked  to  targeted  advertising  based  on 
pervasive tracking and monitoring.71  

From  the  perspective  of  consumers,  when  credits  are  advertised  through  certain 
communication  channels  such  as  radio  or  TV  broadcasts,  with  important  information 
either shown for a very limited amount of time or spoken very quickly, they do not have 
the time nor the necessary attention span to process detailed information.  

63 BE, BG, CZ, DK, EE, FI, HU, IT, LV, PT, SK extended some or all provisions of the Consumer Credit 
Directive to credits below EUR 200, see ICF, 2020. 
64 AT, EE, HU, IT, FI, FR, PT, see ICF, 2020. 
65 AT, BE, FI, PT, FR, see ICF, 2020. 
66 The Directive’s Evaluation analysed the potential for simplification of the advertisement without harming 
the consumer protection objective of the Directive, but this could not be ascertained. 
67  In  a  2021  mini-sweep  on  consumer  credit,  for  websites  checked  on  smartphones  (27  out  of  118),  the 
suspected infringement rate was 44%(mostly related to advertising), higher than the average (36%). 
68 ICF, 2021. 
69 In a 2021 mini-sweep , 36 out of 91 personal loans (nearly 40%) were suspected of infringements, mostly 
as regards the requirements on information in advertising. In most cases, the main characteristics of the offer, 
were omitted or presented in an unclear, unintelligible or ambiguous manner. 
70 Finance Watch, 2021.  
71 Regarding online targeted advertising 68% consumers are concerned that their online data is collected / a 
profile is made about them. Consumer Conditions Survey 2021: Consumers at home in the single market. 

14 

 
 
 
                                                           
Moreover, the lengthy and complex information disclosed to them at pre-contractual 
stage  appears  not  to  be  entirely  effective  in  helping  them  to  properly  process  the 
information they need in order to compare offers and reach decisions that are in their best 
interest.  For  instance,  only  46%  of  the  participants  to  the  Finance  Watch  mystery 
shopping72  reported  they  could  compare  consumer  credit  products  before  making  a 
decision  to  take  out  a  loan.  Behavioural  insights  show  that  various  factors  play  a  role  in 
this  issue:  information  overload,  the  complexity  of  the  information  provided  to 
consumers,  and  practical  limits  to  the  full  efficiency  of  the  “rational  consumer 
concept”  due  to  the  numerous  behavioural  and  cognitive  biases  affecting  consumers.73 
Moreover,  Art.  5  aims  to  ensure  that  consumers  are  given  enough  time  to  reach  an 
informed  decision  “in  good  time  before”  signing  an  agreement.  However,  this  open 
worded  text  has  led  to  a  situation  whereby  consumers  are,  sometimes,  given  very  little 
time,  or  no  time  at  all,  to  decide.  In  fact,  quite  often  pre-contractual  information  is 
provided at the same time as the signature of the credit contract.74 It is estimated that up 
to  9.8  million  consumers  find  the  SECCI  unhelpful  or  very  unhelpful,  and  up  to  29 
million consumers do not seem to understand credit offers.75 

As  generally  agreed  by  stakeholders,76  the  need  to  avoid  information  overload  and  to 
adapt  the  requirements  to  digital  means  of  communication  are  key  issues  to  be 
addressed.  With  the  further  use  of  digital  tools  to  take  out  credit,  (currently  36%  of 
consumers  are  doing  so  online)77  it  can  be  expected  that  the  risks  associated  to  online 
models will increase. 

Sub-problem 3: Existence of practices by credit providers exploiting consumer’s situation 
and patterns of behaviour  

Over the years, consumers’ decision-making processes to take up credit have changed 
as a result of digitalisation and the transformation of consumption habits. Nowadays, the 
consumer journey is often multichannel (both offline and online) and quicker. Consumers 
place greater emphasis on factors such as fast provision done from start to end by a single 
provider (end-to-end processing of the credit agreement) over the location of the physical 
branch  (e.g.  in  relation  to  their  home  location).78  In  context  of  non-physical  interaction 
between  traders  and  consumers,  practices  exploiting  consumer  biases  and  nudging  them 
into sub-optimal choices,  including through dark-patterns79 can be particularly  dangerous 
for the financial sustainability of consumers, in particular the most vulnerable ones.  

72  42%  were  able  to  compare  different  offers  when  purchasing  a  payday  loan  and  29%  different  revolving 
credit offers. Finance Watch, 2021.  
73 See Annex 6 Market developments – Impact of digitalisation. 
74  40%  of  respondents  to  the  CCD  Evaluation  consumer  survey  indicating  that  they  received  it  on  the  day 
they signed the contract. ICF, 2020; LE et al., 2019; ECRI, 2018a.  
75 Based on share of consumers with a credit agreement marking understanding as complicated in the CCD 
Evaluation consumer survey (19%). ICF, 2020. See Annex 4: Consumers affected in the status quo. 
76 See results from interviews and online survey in Annex 2: Stakeholder consultation. 
77 CCD Evaluation consumer survey.   
78 ECRI, 2018. 
79  User-interface  designs  aimed  at  manipulating  consumers.  New  Consumer  Agenda  Communication, 
European Commission, 2020. 

15 

 
 
 
                                                           
Such practices include pre-ticked boxes or making credit products available quickly, in a 
small  number  of  clicks  (products  advertised  as  ‘one-click’  credit).  Consumers  with  low 
digital or financial literacy are particularly vulnerable in this context.80   

Another  practice  employed  by  credit  providers,  or  intermediaries,  which  may  lead  to 
unsuitable  choices  for  consumers,  is  cross-selling.  Cross-selling  is  where  an  additional 
product is sold together with the loan, as either a mandatory (tying) or an optional element 
(bundling). It represents a highly profitable practice for credit providers or intermediaries, 
who  usually  have  agreements  with  insurance  companies  and  receive  commissions  when 
they sell these products.81,82  

The sale of tied insurance policies,83 especially payment protection insurance (PPI) has 
raised concerns84 in some Member States as it is linked to a number of mis-selling scandals 
in the sector.85 The Directive deals with cross-selling only to a certain extent: it establishes 
that when a consumer is obliged to purchase another product together with the credit, the 
cost  of  that  product  must  be  taken  into  consideration  in  the  calculation  of  the  APR. 
However, PPIs can entail disguised high costs which do not always appear to be included 
in  the calculation  of the APR. Product  tying is  considered as  very problematic and some 
Member States adopted measures to limit or ban it.86  

Unsolicited credit offers may entice consumers to take credits which are not suitable for 
their situation. The current Directive text does not address these practices, instead leaving 
it  to  the  Member  States  or  other  Union  instruments,  such  as  the  e-Privacy  Directive 
(2002/58/EC) or the Distance Marketing of Financial Services Directive  (2002/65/EC) to 
regulate  them  to  different  extents.87  While  some  Member  States  have  imposed  a  ban  or 
heavily  regulated  unsolicited  credit  offers  (e.g.  Belgium,  France,  Ireland),  they  are  still 
common practice in many Member States (e.g. Slovenia, Slovakia), in particular for certain 
types of products such as credit cards, sent to consumers who have not requested them or 
whose limit is increased without an explicit request.88 

The  Directive  does  not  provide  full  protection  for  consumers  from  making  unsuitable 
choices also because, while under Article 5(6) of the Directive credit providers are obliged 
to  provide  ‘adequate  explanations’  to  consumers  before  the  signature  of  the  contract,  it 
does not impose to advise consumers for example on suitable credit products in the case 
of ancillary services bundled  with  a credit agreement. The lack of personalised advice is 

80 LE et al., 2019. 
81 Usually credit cards, personal loans, and payday loans. FinCoNet, 2017; Finance Watch, 2018 and 2019. 
The revenue generated is substantial See Annex 6: Market developments 
82 ICF, 2020; LE, 2013. 
83 In a 2021 mini-sweep on consumer credit, in 1 of 6 cases when the conclusion of an insurance contract was 
compulsory, this was not stated in the advertising in a clear, concise and prominent manner. 
84 Financial Services User Group (FSUG), 2019, Opinion on responsible consumer credit lending. 
85See Annex 6: Market developments – Evolution of the consumer credit market over the recent years. 
86  DE  and  FR  introduced  obligations  to  ensure  that  consumers  are  provided  with  clear  explanations  of  the 
additional costs. PT banned product tying and introduced guidelines on the design and marketing of PPIs. 
87 For instance, in Belgium, unsolicited marketing is strictly regulated and credit sales desks in public places 
such as railway stations, shopping centres is prohibited. FSUG, 2019a. 
88 FSUG, 2019a. 

16 

 
 
 
                                                           
one  of  the  key  problems  that  consumers  face  nowadays,  according  to  consumer 
organisations.89  The  Directive  does  not  include  conduct  of  business  obligations  when 
providing credit to consumers either. This is especially relevant given that the performance 
of staff members of most financial services companies is generally assessed based on their 
volume of sale.  

Without  a  harmonised  approach  on  the  design  and  marketing  of  credit  products,  certain 
credit providers are expected to continue potentially misleading practices, not in line with 
responsible lending principles.90 Further Member States may also adopt measures to limit 
the incentives for credit providers to make use of them in a non-coordinated manner. 

Sub-problem  4:  Credits  granted  without  a  thorough  assessment  of  the  consumer 
creditworthiness 

The Directive, in Article 8, imposes an obligation on the creditor 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 consultation of the relevant database. It 
also  mentions  in  Recital  26  that  creditors  should  not  engage  in  irresponsible  lending  or 
give out credit without prior assessment of the consumer’s creditworthiness. The CJEU has 
on  different  occasions  highlighted  that  the  article  on  creditworthiness  assessment  is 
fundamental, as it aims at avoiding over-indebtedness, and that the creditors should ensure 
that this assessment be carried out.91 There are different reasons hindering the Directive’s 
creditworthiness  assessment  provision  effectiveness  in  ensuring  the  suitability  of  credit 
sold to consumers: 

 

 

 

It  does  not  specifically  establish  whether  the  assessment  should  be  creditor-focus 
(i.e.  risk  assessment)  or  borrower-focused  (i.e.  affordability  assessment  done  in  the 
interest of the consumer, as confirmed by the CJEU); 
It does not specify the categories of data that should be considered when conducting 
a creditworthiness assessment.92 This has led to the use of personal data by some data 
controllers  (credit  lenders,  credit  bureaus)  which  may  not  be  necessary  and 
proportionate to the purpose of conducting a creditworthiness assessment. Moreover, a 
majority of Member States established further requirements, establishing the minimum 
information to be taken into account or setting out formulas e.g. debt-to-income.93  
It  does not establish the consequences of a negative creditworthiness assessment, 
for  example  some  Member  States    have  prohibited  the  granting  of  credit  following  a 
negative creditworthiness assessment (e.g. Belgium, the Netherlands). 

89  Impact  Assessment  support  study.  According  to  the  Finance  Watch  study,  only  2%  of  the  clients  in  the 
study received advice on the affordability of the credit, Finance Watch, 2021. 
90 In 2013, the UK’s Office of Fair Trading found that 28% of the loans were rolled over at least once, and 
that  around  half  of  lenders’  revenues  were  linked  to  rollover  practices,  with  19%  of  the  revenues  coming 
from a 5% of loans rolled over four or more times. FSUG, 2019a; ICF, 2020; FinCoNet, 2017. 
91 C‑ 679/18, OPR-Finance s. r. o vs GK, 5 March 2020, ECLI:EU:C:2020:167, paragraph 21, CA Consumer 
Finance, 18 December 2014, C-449/13, EU:C:2014:2464, paragraph 43. 
92 Currently, these aspects are covered by the EBA guidelines on loan origination, which National Competent 
Authorities usually apply to financial institutions. EBA, 2020c. 
93 European Commission, 2018a. 

17 

 
 
 
                                                           
Creditworthiness  assessment  practices  are  still  seen  as  a  problem  area  in  many  Member 
States, with important issues raised by stakeholders in at least 12 of them.94 According to 
the Finance Watch mystery shopping exercise,95 creditworthiness assessments are worse in 
the online than in the offline consumer credit market, and worse amongst non-banks 
than banks. Poor creditworthiness assessment seems to be especially common in certain 
segments of the consumer credit market, in particular for payday loans and loans provided 
via peer-to-peer lending platforms.96 

Furthermore as already discussed, digitalisation has transformed the process of collection 
and  analysis  of  consumer’s  information.  Credit  providers  make  large  use  of  automated 
decision-making  techniques,  including  machine  learning,  for  credit  scoring.97  In 
addition,  lenders  are  making  use  of  different  data  sources  found  throughout  the  digital 
ecosystem.  When  carrying  out  creditworthiness  assessments,  lenders,  through  big  data 
analytics, are increasingly making use of large numbers of data points, most of which are 
either not necessarily provided by the consumer or unknown to the consumer.  This use is 
particularly common among certain non-traditional operators such as peer-to-peer lending 
platforms,98 but this practice is not restricted to new operators.99 The 2020 EBA report on 
big data and advanced analytics100 shows that 34% of business respondents declared using 
or planning to use big data for risk scoring. The use of such technology seem to result in a 
wider access to credit for consumers, but it raises fundamental rights concerns, in terms 
of potential infringements of the right to the protection to personal data, privacy and issues 
concerning direct or indirect discrimination.101 If left unaddressed, the risks associated with 
the use of machine-learning technology are expected to worsen since the use of innovative 
digital tools by credit providers is expected to grow.  

Sub-problem  5:  Certain  consumers  (because  of  individual  circumstances  or  systemic 
economic disruptions) fall easily into over-indebtedness 

Over-indebtedness  refers  to  a  situation  in  which  a  household  is  not  able  to  meet  its 
economic and financial obligations over a sustained period.102 The latest European Union 
Statistics on Income and Living Conditions (2018) shows that on average, more than 30% 
of EU households were unable to meet an unexpected expense, with figures nearing 50% 

94 BE, CZ, EE, IE, LT, LV, NL, PL, PT, SE, SI, SK. Issues with creditworthiness assessment were the main 
source of enforcement decisions in some Member States (IE, PT, CZ). Impact Assessment support study.  
95 Finance Watch, 2021. 
96 ICF, 2020; Cherednychenko, Meindertsma, 2019. 
97 The most common methods used to assess credit applications are regression, decision trees and statistical 
analysis  to  generate  a  credit  score  using  limited  amounts  of  structured  data.  However,  lenders  are 
increasingly turning to new data sources, including social media activity and mobile phone use. EBA, 2020a. 
98 ICF, 2020; EBA, EIOPA, and ESMA, 2016. 
99 ICF, 2020; BEUC, 2017. 
100 EBA, 2020a; Results from the EBA risk assessment questionnaire 2019. 
101  For  example,  in  April  2019,  the  Finnish  Data  Protection  Ombudsman  ordered  financial  credit  company 
Svea Ekonomi to correct its creditworthiness assessment practices, considering that an upper age limit was 
not acceptable as a factor, since age does not describe solvency or willingness to pay.   
102 Including the difficulty to make ends meet, see Annex 7. Eurozone’s households in the age bracket 35-44 
had the highest debt-income ratio (144.6 compared to 78.9 and 54.1 for the age brackets 45-54 and 55-64). 

18 

 
 
 
                                                           
in some countries.103 According to the latest European Quality of Life Survey (2016) 14% 
of people (over 18) reported they were unable to make scheduled payments related to rent 
or  mortgages,  consumer  credit,  loans  from  family  or  friends,  or  utility  or  telephone  bills 
(with differences between Member States). Overall, that proportion rises to 21% for people 
not in arrears but who have trouble making ends meet. Over-indebtedness often arises from 
unexpected changes in individual circumstances, usually as a result of a combination of 
circumstances (e.g. unemployment, personal circumstances such as divorce, illnesses, etc.), 
104 but can also be linked to irresponsible lending and borrowing practices. 2% of total EU 
households,  and  3.9%  of  single  parents  with  dependent  children,  have  arrears  on  loan 
payments.  However,  looking  at  lower  income  households  with  arrears  (bottom 
quartile), 10% of them have arrears on consumer credit.105 

In France, debts linked to consumer credit count for 37% of the total debt of over-indebted 
households.  75%  of  over-indebted  households  have  debt  linked  to  consumer  credit,  and 
62% of them to a revolving credit.106 In Sweden, around 70% of those taking out a credit 
below EUR 195 already had a debt with the company that issued the loan. The majority of 
new small loan borrowers have at least two loans.107 Over-indebted households are often 
also in arrears with consumer credit payments, which can lead to debt spirals.  

Several  tools  are available in Member States to  assist  consumers  at  risk  or already over-
indebted,  including  the  provision  of  independent  debt  advice  services,108  forbearance 
measures,109  or  financial  education  (as  a  preventive  tool).  None  of  those  tools  are 
explicitly included among the Directive’s obligations.  

Systemic economic disruptions such as the COVID-19 related crisis often have a direct 
impact  on  the  financial  stability  of  households,  by  affecting  the  income  at  their  disposal 
and the availability of credit for consumers. For  instance the widespread retrenchment in 
credit  that  followed  the  2008  financial  crisis,  in  combination  with  the  job  losses  and  the 
economic downturn, resulted in increased financial difficulties for European households.110 
At the end of 2020, six in ten consumers had experienced financial problems since the 
start of the pandemic, and around four in ten reported a difficult financial situation.111 

103 For instance, CY, EL, HR, LI, LV, RO. Eurofound, 2020a. 
104 For instance, studies in France and Austria show that unemployment was the basis for over-indebtedness 
in 23% and 43% of cases. Centre for European Policy Studies (CEPS), 2016. 
105 EU SILC survey, 2019. 
106 Banque de France, 2020. 
107 Finansinspektionen, 2019. 
108  Independent  professionals  who  provide  information  and  advice  to  debtors,  not  funded  by  creditors.  9 
Member States have a well-established debt advice service; Eurofound, 2020a. 
109 Forbearance measures are a widely used tool to support over-indebted consumers, especially during crises 
(BBVA Research, 2017). They can take different forms and be implemented over different timescales. 
110 EQLS surveys from 2007 and 2011. 
111 
for 
https://ec.europa.eu/info/sites/info/files/future_financial_concerns_-_country_distribution_0.pdf . 

Parliament,  November 

by  Kantar 

conducted 

European 

Survey 

2020. 

the 

19 

 
 
 
                                                           
However,  this  crisis  is  not  affecting  all  population  groups  equally.  Vulnerable  groups 
have less savings,112 were often already in a precarious situation before the crisis, and may 
be the most in need to obtain credit to cover their regular expenses, pushing them to obtain 
higher  cost  and  potentially  detrimental  credit  because  they  do  not  have  access  to 
alternative,  less  expensive,  products.113  When  asked  about  the  impact  of  the  COVID-19 
crisis,  up to  5% of consumers surveyed in  7 EU countries in  June 2020  said  they  had to 
raise the limit on their credit card, up to 14% had to borrow money from family or friends 
to make ends meet, and up to 15% had to postpone paying at least one bill. Among low-
income consumers surveyed, up to 23% had to postpone bill payments, and up to 20% had 
to borrow from family and friends.114 Those who are unemployed or working part-time are 
most likely to say that COVID-19 has already impacted on their personal income.  

Amid  the COVID-19 crisis,  Member States have adopted a series of relief measures that 
seek to alleviate the financial burden of citizens and households, such as loan repayment 
moratoria that were generally extended to consumer credit, next to other credit forms.115 
Most of them have introduced deferrals of loan repayments, but for different periods and 
with different conditions, as regards for instance eligibility or responsibility for extra costs. 
Some of these measures had an effect  on  consumer protection, while  the Directive does 
not  address  the  impact  of  systemic  economic  disruptions  on  consumers.  While 
Member  States  initiatives  proved  to  be  beneficial,116  the  divergence  between  national 
measures taken on consumer credit to alleviate the consequences of such disruption should 
not lead to an uneven consumer protection level.  

The majority of respondents to the New Consumer Agenda public consultation believe 
that  EU-level  action  is  needed  to  safeguard  the  interests  of  lenders  and  borrowers  in 
exceptional and systemic economic disruptions.117 

Problem 2: the competitiveness of the internal market is not fully achieved  

One  of  the  key  objectives  of  the  Directive  is  to  facilitate  the  emergence  of  a  well-
functioning  internal  market,  through  a  higher  degree  of  legal  harmonisation  across  the 
EU on certain  key  elements  of consumer credit (Recital  7). Further harmonisation would 
level  the  playing  field  for  credit  providers  regardless  of  where  they  are  located  and 
facilitate the provision of credit to consumers in other Member States both directly cross- 
border or via establishment of subsidiaries, allowing them to broaden the number of 
their customers, and potentially benefit from economies of scale. From the perspective 
of consumers, effective competition in the internal market would increase their choices 
and  enable  them  to  shop  around  for  the  offer  that  best  suits  them.  Higher 

112  A  recent  study  published  by  the  Joint  Research  Centre  found  that  in  all  Member  States,  a  majority  of 
households have only liquid savings worth EUR 1 000 or less. In some countries (CY, HR, HU, SI, but also 
IT, LV, PL, SK), the proportion of households with no savings or indebted is particularly high.  
113 Social Europe, 2010. 
114 IPSOS, Covid-19: attitudes and behaviours in the EU, 2020 – confidential. 
115 See Annex 8: Mapping of national measures to support borrowers amid the COVID-19 crisis. 
116 EBA, 2020b. 
117 61% of companies, 56% of business associations, 100% of consumer organisations, 98% of citizens, 95% 
of NGOs and 83% of national authorities (multiple choice question). Only for 18% no EU action is needed.  

20 

 
 
 
                                                           
harmonisation  should  also  decrease  national  market  segmentation,  allowing  better 
competition  among  the  different  players  and  lower  interest  rates,  especially  on  smaller 
national markets which are very concentrated, with the top five main financial institutions 
representing up to 97% of assets at national level (65% on average in the EU).118  

More harmonisation and legal clarity should facilitate more financial institutions to provide 
credit across borders, and this would clearly be beneficial to competition.  

Despite  a  high  level  of  harmonisation  of  the  prudential  framework  under  which  banks 
operate  and  the  creation  of  the  Banking  Union  in  the  Euro  Area,  the  consumer  credit 
market  has  remained  highly  fragmented.  Direct  cross-border  activities  in  consumer 
credit, by  a legal  entity  established in  another Member State,  remain low. ECB data on 
outstanding positions of cross-border loans to households provided by monetary financial 
institutions show that these represented less than 1% of total household loans for the period 
2008-2019  (0.8-0.9%)  and  has  not  evolved.119  In  2015  fewer  than  3%  of  European 
consumers purchased banking products such as credit cards in another Member State, and 
5% purchased their loans from abroad.120 The Directive’s Evaluation confirmed that direct 
cross-border operations represent 5% or less of credit agreements concluded by the credit 
providers  consulted.121 This is due to external factor  influencing offer and demand, but 
also  to  different  consumer  protection  rules,  linked  also  to  the  way  the  Directive  has 
been implemented at national level (regulatory choices, vagueness of some provisions). 
This increases the burden associated to the consumer credit distribution across borders but 
also  reduces  incentives  for  smaller  operators  to  establish  cross-border.  Moreover,  the 
Directive’s  provisions  cover  only  some  areas  related  to  the  protection  of  borrowers  (for 
instance they do not harmonise insolvency procedures).  

It  is  to  be  expected  that  the  increasing  role  of  fintech  companies  as  providers  of 
consumer credit will have an impact on the level of cross-border operations. Contrary 
to  traditional  providers  of  credit,  these  companies  tend  to  target  consumers  in  various 
Member States.122 Their market share is currently small, but in the future their contribution 
to the development of a cross-border market could be potentially significant. As the digital 
transition  makes  cross-border  credit  operations  easier,  we  can  already  observe  an 
increasing  trend  of  such  operations.  For  instance,  the  Latvian  peer-to-peer  consumer 
lending  platform  Mintos  is  operating  in  several  EU  countries  (e.g.  Denmark,  Poland, 
Czech Republic). Similarly, the Estonian platform Bondora allows users to invest in loans 
granted through the Bondora Group to borrowers in Estonia, Finland and Spain. 

Moreover,  a  fast  and  radical  change  could  occur,  if  major  actors  of  the  digital 
economy, such as BigTech companies, start operating in the area of consumer credit. 

118  https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr200608~4613968937.en.html,  consulted  on  21 
February 2021.  
119 See Annex 6 Market developments – Impact of digitalisation. 
120 European Commission, Key facts on Consumer Finance. 
121 ICF, 2020. 
122 As confirmed, there is an increasing amount of cross-border activities across the EU as regards peer-to-
peer consumer lending (Cambridge Centre for Alternative Finance, 2020). 

21 

 
 
 
                                                           
This  development  can  be  observed  already  today  outside  the  EU.  In  China,  the  major  e-
commerce platform Alibaba has widened its portfolio and started offering consumer credit 
directly  on  its  website  to  consumers  buying  products  there.  In  the  US,  Amazon  Lending 
offers  revolving  credit  for  small  and  medium  sellers  in  the  Amazon  e-commerce 
platform.123  This  trend  has  not  yet  reached  the  EU,  even  though  BigTechs  are  already 
partnering up with traditional providers to offer financing options.124  

This  possible  tendency  is  recognised  by  the  Commission  in  the  2020  Digital  Financial 
Strategy, which says that risks stemming from potential large-scale lending operations by 
firms outside the banking perimeter should be addressed. 

Sub-problem 1: Barriers for credit providers to business expansion across borders 

Different regulatory approaches on a number of key Directive’s articles125 have resulted 
in different obligations for credit providers depending on the Member State in which they 
operate. Moreover, it is plausible to assert that legal fragmentation due to the differences in 
scope  of  application  in  the  different  Member  States  and  different  implementation  of  key 
terms  of  the  Directive  (e.g.  ‘sufficient  information’  in  Art.  8  on  creditworthiness 
assessment)  hindered  the  development  of  cross-border  lending;  legal  fragmentation  can 
often discourage  credit providers from serving  consumers in  other Member States, either 
directly  or  via  establishment  trade.  In  fact,  credit  providers’  lack  of  knowledge  and/or 
confidence  in  other  Member  States’  regulatory  framework  is  singled  out  as  a  significant 
barrier hindering expansion across borders by the business sector.126  

The issues of enforcement and penalties are another source that leads to high complexity 
and  lack  of  confidence  in  the  regulatory  framework.  The  choice  of  sanctions  (effective, 
proportionate and dissuasive) remains at  the discretion of Member States (Art. 23). With 
regard  to  penalties,  Member  States  have  generally  established  civil  and  administrative 
sanctions  for  infringements  of  the  national  provisions  transposing  the  Directive;  in 
addition, some can issue criminal sanctions. As a result, there is considerable disparity in 
the types and levels127 of sanctions. With regard to the responsible enforcement authorities, 
to  ensure  correct 
a 
implementation  of  the  different  aspects  of  the  Directive.  Sometimes,  the  competent 
authority depends on the type of the credit provider, namely whether it is a bank or a non-
bank  lender.128  Having  multiple  competent  authorities  with  varying  sanctioning  powers 

large  number  of  Member  States  appointed  several  bodies 

through  Amazon.de. 

123 Using Amazon’s own capital or bank partners’ funding. Oliver Wyman, Big banks, bigger techs? 2020. 
124  In  2020,  Barclaycard  Germany  announced  a  partnership  with  Amazon  to  offer  financing  for  purchases 
made 
https://home.barclaycard/press-releases/2020/11/Amazon-partners-with-
Barclaycard-Germany/ consulted on 23 February 2020. 
125 Art. 2 on scope, Art. 4 on advertising, Art. 16 on early repayment. European Commission, 2020, Report 
on the implementation of Directive 2008/48/EC on credit agreements for consumers, COM(2020) 963 final. 
126 ICF, Impact assessment support study, business organisations survey. 
127 The range of monetary fines for both natural and legal persons is very broad, ranging from EUR 26 (BE) 
to EUR 5  million (NL, SE). In some Member States, fines imposed on creditors are linked to their annual 
turnover (up to 5% of the creditor’s annual income in CY, HU and LT, 10% in IT). 
128  For  instance,  the  creditworthiness  assessment  requirements  are  generally  enforced  by  the  consumer 
authority (in BE, EE, EL, FR, IS, LV, PL; for non-bank lenders in DK, SE, SI and regional ES authorities), 

22 

 
 
 
                                                           
 
and  competent  authorities  depending  on  the  type  of  operator  has  had  an  impact  on  the 
level-playing field between different providers and the consistency of enforcement. 

Furthermore  the  Consumer  Protection  Cooperation  Regulation  (N°2017/2394)  which  is 
supposed  to  cover  cross  border  infringement  to  the  consumer  legislation  included  in  its 
annex (including the Consumer Credit Directive), could not be of much assistance in view 
of the important variations in national implementation of the Directive.   

Another aspect  to  be considered is  access  to credit  databases across  borders. Art.  9 of 
the Directive establishes the obligation on the Member States to ensure access for creditors 
from  other  Member  States  to  databases  used  in  that  Member  State  for  assessing  the 
creditworthiness of consumers. While the Directive has set up this obligation, it is silent on 
who  is  to  run  the  database  (publicly  run  and/or  co-exist  alongside  privately  run  ones)  or 
what categories of data are to be processed. The result is that the content of such database 
varies  between  countries  and  can  include  only  negative  data  (e.g.  missed  payments)  or, 
both  positive  (e.g.  ongoing  financial  commitments)  and  negative  data,  coming  from 
various  sources  and  updated  according  to  different  timescales  depending  on  the 
database.129  An  additional  hurdle  to  the  establishment  of  a  well-functioning  cross-border 
database  access,  is  the  reciprocity  principle.  Many  credit  registers  operate  on  the 
reciprocity principle, implying that credit providers are to supply the same type of data that 
they wish to access through the credit database.130  

However,  there  are  external  factors  relating  to  aspects  going  beyond  the  Directive 
elements  hampering  the  cross-border  offer  of  credit.  These  include  legal  and  technical 
barriers  (know-your-customer  requirements  as  per  anti-money  laundering  requirements, 
difficulty in checking the identity of consumers, insolvency regimes, contract law relating 
to the validity of credit agreements) leading to regulatory and market fragmentation, post 
contractual  issues  not  covered  by  the  Directive,  language  barriers  and  questions  around 
applicable law.131 Some entities may not qualify to obtain existing EU passports and have 
to ask authorisation in each Member State where they want to offer credit. 

Sub-problem 2: Difficulties for consumers to access cross-border credit 

The Directive’s Evaluation has shown that there is a growing interest among consumers for 
cross-border credit offers. Around one third (29%) of the respondents to the consumer 
survey conducted for the Evaluation said they had looked for a credit from a creditor 
located  in  another  EU  country.  This  compares  to  only  2%  respondents  to  a  2011 
Eurobarometer who said that they would potentially buy a personal loan in a foreign EU 
country.132  This  is  a  marked  increase  in  comparison  to  the  past  and  demonstrates  that 

the  financial  supervisory  authority  (in  EE,  FR,  NL,  PL,  UK;  for  bank  lenders  in  DK,  SE)  or  the  national 
central bank (in CY, CZ, ES, HU, IE, IT, LT, PT, RO, SK; for bank lenders in ES, SI). 
129  European  Commission,  2018a.  The  data  points  present  in  almost  all  credit  registers  are:  mortgages, 
personal loans and credit and store card. Beyond this, they include information on: credit lines on a current 
account, leasing, point of sale credit, payday loans, energy and water bills, etc. ACCIS, Facts and Figures. 
130 ICF, 2020; European Commission, 2009. 
131 See European Commission, 2020. 
132 Please note that there could be some limitations in the comparison between 2019 and 2011 data, due to 
difference in the size of the sample and in the methodology between the consumer survey performed for 

23 

 
 
 
                                                                                                                                                                                
 
consumers  are  showing  a  growing  interest  to  take  credits  in  other  Member  States. 
However, as mentioned above, very few of them actually go so far as concluding one.  

There are  several  external  obstacles and factors that deter  consumers  from  obtaining  a 
credit from a provider established in another Member State:133 

  Geographical  restrictions,  imposed  by  providers  to  limit  access  only  to  domestic 
consumers,  to  avoid  additional  administrative  burden  related  to  creditworthiness 
assessment  in  another  economic  environment  and  credit  management,  especially  in 
case  of  default.  They  include  requiring  to  provide  an  ID  number,  address,  telephone 
number or tax declaration from the country where the creditor is based as pre-requisite 
for the transaction to be accepted, and are often based on geo-blocking techniques.134  
  General  consumer  preferences,  like  finding  the  offer  in  the  national  market 

sufficient, and preferences for obtaining a credit locally. 

  Low  trust  due  to  the  lack  of  knowledge  among  consumers  of  available  redress 

mechanisms and of applicable legislation in case of cross-border purchase. 

  Lack  of  awareness,  since  credit  providers  rarely  target  consumers  in  other  Member 
States, many consumers are not aware of the possibility to access credit cross-border. 

  Language and cultural barriers.  

However, differences in the protection guaranteed by the Directive in different Member 
States could also play a role in hampering cross-border access.  

Moreover,  it  is  important  to  stress  the  Directive  does  not  include  a  specific  provision  on 
preventing  discrimination  on  the  basis  of  “nationality  or  place  of  residence  or  by 
reason  of  any  other  ground  as  referred  to  in  Article  21  of  the  Charter”,  contrary  to  the 
Payment Account Directive (Art. 15). 

Digitalisation and the change in consumer preferences are expected to lead to an increase 
in cross-border operations. New digital actors such as fintechs generally target consumers 
in  various  Member  States  more  than  traditional  operators.  This  strengthen  the  need  to 
ensure a high and consistent level of consumer protection among Member States. 

Sub-problem  3:  Information  requirements  for  advertisement  on  certain  channels  create 
unnecessary burden for businesses  

The  Directive  was  evaluated  following  a  2017  REFIT  Platform  Opinion  focusing  on  the 
perceived burden caused by standard information that has to be provided when advertising 
consumer  credit  agreements  in  particular  on  radio.  In  the  Opinion,  radio  industry 
stakeholders flagged that current information requirements at advertising stage entail 
substantial continuous costs for advertisers, which have to pay for additional airtime, and 

the  Evaluation  (based  on  3886  responses  from  the  EU-28)  and  the  Special  Eurobarometer  373.  Also,  the 
survey questions were asked to consumers who had entered into a credit agreement in the past three years. 
133 This was confirmed by the Evaluation mystery shopping exercise and by stakeholder feedback. 
134  Geo-blocking  techniques  are  used  online  by  credit  providers  to  re-route  consumers  or  prevent  the 
conclusion of a transaction, effectively denying access to credit for cross-border consumers. Although a new 
Regulation on geo-blocking was adopted in 2018 (Regulation (EU) 2018/302), financial services have been 
specifically excluded from its material scope for the time being. 

24 

 
 
 
                                                                                                                                                                                
in  turn  create  losses  for  them  because  companies  choose  to  advertise  on  other  media 
channels.135 

On  the  other  hand,  those  requirements  have  seem  to  have  a  sub-optimal  effects  in  their 
main objective of informing consumers. Research carried out by the association of radios 
in France and in the UK shows that only 3-4% of radio listeners recall the total amount 
payable immediately after hearing a radio advertisement with a consumer credit offer.136 

This issue was confirmed by most business representatives consulted during the Evaluation 
(which however could not clearly ascertain whether the Directive could be simplified137), 
and  also  more  recently  for  the  Impact  Assessment.  Business  associations  and  credit 
providers  stressed  that  the  reduction  of  the  amount  of  required  information  in 
advertisement  and  marketing  would  have  a  positive  impact  on  the  industry.  They  also 
indicated that information requirements are among the main issues they face because 
they are burdensome and not necessarily fit for purpose.  

Reducing  the  information  provided  at  advertising  stage  on  certain  channels  and 
streamlining  information  displayed  to  consumers  at  advertising  and  pre-contractual  stage 
could reduce burden for businesses while helping consumers to better understand the main 
elements of the credit. The Unfair Commercial Practices Directive already recognises that 
the limitations of the communication medium have to be taken into account when defining 
whether a commercial practice has to be regarded as misleading (Art. 7). 

2.3 What are the consequences of the problems? 

The problems identified lead to a variety of consequences for different stakeholders. 

  Consumers  are  harmed  when  they  take  a  credit  not  corresponding  to  their  needs, 
financial situation and repayment possibilities. The detriment concerns higher interest 
rates paid, or interest rates paid when they should not have been granted the credit (but 
the  assessment  of  their  creditworthiness  was  not  performed  thoroughly)  and  the 
possible unexpected degradation of their debt situation. In addition a worsening of their 
situation  can  have  a  lot  of  moral  damage  on  the  consumers  and  on  their  facilities. 
Because  of  ineffective  information  provision  and  processing  (due  to  information 
overload), and practices nudging them, consumers end up making sub-optimal choices, 
which  lead  to  additional  costs  incurred  and  lower  level  of  trust.138  The  lack  of 
provisions  to  assist  consumers  when  necessary,  enhance  their  financial  literacy  or 
address  the  impact  on  consumers  of  systemic  economic  disruptions,  can  lead  to  an 
increase in over-indebtedness. Insufficient harmonisation between Member States, also 
reduces the competition and increases the concentration of markets which leads to price 

135 The business association Radiocentre estimated that the annual lost revenues to radios in the UK due to 
the  complexity  of  credit  advertisement  information  requirements  in  terms  of  reduced  investment  from 
advertisers amounts to around EUR 19 million. 
136 Radiocentre, 2016. SIRTI et al., 2016. 
137  According  to  Better  Regulation  principles,  opportunities  to  reduce  regulatory  costs  and  to  simplify  the 
existing legislation should not affect negatively the achievement of the underlying policy goals. 
138  Consumer 
trust 
https://ourworldindata.org/trust-and-gdp 

correlated  with  GDP 

capita.  See: 

positively 

seems 

per 

be 

to 

25 

 
 
 
                                                           
increase  and  lower  choices  for  consumers.  Vulnerable  consumers,  such  as  low-
income  or  over-indebted  consumers,  are  particularly  affected  by  the  identified 
problems. 

  Businesses can  easily exploit  the gaps in  the system  to  develop  irresponsible lending 
practices.  With  competition  being  strong  on  certain  less  regulated  segments  of  the 
market,  there  is  an  incentive  for  the  less  responsible  lenders  to  set  (bad)  market 
standards. Different sets of rules for different kinds of credits and unclear obligations 
also prevent both the expansion of direct cross border lending and establishment trade 
by smaller credit institutions,  and lead to  an unlevel  playing  field.  Moreover, unclear 
obligations  and  information  related  obligations  that  do  not  benefit  consumers  create 
unnecessary  burden  for  businesses.  Uncompliant  providers  or  providers  offering 
products  not  in  the  scope  have  a  competitive  advantage  because  they  do  not  bear 
compliance costs than other operators do bear. 

  The  burden  on  national  authorities  enforcing  the  Directive  increases  as  a  result  of 
consumers  being  exposed  to  irresponsible  practices  that  lead  to  more  consumer 
difficulties that in turn lead to more complaints to be processed. EU public authorities 
face  many  requests  for  preliminary  rulings  submitted  to  the  CJEU,  because  of  the 
vagueness  of  the  Directive,  an  increased  number  of  consumer  and  stakeholders’ 
complaints and need to provide more assistance to enforcers. 

  Consequences  for  society  are  the  negative  externalities  of  increased  level  of  over-

indebtedness, risks for social inclusion, but also risks for financial stability. 

2.4 How will the problem evolve? 

In case of no EU intervention (baseline scenario), the current market trends can be used as 
benchmark. 

Even  though  the  consumer  credit  market  is  at  the  moment  still  led  by  traditional 
operators139,  digitalisation  is  already  changing  its  landscape  considerably.  Fintech 
companies  have  expanded  significantly  in  the  last  decade  and  are  expected  to  develop 
further  in  the  future.140  In  2018,  the  total  value  of  the  peer-to-peer  consumer  lending 
market  in  Europe remained limited (around EUR 2.4 billion), but  grew  by 89%  year-on-
year from 2017.141 Looking at  global developments, peer-to-peer lending to consumers is 
expected  to  grow,142  however  the  impact  of  the  COVID-19  crisis  both  on  creditors  and 
consumers is unclear.143 Since peer-to-peer consumer lending is  excluded from the scope 
of  the  recently  adopted  EU  Crowdfunding  Regulation  ((EU)  2020/1503)  and  it  is  not 
explicitly  under  the  Directive  scope,  this  development  could  increase  the  presence  of 
unregulated risky products. Big Techs such as Google, Facebook, Alibaba or Amazon, who 

139 ICF, 2020; LE et al., 2019, 
140  In  2019  the  value  of  fintech  transactions  –  of  which  credit  still  represents  only  a  minor  share    -  was 
estimated to EUR 682 billion, with a forecasted growth rate of 13.3% by 2022. ICF, 2020; LE et al., 2019.    
141 USD 2.9 billion. Cambridge Centre for Alternative Finance, 2020; Jørgensen, 2018. 
142 Alternative finance activities declined in China, but in the rest of the World saw growth. 
143 Because of the crisis, banks might tighten their lending standards and consumers could turn to alternative 
forms of credit. However, peer-to-peer lending platforms might tighten their lending standards, too. 

26 

 
 
 
                                                           
are already offering their own version of mobile wallets, as well as  loans and credit lines 
through store cards in third countries, might enter the EU consumer lending market too.144  

Growing  use  of  digital  tools  would  also  exacerbate  the  problem  of  limited  consumer 
awareness  of  the  key  elements  and  costs  of  the  credit  product  they  obtain,  because  the 
Directive information requirements are not adapted to digital tools. Online practices from 
credit providers nudging consumers into making unsuitable choices, not  regulated by the 
Directive  at  present,  would  be  likely  to  continue  and  grow.  The  use  of  automated 
decision-making , including machine learning, for credit scoring is expected to increase 
too, as well as the use of alternative categories of data (such as social media data), since 
digitalisation makes the process of collecting and analysing consumer’s information faster 
and  easier.  This  raises  questions  as  to  what  data  will  be  used  in  the  future  for  assessing 
consumers’  creditworthiness  and  highlights  the  risks  of  discrimination  from  decisions 
based  on  algorithms.145  Moreover,  this  could  worsen  the  problem  of  credits  granted 
without thorough assessment of the consumer creditworthiness. 

Another  aspect  to  be  taken  into  account  for  the  future  market  developments  is  the 
medium-  to  long-term  societal  and  economic  impact  of  COVID-19,  which  will  take 
time to emerge. In the course of 2020, EU economies were supported by an unprecedented 
level  of  economic  support  packages.146  When  this  support  phases  out,  the  wider  cost  of 
COVID-19  will  appear.  Consumers  are  concerned  about  the  worsening  of  their  financial 
situation.  Initial  data  shows  that  low-paid  workers  have  been  particularly  affected  by  the 
crisis.147 There were 6.1 million fewer people in employment in Q2 2020 than in Q4 2019, 
with  temporary  employees  affected  the  hardest.148  Challenges  in  repaying  the  credit  or 
accessing  new  credit,  may  appear  in  this  subset  of  consumer’s  segment  first.149  This  is 
expected to aggravate the problem of consumers falling into over-indebtedness.   

As regards the impact of COVID-19 on the consumer credit market specifically, banks 
expect  a  continued  net  tightening  of  credit  standards.150  The  weaker  the  contraction  in 
output  and  faster  and  more  robust  the  recovery  is,  the  more  contained  the  impact  of 
COVID-19  would  be  (‘V-shaped  recovery’).  Conversely,  deep  recession  and  prolonged 
recovery  spread  over  longer  period  of  time  (‘L-shape  recovery’)  would  be  more 
detrimental  for  consumer  credit  markets.  The  data  from  the  2008  crisis  shows  that 
originations were noticeably lower soon after the crisis and recovered only in recent years 
to  2008-levels.  However,  many  consumers  in  financial  difficulties  due  to  the  crisis  are 

144 See Annex 6 Market developments – Impact of digitalisation. 
145 The Commission White Paper on Artificial Intelligence (Feb. 2020) mentions algorithms’ opacity issues.  
146  In  the  five  largest  economies  of  the  EU,  one  in  five  employees  has  been  on  public  temporary 
unemployment schemes for which the state pays some share of the wages. The Economist, 2020. 
147 IPSOS, Covid-19: attitudes and behaviours in the EU, 2020 – confidential. 
148 Eurostat, Labour Force Survey. 
149 Finance Watch 2020a, Basic Financial Services.   
150 ECB, June 2020, Q2 Bank Lending Survey.  

27 

 
 
 
                                                           
expected  to  seek  consumer  credit,  and  irresponsible  lending  practices  from  certain  credit 
providers in the COVID-19 context can put them at risk.151 

Insufficient harmonisation between legislative frameworks of the Member States leading to 
unlevel playing field would continue to create barriers for credit providers to business 
expansion across borders and difficulties for consumers to access cross-border credit 
offers. The  negative  effect  of  concentration  of  national  markets  will  continue  to 
negatively affect competition conditions and in particular interest rates levels.  

Finally,  green  loans  for  energy  efficient  renovation  of  houses  are  expected  to  rise, 
especially  in  some  Member  States,  as  well  as  available  public  funding  directed  towards 
green investment in the coming years.152 

151 UFC-Que Choisir, 2020, Consumer credit and COVID-19 UFC-Que Choisir alerts against a sharp rise in 
soured loans. 
152 See Annex 6 Market developments – Evolution of the consumer credit market over the recent years. 

28 

 
 
 
 
 
                                                           
2.5 Intervention logic 

The  problems  presented  above  have  key  regulatory  drivers  leading  to  the  problems  and  their  effects  on  consumers,  credit  providers,  public 
authorities and the society. Those are presented in the problem tree (Section 2). An objective tree is also included in Section 4. The intervention 
logic diagram, links the policy options with the objectives and the identified problems. 

Table 1 Intervention logic diagram 

29 

 
 
 
3.  WHY SHOULD THE EU ACT?  

3.1 Legal basis 

The  Treaty  on  the  Functioning  of  the  European  Union  (TFEU)  confers  upon  the  EU 
institutions  the  competence  to  lay  down  appropriate  provisions  that  have  as  their  object  the 
establishment and functioning of the internal market (Article 114 TFEU).  

Article 169 TFEU, related to consumer protection, also states that to promote the interests 
of  consumers  and  ensure  a  high  level  of  consumer  protection,  the  Union  shall  contribute  to 
protecting  the  health,  safety  and  economic  interests  of  consumers,  as  well  as  to  promoting 
their  right  to  information,  education  and  to  organise  themselves  in  order  to  safeguard  their 
interests.  Article  169(2)  TFEU  specifies  that  these  objectives  can  be  reached  through 
measures adopted pursuant to Article 114 in the context of internal market completion. 
Thus,  a  thorough  examination  of  the  possible  legal  basis  was  conducted  and  the  one 
concerning consumer protection (Article 169 TFEU) points towards Article 114 TFEU. 

This  is  in  fact  the  approach  adopted  in  this  initiative.  The  objectives  set  out  in  Article  169 
TFEU  are  attained  through  Article  114  TFEU,  which  serves  as  the  legal  basis  for  this 
Proposal,  thus  following  the  same  approach  as  Directive  2008/48/EC.  Article  114  TFEU 
remains  the  most  appropriate  legal  basis  also  in  light  of  the  objective  and  necessity  to 
strengthen  the  cross-border  element.  In  fact,  as  digitalisation  makes  cross-border  credit 
operations easier and the possible entry into the credit market of BigTechs companies in the 
EU  market  becomes  a  reality,  the  cross-border  element  is  expected  to  increase.  Thus, 
anchoring  the  revision  of  the  Directive  on  Article  114  TFEU  will  ensure  the  continuity  of 
ensuring  a  high  level  of  consumer  protection  and  at  the  same  time  allowing  for  the 
strengthening of the cross-border element. 

3.2 Subsidiarity: Necessity of EU action 

The revision of the Directive aims to modernise the current regulatory framework and fix the 
areas  that  the  Evaluation  has  flagged  as  inefficient.  The  two  overarching  objectives  of  the 
current Directive, namely to ensure that all consumers in the EU enjoy a high and equivalent 
level of protection and to create a genuine internal market, remain relevant.  

So  as  to  remedy  this  partial  achievement  of  two  overarching  objectives  of  the  Directive, 
legislative  amendments  to  the  current  framework  at  EU  level  are  required  to  attain  further 
harmonisation which could lead to a higher and more uniform level of consumer protection, 
whilst  facilitating the development  of cross-border activities. These legislative amendments, 
including  improving  certain  definitions,  such  as  ‘creditor’  and/or  ‘credit  intermediary’  laid 
down in Article 3, widening the provision concerning the scope of the Directive and ensuring 
that  key  articles,  such  as  on  creditworthiness  assessment,  will  be  drafted  in  a  clear  and 
unambiguous  manner.  Thus  amending  current  provisions  of  Directive  2008/48/EC  by 
ensuring  added  clarity  and  legal  certainty,  the  objectives  laid  down  in  the  Directive  will  be 
rendered more effective.  

EU action is also needed to introduce new provisions to cater for situations not envisaged in 
2008.  Provisions,  rather  than  a  recital,  on  responsible  lending  and  provisions  on  ways  to 
30 

 
 
 
 
combat  exploitative  behaviour  will  ensure  that  the  Directive  keeps  ensuring  a  high  level  of 
consumer protection whilst improving EU cross-border uptake of credit agreements. 

While the figures concerning the conclusion of cross-border credit agreements has remained 
constantly  low,  the  aim  of  the  revision  of  the  Directive  is  to  propose  a  forward-looking 
legislation which facilitates its two principal objectives. What is more, it is important to stress 
that  most  Member  States  have  enhanced  the  level  of  consumer  protection  by  adopting 
measures  that  go  beyond  the  Directive’s  current  requirements.  This  indicates  that  more 
efficient  EU  action  is  ever  more  important  and  necessary  to  intervene,  where  national 
legislation  cannot  sufficiently  protect  consumers.  The  dynamic  market  developments  of 
recent years, especially in the light of digitalisation, show an increasing or likely to increase 
number and type of cross-border providers of consumer credit. As explained earlier, with new 
market players (e.g. peer-to-peer lenders) and possible market developments (BigTechs’ entry 
in the consumer lending market), the figures concerning the conclusion of cross-border credit 
agreement  are  expected  to  increase.  Since  digitalisation  crosses  across  the  different 
Member  States  and  in  an  effort  to  ensure  a  revised  Directive  that  is  dynamic,  EU  action 
becomes necessary. 

3.3 Subsidiarity: Added value of EU action 

Directive 2008/48/EC is a full harmonisation instrument in the areas it covers; thus, Member 
States could not maintain or introduce national provisions other than those laid down in the 
Directive in said areas. However, where no such harmonised provisions exist, Member States 
are free to maintain or introduce national legislation. 

With  regard  to  scope,  all  Member  States,  except  Greece  and  Cyprus,  have  adopted 
transposing measure that extend the scope of the Directive in this sense. Indeed, 15 Member 
States153    removed  the  minimum  and/or  the  maximum  threshold  (fully  or  partially)  when 
transposing the Directive in their national legislation. Similarly, most Member States (15)154  
extended the scope of application of the Directive (or certain of its provisions) to consumer 
credit  not  covered  by  the  Directive,  so  as  to  include  leasing  agreement  and/or  overdraft 
facilities, revolving credit, mortgages, zero-interest rate and pawnshop agreements. However, 
in  respecting  the  principle  of  subsidiarity,  the  proposal  does  not  extend  the  scope  of  the 
Directive in instances when either cross-border potential is low (e.g. pawnshops) or when no 
comprehensive data and  evidence of major  consumers issues  have been detected (e.g. loans 
above EUR 75 000). Thus, the principle of subsidiarity points to the option of not including 
pawnshops and loans above EUR 75 000 in the scope – it has not been obvious that EU action 
would have an added value in that regard, nor has it been proved that such extension would be 
beneficial for consumers. 

Regarding  creditworthiness  assessment,  most  Member  State  (15)155  have  already  laid  down 
further provisions about the creditworthiness assessment, defining how the assessment is to be 

153 BE, BG, CZ, DE, DK, EE, ES, FI, FR, HU, IT, LV, PT, RO, SK.  
154 AT, BE, BG, CZ, EE, FI, FR, HR, HU, IT, NL, PT, RO, SI, SK. 
155 BE, CZ, DK, ES, FI, HU, IT, LV, LT, NL, PL, RO, SI, SK, SE. 

31 

 
 
 
 
                                                           
conducted and imposing other obligations on creditors. These two examples (on the issues of 
scope  and  on  the  creditworthiness  assessment)  show  that  most  Member  States  have  felt  the 
need  to  go  beyond  the  current  regulatory  framework  provided  by  the  Directive  in  order  to 
enhance the level of consumer protection. However, in so doing, their actions have impacted 
the objective of ensuring a level playing field for creditors, also leading to different levels of 
protection  for  consumers.  Therefore,  action  by  Member  States  alone  will  not  solve  the 
problems identified above, particularly as regards scope and creditworthiness assessment. In 
addition,  widening  the  scope  by  removing  thresholds  and  improving  the  article  regulating 
creditworthiness  assessment  will  increase  effectiveness  in  attaining  the  objective  of 
facilitating  cross-border  provision  of  credit  agreements,  as  a  harmonised  approach  will 
improve the credit providers’ knowledge of the regulatory system in other Member States. 

In light of the situation as developed over the past 12 years, improving the current regulatory 
framework  can  only  be  achieved  at  EU  level,  as  different  Member  States  took  different 
approaches  (e.g.  when  regulating  creditworthiness  assessment,  extending  the  scope  of 
application of the Directive in differing ways and for different consumer credit products). The 
EU  added  value  of  doing  so  would  be  to  bring  a  clearer  legislative  framework  that  ensures 
legal certainty, achieved through more harmonization.  

Regulatory  fragmentation  among  Member  States  was  highlighted  as  a  key  issue  by  all 
stakeholder groups. Stakeholders tend to agree that the fragmentation negatively impacts both 
consumers  and  the  development  of  a  cross-border  credit  market.  Consumer  organisations 
mainly  raised  the  need  to  adopt  more  prescriptive  measures,  which  was  echoed  by  national 
authorities, to protect consumers against over-indebtedness. 

The recent COVID-19 pandemic has also illustrated that while Member States might be better 
placed  to  take  specific  measures  in  the  area  of  consumer  credit  agreements,  it  is  of 
fundamental  importance  not  to  lower  the  consumer’s  level  of  protection.  To  cater  for  any 
possible  situation  leading  to    exceptional  or  systematic  economic  disruptions,  the  revised 
Directive is an opportunity to clarify and ensure that the rights provided to consumers (such as 
the  right  to  information)  are  not  lost  or  mitigated,  even  in  exceptional  circumstances  which 
the  EU  might  have  to  face.  Such  goal  of  ensuring  that  all  citizens  across  the  EU  enjoy  the 
rights provided by the Directive, even in case of national measures responding to a pandemic, 
cannot be achieved solely by Member State action. 

Further to the above reasons why Member States alone would not achieve the objectives, is 
the impact of digitalisation. The use of digital tools is not limited to a single Member State. 
Rules fit for the digital age are needed to foster cross-border activity and competition. Hence, 
action on provisions of the Directive that are digitally relevant, such as improving how pre-
contractual  information  is  displayed  online,  can  be  achieved  better  at  EU  level:    unilateral 
actions from Member States on this cannot deliver the same fruits as EU action. 

4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? 

Table 2 Objective tree 

General objectives 

Specific objectives 

32 

 
 
 
 
Reduce the detriment of 
consumers taking out loans in 
a changing market 

Facilitate cross-border 
provision of consumer credit 
and the competitiveness of the 
internal market 

4.1 General objectives 

1) Reduce the detriment arising from unregulated credit products (problem 1.1) 
2) Ensure consumers taking out a credit are empowered by effective and timely 
information on the risks, costs and impact of credit on their finances, also via 
digital means  (problem 1.2)  
3) Ensure that credit granting is based on thorough assessment (both from credit 
providers and consumers) of the consumer best interest (problem 1.3, 1.4) 
4) Prevent that specific individual or systemic situations exacerbate consumer 
detriment and increase over-indebtedness (problem 1.5) 
5) Reduce barriers for providers offering credit across borders while enabling 
more choice for consumers (problem 2.1, 2.2) 
6) Simplify the existing legal framework and reduce unnecessary burdens 
(problem 2.3) 

The  general  goals  of  the  Directive’s  review  are  to  reduce  the  detriment  of  consumers 
taking out loans in a changing market and to facilitate cross-border provision of consumer 
credit  and  the  competitiveness  of  the  internal  market.  This  is  in  line  with  the  original 
objectives of the Directive, namely securing a consistently high level of consumer protection 
across  the  EU,  thus  contributing  to  consumer  confidence,  and  facilitate  the  emergence  of  a 
well-functioning internal market in consumer credit, creating the best possible conditions for 
the free movement of credit offers. The Evaluation showed that the Directive is only partially 
effective in meeting its objectives and pointed to scope for improvement. 

4.2 Specific objectives 

The specific objectives (SOs) of the review are detailed below. 

  SO1:  Reduce  the  detriment  arising  from  unregulated  credit  products  by  ensuring 
better regulatory coverage of the consumer credit products raising problems for consumer 
protection (addressing sub-problem 1.1). 

  SO2:  Ensure  that  consumers  are  empowered  by  effective  information  on  the  risks, 
costs and impact of credit on their finances, also via digital means, and have enough 
time to process information prior to commitment (addressing sub-problem 1.2). 

  SO3: Ensure that credit granting is based on thorough assessment of the consumer’s 

best interest, both on the part of credit providers and consumers, by: 

o  Countering  practices  exploiting  behavioural  biases  to  nudge  consumers  –  in 
particular vulnerable ones, such as those at risk of poverty and social exclusion  - 
into sub-optimal choices and conduct of business problems (sub-problem 1.3);  
o  Improving  the  creditworthiness  assessment  process,  including  in  the  context  of 

automated decision-making for credit scoring (addressing sub-problem1.4). 

  SO4: Prevent specific individual or systemic situations from exacerbating consumer 
detriment,  by  helping  indebted  consumers  to  better  cope  with  adverse  developments 
including  the  fallout  from  major  economic  crises,  and  lower  their  over-indebtedness 
(addressing sub-problem 1.5). 

  SO5:    Reduce  barriers  for  providers  offering  credit  across  borders  while  enabling 
more choice for consumers, by fostering the level playing field for providers across the 
EU  and  competitive  pressure  from  the  cross-border  provision  of  credit  (addressing  sub-

33 

 
 
 
 
 
problems  2.1  and  2.2).  Moreover,  a  competitive  transparent  and  fair  consumer  credit 
market  will  improve  the  monetary  policy  transmission  through  the  price  and  volume  of 
credit offered to clients.  

  SO6: Simplify the existing legal framework and reduce unnecessary burdens, without 
undermining the aims or benefits of the legislation, by simplifying information disclosure 
requirements through certain channels (addressing sub-problem 2.3).  

5.  WHAT ARE THE AVAILABLE POLICY OPTIONS?  

5.1 What is the baseline from which options are assessed? 

The baseline from which options are assessed (Policy option 0) implies the continuation of the 
current situation, the ‘status quo’, and does not involve the introduction of any new measures, 
for the period 2021-2030. It would require the Commission to continue regularly monitoring 
how the Directive is being implemented at national level, and national authorities to continue 
monitoring and enforcing that credit providers act within the legislative framework.  

As happened since the adoption of the Directive,  efforts  at  national  level to  further develop 
the  regulatory  framework  for  consumer  credit  are  expected  to  continue,  through  either 
legislative or non-regulatory measures. Enforcement authorities would continue to cooperate 
through  the  Consumer  Protection  Cooperation  (CPC)  network  and  the  European  Consumer 
Centres Network (ECC-Net) supported by the European Commission.  

Similarly,  the  CJEU  can  be  expected  to  receive  further  requests  for  preliminary  rulings, 
through  which  it  will  continue  to  interpret  the  provisions  of  the  Directive,  shedding  further 
light on some of the unclear provisions, if required to do so. 

Several  potential  market  developments  are  likely  to  influence  the  identified  problems,  as 
explained in section 2.4 (How will the problem evolve?).  

The  evidence  collected  for  the  Directive’s  Evaluation  suggests  that  the  share  of  consumers 
reporting  problems  decreased  since  2010.  More  generally,  there  was  a  reduction  in  the 
personal  detriment  of  borrowers,  also  thanks  to  the  introduction  of  the  Directive.156 
Although  it  is  difficult  to  assess  to  which  extent,  it  can  be  expected  that  this  trend  will 
continue  in  the  future  to  some  degree  even  in  the  absence  of  further  EU-level  action, 
especially if more Member States decide to adopt stricter measures to regulate issues affecting 
consumers in their territory; this would however contribute to increasing the uneven level of 
consumer protection across the EU.  

The estimated number of consumers affected by problems linked to key provisions of the 
Directive,  varies  from  around  3  to  46  million  people,  depending  on  the  provision  (see 
Annex  4).  The  detriment  from  products  offered  online  which  are  not  explicitly  under  the 

156 This was due to several factors, including the introduction of the Directive but also more stringent legislation 
in some Member States, development and trends of the consumer credit sector itself, increase in compliance and 
increased consumer awareness. Benefits in terms of reduction in consumer detriment due to the Directive since 
2008 are estimated at EUR 2.6 billion, of which EUR 1.55 billion in reduced financial detriment and EUR 1.05 
billion in reduced time losses. See Annex 9. ICF, 2020. Consumer Market Scoreboards. 

34 

 
 
 
 
                                                           
scope of the Directive (e.g. loans from peer-to-peer lending platforms) would not be tackled. 
Moreover, the COVID-19 crisis can be expected to lead to higher levels of over-indebtedness 
in  the  near  future,  especially  among  economically  vulnerable  consumers,  which  are 
disproportionally  affected  by  the  crisis.  Finally,  existing  barriers  for  accessing  databases 
across  borders  would  remain  and  there  would  be  no  decrease  in  costs  stemming  from  the 
Directive incurred by providers willing to offer credit cross-border. 

Stakeholder  consultation  seems  to  confirm  this  analysis.  The  responses  to  the  validation 
survey  on  the  policy  options  suggest  only  a  minority  of  respondent  believes  that  Option  0 
would  be  effective  in  addressing  the  initiative’s  objectives.  The  objectives  relating  to  the 
scope of the Directive and to responsible lending/borrowing are those least effectively tackled 
by Option 0.157 With regard to its impact on the level of over-indebtedness, most stakeholders 
consulted  indicated  that  no  change  should  be  expected  under  this  option.158  Consumer 
representatives,  in  particular,  indicated  that  this  option  would  not  solve  the  problems  that 
consumers  are  currently  facing.  Nevertheless,  several  industry  stakeholders  noted  that  the 
regulatory  stability  provided  by  Option  0  would  be  beneficial  to  them,  particularly  in  the 
COVID-19 context.  

5.2 Description of the policy options 

Besides  the  2021-2030  baseline  scenario,  the  policy  options  analysed  in  this  impact 
assessment are the following: 

Table 3 Summary of the options assessed in the impact assessment 

Option 1: Non-regulatory intervention 
Option 2: Targeted amendment of the Directive to increase legal clarity 

Option 3: Extensive amendment of the 
Directive 

Option 3a: to include certain new provisions, in line 
with existing EU acquis 

Option 3b: to include new provisions going beyond 
existing EU acquis 

The analysis of this multifaceted and complex subject was structured around options that are 
(as  much  as  possible)  mutually  exclusive.  So,  while  Option  2  only  addresses  the 
provisions currently included in the Directive, to clarify certain definitions and terms, and 
further  develop  several  obligations  contained  therein,  Option  3a  and  3b  focus  on  new 
measures to be included in the Directive. The  latter options  would also  include a limited 
number of relevant  measures  from Option  2,  where necessary  to  cover any gaps (i.e. to 
address problems not tackled by new provisions, such as enlarging the Directive’s scope).  

As  shown  in  the  intervention  logic,  the  options  considered  would  address  the  problems 
identified with the aim to achieve the initiative’s objectives (for more details see Annex 5). 

157 Follow-up survey. 5 out of 20 respondents indicated that option 0 would effectively tackle problem 1.1 (4 out 
of 9 business associations, 1 out of 6 national authorities) and problem 1.3 (5 business associations). 
158Follow-up  survey.  Across  all  stakeholder  groups,  13  indicated  that  the  level  of  over-indebtedness  would 
remain the same and 2 that it would increase. 

35 

 
 
 
 
                                                           
Table 4 Policy Options considered 

Unregulated 
products 

Information 
provision 

Policy option 1 

Policy option 2 

Policy option 3a 

Policy option 3b 

Non regulatory measures  Targeted amendment of 
the Directive to increase 
legal clarity 

1.1: Issue an official 
communication clarifying 
the definitions of ‘credit 
provider’ and ‘credit 
intermediary’ contained in 
Article 3 (including peer-
to-peer lending platforms) 

2.1: Remove the minimum 
and maximum thresholds 
2.2: Include currently 
excluded loans within its 
scope of application  
2.3: Amend the definition 
of some key terms which 
affect its scope  

Extensive amendment to 
include certain new 
provisions in line with 
existing EU acquis 

Extensive amendment to 
include provisions going 
beyond existing EU 
acquis 

3.1 Include a new provision addressing specifically peer-
to-peer lending  

From other policy options: 
Policy option 2: measures 2.1, 2.2, 2.3  

1.2: Implement an 
awareness raising 
campaign through the 
European Consumer 
Centres providing clarity to 
consumers on elements that 
are identified as unclear 
(e.g. APR) 
1.3: Issue communication 
to clarify terms that may be 
subject to interpretation 
(e.g. ‘in good time’ and 
‘adequate explanations’ 
concerning pre-contractual 
information) 

2.4: Reduce the amount of 
information to be provided 
to consumers in advertising 
focusing on key 
information, when 
provided through certain 
channels (e.g. radio) 
2.5: Present key pre-
contractual information in 
a more prominent way 
(without reducing the 
amount of information) 
2.6: Establish detailed 
requirements in relation to 
when the pre-contractual 
information should be 
provided 
2.7: Provide a more 
detailed definition of some 
key terms related to the 
obligations contained in the 
Directive  
2.8: Improve conditions for 
enforcement through the 
inclusion of a non-
exhaustive list of criteria to 
be taken into consideration 
by competent authorities 
when issuing sanctions 

3a.2: Establish detailed 
requirements in relation to 
the provision of adequate 
explanations (in line with 
Art. 16 MCD) 
3a.3: Improve conditions 
for enforcement by 
introducing an article on 
Competent Authorities’ (in 
line with Art 5 MCD)  
3a.4: Introduce a provision 
referring to the 4% rule set 
in the Omnibus Directive 
for cross-border 
widespread infringements 
(Art. 8b(4) of Directive 
93/13/EEC as amended by 
Directive 2019/2161) 
3a.5 Include a provision on 
the presentation of 
information based on the 
principles of the European 
Accessibility Act 
(presenting information in 
an adequate and suitable 
way on different channels). 
From other policy options: 
See: 3a.6, 3a.7 (advisory 
services) 

3b.2: Include more details 
on the way information 
should be displayed to 
consumers at advertising 
and pre-contractual stage 
(e.g. format, font size) 
3b.3: Include an obligation 
on creditors to provide 
information about changes 
in the conditions of the 
credits in case special 
measures are applied 
following a systemic and 
exceptional economic 
disruption 
From other policy options: 
Policy option 3a: measure 

3a.2 (adequate 
explanations), 3a.3, 
3a.4 (enforcement), 
3a.7, 3a.8 (advisory 
services), 3a.12 
(prohibition pre-ticked 
boxes) 

Policy option 2: measure 
2.4 (amount of 
information in 
advertising), 2.6 (when 
provide information) 

Practices  
exploiting 
consumer’s 
situation 
and patterns 
of behaviour 

1.4: Implement an 
awareness raising 
campaign through the 
European Consumer 
Centres to promote 
responsible borrowing  
1.5: Establish EU-level 
guidelines on how to 
regulate aspects not 
harmonised which are 

By expanding the scope of 
the Directive and 
strengthening information 
provision requirements and 
creditworthiness 
assessment requirements, 
practices exploiting 
consumer’s situation and 
patterns of behaviour will 
be tackled 

3a.6: Establish a legal 
obligation for credit 
providers and 
intermediaries to promote 
responsible lending (in line 
with Art. 7(1) MCD) 
3a.7: Establish an 
obligation upon credit 
providers to inform 
consumers whether 

3b.4: Establish the 
obligation upon Member 
States to set interest 
rate/APR caps, without 
specific rules or guidelines 
on how these should be 
calculated 
3b.5: Establish an 
obligation for Member 
States to adopt measures to 

36 

 
 
 
 
 
 
 
relevant to ensure 
responsible lending (e.g. 
limiting cross-selling 
practices, setting interest 
rate caps, establishing an 
obligation for credit 
providers to advise 
consumers on suitable 
products, limiting or 
banning rollover practices)  

2.9: Provide more detailed 
requirements in relation to 
how CWAs should be 
conducted  
See: 2.7 (‘sufficient 
information’), 2.8 
(enforcement) 

Creditworthi
ness 
assessment 
(CWA) 

1.6: Providing guidance on 
the type of information that 
should be assessed during a 
CWA, in line with the EBA 
guidelines on loan 
origination 
1.7: Establish guidelines on 
the use of automated 
decision-making to conduct 
CWA 
See: 1.3 (‘sufficient 
information’) 

37 

limit the additional 
costs/interests that credit 
providers can charge when 
a credit is rolled over 
3b.6: Prohibit unsolicited 
sale of credit 
From other policy options: 
Policy option 3a: measures 
3a.6 (responsible 
lending), 3a.7, 3a.8 
(advisory services), 
3a.9 (ban product 
tying), 3a.12 
(prohibition pre-ticked 
boxes) 

3b.7: Introduction an 
obligation to consult 
databases to perform 
CWAs 
From other policy options: 
Policy option 3a: measures 

3a.13, 3a.15 
(strengthened CWA + 
explanations) 

advisory services can be 
provided (in line with Art. 
22(1) MCD) 
3a.8: Adopt standards on 
the provision of advisory 
services to consumers (in 
line with Art. 22(3) MCD) 
3a.9: Prohibit product-
tying practices (in line with 
Art. 12 MCD.   
3a.10: Establish conduct of 
business rules on 
remuneration policies to 
ensure that it does not 
promote irresponsible 
lending (in line with Art. 
7(3) MCD) 
3a.11: Establish an 
obligation upon credit 
providers and 
intermediaries to ensure 
that staff members have the 
proper set of skills and 
knowledge (in line with 
Art. 9 MCD) 
3a.12: : Prohibit the use of 
pre-ticked boxes when 
offering consumer credit 
(in line with the CRD) 

3a.13: Indicate that CWAs 
should be carried out based 
on information on financial 
and economic 
circumstances, necessary, 
sufficient and 
proportionate. Member 
States shall ensure that the 
procedures and information 
on which the assessment is 
based are established, 
documented and 
maintained (in line with 
Art. 18 MCD) 
3a.14: Include a provision 
on the use of alternative 
sources of data to conduct 
creditworthiness 
assessments reflecting the 
principles of the GDPR 
(data minimisation, 
accuracy and storage 
limitation, Art. 5 GDPR) 
3a.15: Include a provision 
establishing the right of 
consumers to receive an 
explanation on how and on 

 
 
 
 
 
Individual 
circumstanc
es or 
systemic 
economic 
disruptions 
leading to 
over-
indebtednes
s 

1.8: Increased support to 
capacity building of 
consumer organisations 
and public bodies via 
funding on financial 
education, debt advice and 
assistance 
1.9: Establish EU-level 
guidance on measures that 
can be adopted by Member 
States to support indebted 
consumers whose financial 
situation is impacted by an 
external economic 
disruption (e.g. temporary 
moratoria on credit 
payments) 

Expanding the scope of the 
Directive and 
strengthening information 
provision requirements and 
creditworthiness 
assessment requirements, 
will help creating a more 
resilient framework for 
consumer protection also 
in the event of individual 
situations or systemic 
economic disruptions, 
while helping to prevent 
over-indebtedness 

what basis a decision on 
their creditworthiness was 
reached (i.e. reflecting the 
GDPR principles 
concerning automated 
decision-making) 
See: 3a.3, 3a.4 
(enforcement) 

3a.16: Establish an 
obligation on Member 
States to promote 
financial/digital literacy 
initiatives, without 
establishing minimum 
requirements on the 
availability and the content 
of these initiatives (in line 
with Art. 6(1) MCD) 
3a.17: Establish an 
obligation on the 
Commission to regularly 
assess national financial 
education/digital literacy 
initiatives and identify best 
practices, and to publish 
the findings (in line with 
Art. 6(2) MCD) 
3a.18: Establish an 
obligation upon Member 
States to adopt measures to 
encourage creditors to 
exercise reasonable 
forbearance, limiting the 
charges on default 
payments (partially in line 
with Art. 28 MCD) 
See: 3a.3 (availability 
advisory services), 3a.12 
(preventive action through 
CWA)  

Cross-
border offer  

Recommendations and 
guidelines would create 
more even conditions for 
the provision of consumer 
credit across borders 

2.10: Obligation for credit 
databases to hold certain 
reliable negative data, to 
enhance reciprocity. 
See: 2.1, 2.2, 2.3 
(extension scope) 

See: 3a.3, 3a.4 
(enforcement) 
From other policy options: 
Policy option 2: 2.1, 2.2, 

2.3 (extension scope), 
2.10 

3b.8: Establish an 
obligation upon Member 
States to provide – directly 
or indirectly – debt advice 
services for over-indebted 
or otherwise vulnerable 
consumers  
3b.9: Establish an 
obligation upon creditors to 
inform low-scoring 
consumers that debt advice 
services are available, in  
particular if credit is 
granted following a 
negative outcome of the 
consumer creditworthiness 
assessment 
3b.10: Establish an 
obligation to include 
specific contractual clauses 
intended to cover cases of 
exceptional and systemic 
economic disruptions (e.g. 
debt relief/payment 
moratoria)  
From other policy options: 
Policy option 3a: measure 
3a.17 (financial 
literacy), 3a.18 
(forbearance) 

3b.11: Centralised 
databases, holding (at 
least) reliable negative data 
recording late payments, 
would be set up by 
Member States 
From other policy options: 
Policy option 2: : 2.1, 2.2, 
2.3 (extension scope) 

Cross-
border 
access 

Non-regulatory measures 
under option 1 would 
create a stronger EU 
framework for consumer 
protection facilitating 
cross-border access 

See: 2.5, 2.6 (pre-
contractual information), 
2.7 (clarify definitions and 
terms), 2.9 (CWA) 

See: measures 3a.2 
(adequate explanations), 
3a.5 (responsible lending), 
3a.6, 3a.7 (advisory 
services), 3a.8 (ban 
product tying); 3a.12 

3b.12: Introduction of a 
basic credit product that 
providers should make 
available to consumers 
See: 3b.4 (APR caps), 3b.6 
(ban unsolicited sale), 

38 

 
 
 
 
 
(strengthened CWA), 
3a.15, 3a.17 (financial 
education, forbearance) 

Simplificati
on and 
burden 
reduction 

Recommendations and 
guidelines would improve 
legal clarity for businesses 
and reduce administrative 
burden. 

See: 2.4 (amount of 
information in advertising), 
2.5 (presentation of key 
pre-contractual information 
in a more prominent way) 

See: 3a.5 (presentation of 
information on different 
channels) 

3b.8, 3b.9 (debt advice) 
From other policy options: 
Policy option 3a: measures 

3a.2 (adequate 
explanations), 3a.6 
(responsible lending), 
3a.7, 3a.8 (advisory 
services), 3a.9 (ban 
product tying), 3a.13 
(strengthened CWA) 
Policy option 2: measure 
2.4 (amount of 
information in 
advertising), 2.6 (when 
provide information) 

See: 2.4 (amount of 
information in advertising) 

Option 1: Non-regulatory intervention 

Policy option 1 envisages the adoption of non-regulatory measures that seek to provide clarity 
on certain aspects of the Directive or to address elements that are currently not (sufficiently) 
covered in the Directive: 

 

Issue  a  recommendation  to  Member  States  clarifying  the  definitions  of  ‘credit  provider’ 
and ‘credit intermediary’, specifying the new types of consumer credit (e.g. peer-to-peer 
lending) that fall under the scope of the Directive. 

 

 

  Clarifying the terms of the Directive that may be subject to interpretation (e.g. information 
to be provided ‘in good time’, ‘adequate explanations’ on pre-contractual information). 
Implement  awareness  raising  campaigns  through  the  European  Consumer  Centres  to 
promote  responsible  lending  and  borrowing,  and  providing  clarity  to  consumers  on 
elements that are identified as unclear (e.g. APR). 
Issue  a  recommendation  on  how  to  regulate  aspects  not  harmonised  by  the  Directive 
which  are  relevant  to  ensure  responsible  lending  (e.g.  limiting  cross-selling  practices, 
setting  interest  rate  caps,  establishing  an  obligation  for  credit  providers  to  advise 
consumers on suitable products, limiting or banning rollover practices). 
Issue  a  recommendation  on  the  type  of  information  that  should  be  considered  for 
creditworthiness  assessments,  including  on  the  use  of  alternative  sources  of  data  and 
automated  decision-making,  in  line  with  the  EBA  guidelines  on  loan  origination  and 
monitoring.159 Establish a recommendation on measures that can be adopted by Member 
States to support indebted consumers whose financial situation is impacted by an external 
economic disruption (e.g. moratoria on credit payments), based on existing best practices. 

 

159 EBA, 2020c. 

39 

 
 
 
 
 
 
 
                                                           
 

Increase  support  to  capacity  building  of  consumer  organisations  and  public  bodies  via 
funding on financial education and debt advice. 

  Establish  a  recommendation  on  the  type  of  negative  information  that  credit  databases 

should contain to improve reciprocity and cross-border provision of credit. 

Option 2: Targeted amendment of the Directive to increase legal clarity 

Option  2  includes  targeted  amendments  to  the  Directive’s  provisions,  to  clarify  certain 
definitions and terms, and further develop several obligations contained therein.  

Under this option, the lower and upper thresholds of application of the Directive (EUR 200 
and  EUR  75 000)  would  be  removed,  so  the  Directive’s  obligations  would  be  extended  to 
cover small value loans which are currently creating risks for consumers (e.g. short-term high-
cost loans) and all loans above EUR 75 000 (at the moment, only loans above EUR 75 000 
whose purpose is the renovation of a residential immovable property are included in the scope 
of  the  Directive,160  as  amended  by  the  Mortgage  Credit  Directive).  Moreover  the  credit 
products  currently  excluded  from  its  scope  of  application  (including  but  not  only,  leasing 
agreements, overdraft facilities, loans granted free of interest, pawn shops) would be included. 
A  more  detailed  definition  of  some  key  terms  which  affect  its  scope  of  application  (e.g. 
‘credit  provider’,  ‘credit  intermediary’)  would  also  be  provided,  to  address  market 
developments linked to digitalisation (e.g. peer-to-peer lending). 

The amount of information to be provided to consumers in advertising would be adjusted to 
focus  on  key  information  when  provided  through  certain  channels  (audio  advertisement  on 
radio  broadcasts),  therefore  increasing  its  effectiveness  for  consumers  and  leading  to 
simplification  and  burden  reduction  for  providers  and  for  certain  media  channels.  The 
presentation of pre-contractual information would be made more effective through a ‘tiered 
disclosure’  approach,  i.e.  a  summary  of  few  key  elements  helping  consumers  to  compare 
offers  provided  on  top  of  the  SECCI,  which  would  remain  unchanged  to  provide  all  the 
necessary  information  to  consumers  while  avoiding  burdensome  changes  for  providers. 
Detailed  requirements  in  relation  to  when  the  pre-contractual  information  would  be 
provided, through a clarification of “in good time before the consumer is bound by any credit 
agreement  or  offer”,  and  on  how  information  should  be  provided  in  a  “prominent”  way 
would be included too. 

The  revised  Directive  would  also  provide  a  clarification  of  some  key  terms  related  to  the 
obligations  contained  in  the  Directive  (e.g.  ‘sufficient  information’,  ‘prominently’, 
‘adequate  explanations’),  improving  legal  clarity  and  fostering  harmonisation  between  the 
implementation  of  the  Directive  at  national  level,  thus  enhancing  competition  between 
providers  across  borders  and  creating  a  stronger  EU  framework  for  consumer  protection 
facilitating cross-border lending. 

The  revised  Directive  would  provide  more  detailed  requirements  in  relation  to  how  the 
assessment of consumer creditworthiness should be conducted, by defining which categories 

160 Article 2 (2a) of the Consumer Credit Directive. 

40 

 
 
 
 
                                                           
of personal data may be processed. It would also include an obligation for credit databases to 
hold certain reliable negative data, to improve cross-border access based on reciprocity. 

To  improve  conditions  for  enforcement,  with  regard  to  the  penalties  applicable  to 
infringements of the national provisions adopted pursuant to the Directive, under Option 2 the 
revised  Directive  would  complement  current  Article  23  with  non-exhaustive  and  indicative 
criteria that enforcement authorities may take into account for the imposition of penalties. 
Article 20 on regulation of creditors would also be reinforced.  

By  expanding  the  scope  of  the  Directive,  strengthening  information  provision  requirements 
and  creditworthiness  assessment  requirements,  and  strengthen  enforcement,  practices 
exploiting  consumer’s  situation  and  patterns  of  behaviour  would  be  tackled.  These  changes 
would  also  help  to  create  a  more  resilient  framework  for  consumer  protection,  also  in  the 
event  of  specific  individual  situations  or  systemic  economic  disruptions  exacerbating 
consumer  detriment,  especially  of  vulnerable  consumers,  while  helping  to  prevent  over-
indebtedness.  

Option 3: Extensive amendment of the Directive 

Option  3  (through  its  two  sub-options)  would  address  the  problems  identified  and  meet  the 
objectives  through  an  extensive  amendment  of  the  Directive,  including  new  provisions  and 
obligations in line with existing EU acquis or going beyond it.  

Option  3a:  Extensive  amendment  to  include  certain  new  provisions,  in  line  with  existing 
EU acquis 

Option 3a consists in amending the Directive to include new provisions and obligations in 
line with other relevant EU legislation, in particular the Mortgage Credit Directive (‘MCD’) 
rules  in  order  to  address  similar  issues.161  This  option  would  also  include  all  the  relevant 
measures from Option 2, where necessary to cover any gaps (i.e. address problems that not 
addressed by additional provisions).  

In  line  with  Option  2,  certain  definitions  and  terms  would  be  clarified,  the  scope  of 
application of the Directive extended through the deletion of lower and upper thresholds and 
the  inclusion  of  credit  products  currently  excluded  from  the  its  scope  of  application. 
Furthermore,  a  new  provision  addressing  specifically  peer-to-peer  lending  would  be 
included.  

To enhance consumer empowerment through effective information, a provision tailoring the 
principles of the European Accessibility Act (Directive (EU) 2019/882), in particular on the 
display of information in an adequate way on different channels, to consumer credit would be 
included  and  detailed  requirements  would  be  established  to  provide  adequate  explanations, 
drawing on provisions in the MCD. 

161 More information on the provisions in line with the Mortgage Credit Directive can be found in Annex 5. 

41 

 
 
 
 
                                                           
Moreover, to ensure consumers are not nudged into sub-optimal choices, the revised Directive 
would request express consent from the consumer, banning the use of pre-ticked boxes, in a 
way similar as provided for under Article 22 of the Consumer Rights Directive (2011/83/EU). 
It  would  also  prohibit  product-tying  practices  (similar  to  Article  12  of  the  MCD),  establish 
conduct of business rules (similar to Article 7 of the MCD) and a legal obligation for credit 
providers and credit intermediaries to promote responsible lending (i.e. to act honestly, fairly, 
transparently and professionally, taking account of the rights and interests of consumers), and 
adopt standards on the provision of advisory services (similar to Article 22 of the MCD). 

Also drawing on the MCD, under Option 3a, new rules would oblige Member States to ensure 
that  the  procedures  and  information  on  which  the  creditworthiness  assessment  is  based  are 
established,  documented  and  maintained.  In  addition,  the  revised  Directive  would  provide 
more  detailed  requirements  on  how  to  conduct  the  consumer  creditworthiness 
assessment. However, differently from the MCD, credit can be granted following a negative 
outcome of the consumer creditworthiness assessment. 

The revised Directive would include a provision concerning the use of alternative sources of 
data  to  conduct  creditworthiness  assessments  reflecting  the  General  Data  Protection 
Regulation  (‘GDPR’,  (EU)  2016/679)  principles,  in  particular  the  principles  of  data 
minimization, accuracy,  storage limitation  as laid  down in  Article 5 of the Regulation  (EU) 
2016/679.  Furthermore,  it  would  establish  a  right  of  consumers  to  request  and  receive  an 
explanation  on  how  and  on  what  basis  a  decision  on  their  creditworthiness  was  reached, 
mirroring the GDPR principles concerning automated decision-making.  

With  regard  to  the  penalties  applicable  to  infringements  of  the  national  provisions  adopted 
pursuant to the Directive, under option 3a, the revised Directive would introduce, in case of a 
cross-border  provision  of  credit  constituting  a  widespread  infringement  in  the  sense  of  the 
CPC  Regulation,  162    the  possibility  for  the  supervisory  authority  to  issue  a  fine  whose 
maximum amount would be at least 4% of the trader’s annual turnover in the Member State or 
Member  States  concerned.  This  rule  is  inspired  from  the  Omnibus  Directive  on  Consumer 
Protection  ((EU)  2019/2161,  Articles  1,  3(6),  4(13)).  The  revised  Directive  would  also 
complement  Article  20  on  regulating  creditors  with  an  article  on  ‘Competent  Authorities’, 
inspired from Article 5 (‘Competent Authorities’) of the MCD. 

To  prevent  that  specific  individual  or  systemic  situations  exacerbate  consumer  detriment, 
Option  3a  would  introduce  obligations  on  Member  States  to  adopt  measures  encouraging 
creditors  to  exercise  reasonable  forbearance,  including  by  limiting  the  charges  on  default 
payments,  and  to  promote  financial  education/digital  literacy  initiatives  and  require  that 
the Commission monitors and assesses them. 
These  measures,  drawing  on  the  MCD,  would  empower  consumers  to  fully  understand  and 
make the best of available choices, and contribute to prevent over-indebtedness situations.  

162 Namely when penalties are to be imposed in accordance with Article 21 of Regulation (EU) 2017/2394.  

42 

 
 
 
 
 
                                                           
As in Option 2, a non-exhaustive list of categories of data, including reliable negative data 
of the consumer, to be collected by credit databases would be proposed, in order to improve 
access  to  databases  cross-border,  based  on  a  reciprocity  principle.  The  non-exhaustive  list 
may  include  instances  of  repetitive  failure  of  repayment  by  the  consumer  of  a  credit.  The 
possible non-exhaustive list of categories of data will be based on the principle of necessity 
and  proportionality  and  in  line  with  data  protection  principles,  in  particular  the  principle  of 
purpose limitation and the processing of lawfulness, fairness and transparency. 

Option 3b: Extensive amendment of the Directive to include provisions not addressed by the 
EU acquis 

Option  3b  consists  in  an  extensive  amendment  to  include  additional  obligations  and 
provisions  that  go  beyond  the  alignment  with  other  relevant  EU  legislation,  either 
because  they  cover  new  aspects  (e.g.  interest  rate/costs  caps,  unsolicited  credit)  or  because 
they go beyond what is established in other relevant EU legislation (e.g. further requirements 
for financial education initiatives). This option would also include any relevant measures 
from Options 2 and 3a, where relevant to cover any gaps (i.e. address problems that would 
not be addressed by more detailed provisions) or complement the legislative action.  

Option  3b  would  be  aligned  with  Options  2  as  regards  the  extension  of  the  scope  of 
application  of  the  Directive,  the  clarification  of  definitions,  and  the  new  provisions  on 
information disclosure at advertising and pre-contractual stage.  

More detailed requirements on the way information should be displayed at advertising and 
pre-contractual  stage  (e.g.  format,  font  size),  and  an  obligation  on  creditors  to  provide 
information about changes in the conditions of the credits in case special measures are 
applied following systemic and exceptional economic disruptions would be included. 

Furthermore,  an  obligation  upon  Member  States  to  set  interest  rate/APR  caps  would  be 
introduced, to avoid excessive rates far beyond the rate necessary to integrate the credit risk 
resulting from  the borrower profile and the refinancing costs,  together with  an obligation to 
adopt measures to limit to the additional costs that credit providers can charge when a credit is 
rolled  over.  To  prevent  exploitation  of  consumer  biases  and  irresponsible  borrowing, 
unsolicited credit sales would be prohibited.  

Moreover,  it  would  also  include  relevant  measures  from  Option  3a  concerning 
responsible lending and business conduct obligations, standards for advisory services and 
detailed  requirements  in  relation  to  the  provision  of  adequate  explanations,  ban  of  product-
tying  practices  and  pre-ticked  boxes,  the  creditworthiness  assessment  process,  and 
forbearance. When granted to low scoring consumers or following a negative creditworthiness 
assessment,  an  obligation  would  be  imposed  on  banks  to  monitor  the  situation  of 
vulnerable debtors and redirect them to debt advice services (‘early detection’). 

To support consumers vulnerable to over-indebtedness, the revised Directive would establish 
an  obligation  upon  Member  States  to  provide  –  directly  or  indirectly  –  independent  debt 
advice  services  for  over-indebted  or  otherwise  vulnerable  consumers  (including 
consumers with a low credit scoring), and adopt minimum standards for the provision of these 

43 

 
 
 
 
services. It would also include an obligation for creditors to inform consumers at risk of over-
indebtedness  that  debt  advice  services  are  available,  and  include  an  obligation  on  Member 
States to promote financial education/digital literacy initiatives, in line with Option 3a. 

Finally,  the  revised  Directive  would  include  an  obligation  to  include  specific  contractual 
clauses  intended  to  cover  cases  of  exceptional  or  systemic  economic  disruptions  (e.g.  debt 
relief/payment moratorium). 

To enhance cross-border provision of credit and access for consumers, a basic credit product 
that providers should make available to consumers would be introduced to enhance their trust 
in credits purchased abroad, and public centralised databases at national level, holding (at 
least) reliable data recording late payments and containing identification of national residents, 
would be set up by Member States. 

5.3 Options discarded at an early stage 

The case for (partial) repeal of the Directive does not seem supported. The Directive is a 
full harmonisation instrument in the areas it legislates, building on a 1986 Directive regulating 
consumer  credit  (repealed  by  the  2008  Directive).  As  confirmed  by  the  Evaluation,  the 
Directive’s  added  value  lies  in  strengthening  consumer  confidence  in  the  use  of 
consumer credit across the EU by ensuring the development of a specific and robust legal 
framework to protect consumers concluding a credit agreement. Thus, repealing the Directive, 
or  parts  of  it,  would  lead  to  regulatory  fragmentation.  Concretely,  this  could  lead  to 
different  formulas  for  the  calculation  of  the  annual  percentage  rate  of  charge  and  different 
requirements  in  terms  of  content  and  format  for  creditors  to  provide  information,  while  the 
SECCI  has  proved  very  effective.  In  addition,  with  the  lack  of  harmonised  consolidated 
rights, such as the right of withdrawal and the right of early repayment, Member States could 
decide  to  abandon  these  rights  or  adopt  less  protective  provisions.  For  instance,  before  the 
Directive, Member States applied very different timeframes and procedures for consumers to 
withdraw  from  a  credit  agreement.  Finally,  even  though  the  current  creditworthiness 
assessment rules resulted in limited harmonisation, and in a variety of rules applied at national 
level, this is rather an argument to reinforce the provision. 

The  EU  economy  needs  strong  household  consumption  (accounting  for  around  53%  of  EU 
GDP)  and  part  of  this  consumption  (around  12%)  is  financed  by  credit.  Accordingly, 
repealing the Directive or its parts  would  affect  both  the objective of  ensuring a high and 
consistent  level  of  consumer  protection  and  the  objective  of  fostering  a  cross-border 
consumer  credit  market.  In  addition,  stakeholders  consistently  agree  that  consumer  credit, 
and  consumer  protection  pertaining  thereto,  benefits  from  EU-level  action.  This  was 
confirmed  by  the  results  of  the  Evaluation,  by  the  2020  public  consultation,  and  by  a  2019 
European  Economic  and  Social  Committee  survey,  in  which  83%  of  the  respondents 
considered that the Directive increased transparency and fairness.163  

163 INT/884-EESC-2019-01055-00-00-ri-tra. 

44 

 
 
 
 
                                                           
The option to adopt a regulation directly applicable under the national legislation of Member 
States instead of a directive was also discarded at an early stage, due to the possible non-
compliance  with  the  principles  of  subsidiarity  and  proportionality.  A  directive  will  enable 
Member  States  to  amend  the  legislation  in  force  (subsequent  to  the  transposal  of  Directive 
2008/48/EC) to the extent that is need to ensure compliance, containing the impact of such a 
reform on their legislative systems. 

6.  WHAT ARE THE IMPACTS OF THE DIFFERENT POLICY OPTIONS AND WHO WILL BE 

AFFECTED?  

This section presents an overview of the impacts of each of the policy options, on different 
categories of stakeholders, against three main criteria: 

  Effectiveness,  i.e.  how  successful  the  policy  option  is  expected  to  be  in  addressing  the 
specific objectives outlined in the intervention logic. The effectiveness of each option is 
rated using a scale ranging from 0 (neutral) to +++++ (extremely effective). 

  Efficiency:  this  assesses  the  impacts  of  the  revision  of  the  Directive  on  the  stakeholder 
groups, which can be either positive or negative. The impacts were scored from -5 (very 
negative impact) to 5 (very positive impact).  The attribution of scores and the description 
of the assessments are the result of an analytical exercise detailed in the supporting study 
which  has  examined,  analysed  and  triangulated  the  evidence  collected  –  also  for  the 
Directive’s  Evaluation  -  including  the  feedback  expressed  by  stakeholders  consulted.  A 
wide  array  of  economic,  social,  environmental,  and  overarching  impacts  have  been 
considered.  Based  on 
likelihood  and  relevance  for 
stakeholders,164 six main categories of significant impacts were selected (see Annex 4). 
Since  the  policy  options  are  expected  to  have  a  negligible  effect  on  environmental 
impacts165 (e.g. on environmental risk or climate change), those were not assessed.  

their  expected  magnitude, 

Table 5 Selected significant impacts 

Benefits 

Costs 

Main category of impacts 
Consumer trust, choices and behavior, and inclusion 
Consumer protection and reduced detriment 
Industry level playing field and cross-border sales 
Industry compliance costs 
EU public administration costs for adoption and enforcement 
Member-State public administration costs for adoption and enforcement 

  Coherence,  which  assesses  how  the  measures  planned  would  interact  with  existing  EU 
legislation.  The  score  ranges  from  0  (no  change  to  the  level  of  legal  coherence)  to  5 
(increase of EU legal coherence to a very great extent). It also includes a legal feasibility 
assessment including necessity, proportionality and subsidiarity. 

164  Specific  impacts  on  SMEs  have  not  been  identified  to  be  significant,  so  they  have  not  been  assessed 
separately. 
165 Even if they are expected to increase, green loans still account for only a fraction of the outstanding debt of 
households, see Annex 6 Market developments. 

45 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
6.1 Policy option 1: Non-regulatory intervention  

Overall,  this  policy  option  would  allow  the  EU  to  make  very  limited  progress  towards  the 
specific objectives laid down, hence it is deemed to be slightly effective. It could moderately 
enhance coherence with  other EU legislation. Different  categories of stakeholders would be 
affected, positively or negatively, to a very limited extent. 

Effectiveness   

Specific objectives addressed 
SO1: Reducing the detriment arising from unregulated products 
SO2: Ensuring that consumers are empowered by effective information 

SO3: Ensure that credit granting is based on thorough assessment of the consumer best interest 

SO4: Prevent that specific individual or systemic situations exacerbate consumer detriment 
SO5: Reduce barriers for providers offering credit across borders while enabling more choice for 
consumers 
SO6: Simplify the existing legal framework and reduce unnecessary burdens 
+ (Slightly effective) ++ (Moderately effective) +++ (Effective) ++++ (Very effective)  

 Rating 
 +  
 + 
 ++ 
 + 

+ 

 0 

Policy  option  1  would  allow  to  make  very  limited  progress  towards  the  initiative’s  specific 
objectives.  It  would  somehow  facilitate  the  interpretation  of  some  Directive  provisions.  It 
would also provide a reference framework for Member States wishing to regulate aspects not 
covered by the Directive. However, two key limitations affecting its effectiveness have been 
identified: some of the issues identified (e.g. limited scope of the Directive) cannot be fully 
tackled  through  non-regulatory  measures;  and  its  effectiveness  would  ultimately  depend  on 
the  will  of  national  legislators  and  credit  providers  to  follow  the  non-binding  guidance. 
Increased support to financial education and debt advice initiatives could help reducing over-
indebtedness.  As  regards  awareness  campaigns,  to  provide  clarity  on  elements  identified  as 
unclear (e.g. APR) or to promote responsible borrowing, they could have a positive effect on 
the behaviour of consumers, especially if targeted to population groups with a lower level of 
financial  literacy,  but  their  effectiveness  is  not  expected  to  be  high.  Option  1  would  not  be 
effective  in  simplifying  the  existing  legal  framework.  According  to  the  feedback  gathered, 
industry representatives are the main group that believes that Option 1 would be effective in 
addressing the identified problems.  

Efficiency  

Main category of impacts 
Consumer trust (choices and behaviour) and inclusion 
Consumer protection and reduced detriment  
Industry level-playing field and competition and cross-border credit 
Industry compliance costs 
EU public administration costs 
Member-State public administration costs 

(from -5 to +5) 

 Score 
 1 
 1 
 0 
 -1 
 -1 
 0 

46 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Consumers:  Compared  to  the  baseline,  Option  1  is  expected  to  (slightly)  improve  the 
consumer  trust  and  inclusion.  Consumers  could  be  more  aware  of  the  potential  risks  of 
credit,  better  understand  information  disclosed  by  credit  providers  and  empowered  to 
make  better  choices.  Consumers  could  be  better  protected,  thanks  to  strengthened 
creditworthiness  assessments,  enhanced  responsible  lending  and  borrowing  but  also  in 
situations  of  exceptional  systemic  crises.  However,  the  non-binding  nature  of  most 
measures under Option 1 means that the impact on consumer choice should be quite low. 
  Society:  Supporting  Member  States’  efforts  to  raise  the  level  of  financial  literacy  and 
provide debt advice, these measures could have a slightly positive impact on the level of 
over-indebtedness and inclusion of vulnerable consumers. 

  Businesses:  Option  1  is  not  expected  to  trigger  major  compliance  costs  for  credit 
providers.  Because  the  measures  are  non-binding,  credit  providers/intermediaries  might 
avoid  implementing  any  changes  which  would  entail  important  costs  (unless  Member 
States decides to adopt national legislation/binding guidelines at national level, following 
the  EU-level  guidance).  The  clarification  of  the  definitions  contained  in  the  Directive, 
would  only  impact  providers  who  offer  products  currently  under  the  Directive’s  scope. 
Option 1 would have a negligible impact on the level playing field and competition in the 
consumer credit market, as well as on the provision of cross-border credit. 

  Public  administration:  EU  public  administration  would  be  impacted  by  Option  1,  given 
that  non-binding  guidance  documents  would  require  time  and  resources  for  their 
development,  stakeholder  engagement,  dissemination  and  monitoring.  The  support  to 
national organisations or the launch of awareness raising campaigns through the European 
Consumer  Centres  would  generate  costs  too.  The  implementation  of  this  option  would 
require  national  authorities  to  dedicate  time  and  resources  to  contribute  to  the 
development  and  implementation  of  the  measures.  On  other  hand,  the  clarification  of 
obligations  could  benefit,  to  some  extent,  enforcement  authorities  by  improving  legal 
clarity and facilitating the interpretation of the Directive.  

Coherence  

Score: 2 (From 0 to 5) 

The  implementation  of  Policy  option  1  can  enhance  EU  legal  coherence  as  long  as  the 
measures envisioned are in line with existing EU legislation. For example, providing guidance 
on the type of information to be assessed in creditworthiness assessments, would complement 
the  existing  EBA  guidelines  on  loan  origination  and  monitoring.  Similarly,  establishing 
guidelines on the use of automated decision-making to  conduct  creditworthiness  assessment 
would  reflect  the  data  protection  principles  established  by  the  GDPR  in  Article  5. 
Nonetheless, their overall impact would be limited in addressing the problems identified due 
to their non-binding character.  

6.2 Policy option 2: Targeted amendment of the Directive to increase legal clarity 

This  policy  option  is  deemed  to  be  quite  effective  in  addressing  the  specific  objectives 
highlighted in the intervention logic. It would enhance coherence with other EU legislation. 
The effects on stakeholders would vary per different category, but overall would be positive. 

47 

 
 
 
 
 
 
 
 
 
 
 
Effectiveness   

Specific objectives addressed 
SO1: Reducing the detriment arising from unregulated products 
SO2: Ensuring that consumers are empowered by effective information 
SO3: Ensure that credit granting is based on thorough assessment of the consumer best interest 
SO4: Prevent that specific individual or systemic situations exacerbate consumer detriment 
SO5: Reduce barriers for providers offering credit across borders while enabling more choice for 
consumers 
SO6: Simplify the existing legal framework and reduce unnecessary burdens 
+ (Slightly effective) ++ (Moderately effective) +++ (Effective) ++++ (Very effective)  

 Rating 
 ++++  
 ++++ 
 ++ 
 + 

++ 

 +++ 

Policy  option  2  would  be  particularly  effective  in  reducing  the  detriment  arising  from 
unregulated  products,  by  ensuring  that  products  identified  as  particularly  problematic  (e.g. 
credits  below  EUR  200)  are  brought  under  the  Directive’s  scope.  This  option  would  also 
tackle effectively the inadequacy of requirements for the provision of information, thanks to: 
the  simplification  of  information  provided  at  advertising  stage  on  certain  channels  (in  line 
with behavioural evidence on the way that consumers read and process information); detailed 
requirements  on how and when the pre-contractual information  should be provided; and the 
more  detailed  definition  of  ‘adequate  explanations’.  The  streamlining  of  information  would 
also be effective in simplifying the current legal framework and reduce unnecessary burden. 

Option 2 would improve the conditions for credit providers to lend responsibly by providing 
more clarity on the minimum requirements for creditworthiness assessment checks, including 
a  more  detailed  definition  of  ‘sufficient  information’.  However,  it  would  not  ensure  a  high 
degree of harmonisation, as it does not specify the information to be assessed. Option 2 would 
also  moderately  tackle  practices  exploiting  consumer’s  situation  and  patterns  of  behaviour, 
and create a more resilient framework for consumer protection also in the event of individual 
situations or systemic economic disruptions, while helping to prevent over-indebtedness. 

The broadening of the scope and the amendment of definitions are likely to be quite effective 
in levelling the playing field for providers by ensuring that the Directive’s rules are applied to 
a greater share of credit providers across the EU.  

Efficiency 

Main category of impacts 
Consumer trust (choices and behaviour) and inclusion 
Consumer protection and reduced detriment  
Industry level-playing field and competition and cross-border credit 
Industry compliance costs 
EU public administration costs 
Member-State public administration costs 

(from -5 to +5) 

 Score 
 2 
 2 
 1 
 -2 
 -1 
 0 

  Consumers:  The  measures  included  in  Option  2  would  positively  influence  consumer 
behaviour  and  consumer  choice.  Consumers  would  receive  information  in  a  more 
effective  way  and  have  enough  time  to  process  it.  As  a  result  of  the  broadened  scope, 

48 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
improved  creditworthiness  assessment  and  enhanced  enforcement  (thanks  to  improved 
legal  clarity),  consumer  protection  would  increase,  especially  for  vulnerable  consumers, 
often using small value short-term high-cost loans. The price of consumer credit currently 
outside  of  the  Directive’s  scope  could  increase  as  higher  costs  for  providers  would  be 
passed on to consumers, but this should stabilise over time. 

  Society: Several measures included in Option 2 could lead to stronger prevention of over-

indebtedness, but no remedies are considered.  

  Businesses:  The  measures  featured  in  Option  2  are  likely  to  entail  implementation  costs 
for  businesses,  but  also  to  increase  the  level  playing  field  within  and  across  Member 
States, thanks to the reduction in legal fragmentation. Competition in the consumer credit 
market  may  decrease  to  some  extent  due  to  the  impact  on  credit  providers  offering 
currently unregulated products, some of which may disappear from the market because of 
their business models,166 will no longer be profitable. However, continued competition in 
the very competitive landscape of banks and non-bank lenders would mitigate this risk.  
  Public administration: Any legislative amendment is expected to generate higher costs for 
EU authorities than non-legislative intervention (adoption, monitoring the transposition). 
However, the costs would mostly be one-off, while the benefits would be maintained over 
time.  Similarly,  national  authorities  are  expected  to  incur  some  unavoidable  costs 
(transposition, reporting, dissemination), even though higher legal clarity should facilitate 
enforcement and ultimately have a positive impact.  

Coherence  

Score: 3 (From 0 to 5) 

Policy  option  2  involves  a  series  of  targeted  amendments  to  provisions  that  are  already 
included in the Directive. The proposed measures would build upon the existing principles of 
the Directive but change some of the elements that have proved insufficient or inadequate in 
achieving the main objectives of the Directive. Such intervention is deemed legally feasible, 
and  necessary  to  avoid  fragmentation  of  national  regulatory  regimes  and  provide  a 
harmonised  EU-level  framework  In  general,  the  measures  considered  (scope  extension, 
streamlining  information,  clarifying  creditworthiness  assessment)  should  not  affect  the  EU 
legal coherence. However, the amendments to key definitions would reduce legal coherence 
with similar definitions in the Mortgage Credit Directive, currently under review. 

6.3 Policy  option  3a:  Extensive  amendment  of  the  Directive  to  include  certain  new 

provisions, in line with existing EU acquis 

This  policy  option  would  effectively  address  the  initiative’s  specific  objectives  and  would 
lead to  the highest  level  of coherence. The effects  on stakeholders would vary, with  clearly 
positive  effects  for  consumers,  diverse  impacts  on  businesses  (significant  compliance  costs 
but increased level playing field) and moderate burden for public administrations. 

166 In certain cases, poor performance in repayment is considered part of a profitable creditor’s business model 
i.e. revenues remain high despite high default rates. For example, the UK payday lender Wonga  – also active in 
the EU - with a loss rate (part of revenues taken by the losses) of 41% and default rate of 9% (versus 16% and 
2% for credit unions), still had a 27% profit margin (versus 35% of credit unions). See EFIN, Financité, 2015. 

49 

 
 
 
 
 
 
 
 
 
 
 
                                                           
 Rating 
 +++++  
 ++ 
 ++++ 
 +++ 

Effectiveness   

Specific objectives addressed 
SO1: Reducing the detriment arising from unregulated products 
SO2: Ensuring that consumers are empowered by effective information 

SO3: Ensure that credit granting is based on thorough assessment of the consumer best interest 
SO4: Prevent that specific individual or systemic situations exacerbate consumer detriment 
SO5: Reduce barriers for providers offering credit across borders while enabling more choice for 
consumers 
SO6: Simplify the existing legal framework and reduce unnecessary burdens 
++ (Moderately effective) +++ (Effective) ++++ (Very effective) +++++ (Extremely effective)  

+++ 

 + 

Overall, this policy option is considered effective. In terms of reducing the detriment arising 
from  unregulated  products,  Option  3a  includes  the  same  scope-related  measures  presented 
under  Option  2,  which  would  effectively  reduce  the  detriment  caused  by  these  products. 
Moreover, this option would include a specific provision on peer-to-peer consumer lending, to 
effectively capture platforms offering this kind of credit. Concerning information provided to 
consumers,  this  option  would  introduce  more  details  on  the  obligation  to  provide  adequate 
explanations  (drawing  on  Art.  16  of  the  Mortgage  Credit  Directive),  and  on  the  display  of 
information in an adequate way on different channels (in line with the European Accessibility 
Act principles). The requirements on the presentation of information and the clarification of 
existing provisions, would create a more coherent framework for credit provision, improving 
legal clarity for businesses and leading to a moderate reduction of unnecessary burden. 

The  inclusion  of  certain  provisions  on  responsible  lending  drawing  on  the  Mortgage  Credit 
Directive  are  expected  to  be  effective  in  improving  the  protection  of  consumers,  but  they 
would  not  tackle  responsible  product  design.  The  changes  to  creditworthiness  assessment 
rules and provisions on the use of alternative data and automated decision-making would help 
ensuring that credit granting is  based on thorough assessment of the consumer best  interest. 
To  strengthen  the  enforcement  of  these  provisions,  Option  3a  would  introduce  a  provision 
referring to the 4% rule set in the Omnibus Directive.167  

On the protection and assistance of indebted and over-indebted consumers, the provision on 
forbearance measures is expected to be rather effective. Finally, on top of broadening of the 
scope  and  the  amending  of  definitions,  enhancing  the  level  playing  field,  this  option  would 
reduce legal fragmentation and hence barriers for providers offering credit across borders.  

Efficiency 

Main category of impacts 
Consumer trust (choices and behaviour) and inclusion 
Consumer protection and reduced detriment  

 Score 
 3 
 3 

167 In cross-border cases, the possibility for a supervisory authority to issue a fine whose maximum amount is at 
least  4%  of  the  credit  provider/intermediary’s  annual  turnover  in  the  Member  State(s)  concerned.  Considering 
that  the  Omnibus  Directive  covers  consumer  credit,  the  measure  will  not  change  drastically  the  way  that  the 
CCD is being enforced, but it may contribute to a more coordinated enforcement of provisions across the EU. 

50 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Main category of impacts 
Industry level-playing field and competition and cross-border credit 
Industry compliance costs 
EU public administration costs 
Member-State public administration costs 
(From – 5 to +5) 

 Score 
 2 
 -3 
 -2 
 0 

  Consumers: Policy option 3a is expected to have a positive impact on consumer trust, in 
particular  new  rules  on  business  conduct  and  remuneration  and  on  financial  advice. 
Measures  limiting  practices  exploiting  consumers’  situations  and  patterns  of  behaviour 
would influence positively consumer choice. Extended scope, measures on information to 
consumers  and  more  precise  rules  on  creditworthiness  assessments  would  reduce 
consumer  detriment.  Moreover,  those  measures  would  increase  legal  certainty,  making 
enforcement  easier,  and  thereby  further  enhancing  the  protection  of  consumer  rights. 
Option  3a  is  also  expected  to  ultimately  reflect  positively  on  the  reduction  of  consumer 
detriment across the EU (e.g. forbearance measures).  

  Society: The promotion of responsible lending combined with the broadening of the scope 
is expected to contribute to limit over-indebtedness and to increase financial stability. 
  Businesses:  Several  of  the  measures  under  this  option  would  require  businesses  to 
familiarise  themselves  with  the  new  legislative  requirements  (even  though  for  the 
provisions which draw on the Mortgage Credit Directive the impact for lenders who offer 
mortgage credit, such as banks, would be lower than for those who only provide consumer 
credit),  increase  internal  communication  and  training  staff.  These  factors  could  create  a 
high  (albeit  one-off)  cost  burden  for  industry.  The  relatively  higher  degree  of 
harmonisation,  together  with  the  broadening  of  the  scope,  would  result  in  a  more  level 
playing field for credit providers across borders. 

  Public  administration:  This  option  would  create  a  cost  burden  for  EU  public 
administrations,  but  since  the  amended  provisions  would  be  modelled  after  existing 
legislation,  less  resources  to  develop  them  would  be  required.  National  authorities  will 
bear  costs  linked  to  the  transposition  of  the  revised  Directive  and  to  some  of  its 
obligations. However, the expected positive impact on enforcement due to enhanced legal 
clarity and alignment with other EU legislation would offset them. 

Coherence 

Score: 4 (from 0 to 5) 

Alignment with other EU legislation, is deemed beneficial because it allows for more uniform 
rules, improving legal clarity. The Evaluation found that the most common examples of legal 
incoherence  mentioned  by  stakeholders  concern  the  Mortgage  Credit  Directive,  particularly 
its  requirements  for  responsible  lending  and  specific  obligations  in  some  areas  that  are 
relevant to prevent over-indebtedness. This option would also include measures in line with 
other EU legislation (e.g. GDPR or the Omnibus Directive).  

51 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.4 Policy option 3b: Extensive amendment of the Directive to include provisions going 

beyond existing EU acquis 

This option is deemed to be very effective in addressing the specific objectives. Even though 
it would guarantee more coherence than a set of national responses to the identified problems, 
it  would  lead  to  lower  coherence  than  other  options.  Consumers  would  benefit  from  a  very 
protective  framework,  but  industry  would  have  to  face  very  high  compliance  costs.  Public 
administrations would face significant costs, but benefit from efficiency gains in enforcement. 

 Rating 
 +++++  
 ++++ 
 +++++ 
 ++++ 

Effectiveness   

Specific objectives addressed 
SO1: Reducing the detriment arising from unregulated products 

SO2: Ensuring that consumers are empowered by effective information 

SO3: Ensure that credit granting is based on thorough assessment of the consumer best interest 

SO4: Prevent that specific individual or systemic situations exacerbate consumer detriment 
SO5: Reduce barriers for providers offering credit across borders while enabling more choice for 
consumers 
 ++ 
SO6: Simplify the existing legal framework and reduce unnecessary burdens 
++ (Moderately effective) +++ (Effective) ++++ (Very effective) +++++ (Extremely effective) 

++ 

Overall,  Option  3b  would  address  effectively  the  initiative’s  specific  objectives  and  is  also 
expected to result in a decreased level of over-indebtedness.168 

It would entail the broadening of the scope of application of the Directive in the same way as 
Options  3a,  thus  responding  to  the  scope-related  issues  identified  in  an  extremely  effective 
manner. It is also deemed to be very effective in addressing issues related to the information-
related  requirements,  facilitating  offer  comparison,  and  in  reducing  the  chances  that 
consumers are misled into buying products  they  do not  need. Option  3b would also  address 
aspects  related to  product  design (e.g.  APR/interest  rate caps) which are expected to  reduce 
the  incentives  to  provide  some  of  the  products  that  are  riskier  for  consumers.  This  policy 
option  is  also  the  most  effective  in  terms  of  supporting  and  protecting  indebted  and  over-
indebted consumers. This  is  because it establishes obligations for Member States and  credit 
providers concerning the provision of debt advice services, and it establishes an obligation for 
creditors  to  inform  low-scoring  consumers  that  debt  advice  services  are  available  (early 
detection  mechanism).  At  the  same  time,  this  option  would  only  be  moderately  effective  in 
reducing  barriers  for  providers  offering  cross-border  credit,  and  unnecessary  burden  for 
businesses  (mostly  due  to  the  reduction  of  information  provided  in  advertising  on  certain 
channels).  

Efficiency 

Main category of impacts 
Consumer trust (choices and behaviour) and inclusion 

 Score 
 4 

168  Follow-up  survey.  Across  all  stakeholder  groups,  3  indicated  that  the  level  of  over-indebtedness  would 
remain the same, 7 that it would decrease, and 4 that it would increase. 

52 

 
 
 
 
 
 
 
 
 
 
                                                           
Main category of impacts 
Consumer protection and reduced detriment  
Industry level-playing field and competition and cross-border credit 
Industry compliance costs 
EU public administration costs 
Member-State public administration costs 

(From -5 to 5) 

 Score 
 4 
 1 
 -4 
 -3 
 -1 

  Consumers: Bans on unsolicited credit offers or on the use of pre-ticked boxes, as well as 
provisions  on  the  display  of  information  are  likely  to  impact  consumer  behaviour  very 
positively by promoting a more informed and careful purchase decision-making process. 
Consumers  would  be  significantly  better  protected  against  irresponsible  or  otherwise 
questionable lending practices and thanks to measures on debt advice services, including 
early  detection.  The  establishment  of  APR/interest  rate  caps  as  well  as  the  limits  to  the 
costs  that  can  be  charged  for  rollover  practices  are  expected  to  lead  to  a  reduction  in 
consumer detriment, especially coupled with the extension of the scope of application of 
the  Directive.  This  will  have  a  particularly  positive  impact  on  vulnerable  consumers,  as 
they are the main group using high-cost credit. 

  Society: This option is likely to originate the greater positive impact on the reduction of 
over-indebtedness,  thanks  to  measures on product  design and  enhanced support  to  over-
indebted people. It would also have a positive impact on increasing financial stability. 

  Businesses:  Some  of 

the  measures  under  Option  3b  will  require  significant 
implementation costs as they are likely to lead to many changes. Price caps will also lead 
to lost revenue, in particular for providers offering products currently exempted from the 
Directive,  and  possibly  push  them  out  of  the  market,  thus  decreasing  competition. 
Considering  the  high  degree  of  legal  harmonisation  it  offers,  this  option has  the  highest 
potential to facilitate the cross-border sales of consumer credit.  

  Public  administration:  This  option  would  generate  important  costs  for  EU  public 
administration,  the  highest  among  the  options  considered.  This  is  also  true  for  national 
administration,  but  the  fact  that  some  measures  set  an  obligation  without  establishing 
standards  or  precise  details  (e.g.  debt  advice  services,  price  caps)  would  limit  costs. 
Moreover, some of these costs are likely to be offset by the efficiency gains expected in 
relation to the enforcement of the obligations at national level, because of lower level of 
problems faced by consumers due to a very protective framework, and clearer provisions.  

Coherence  

Score: 2 (from 0 to 5) 

Measures  proposed  under  this  policy  option  are  inspired  by  legal  measures  that  have  been 
implemented  at  national  level  and  which  go  beyond  the  requirements  of  the  Directive.  For 
instance,  caps  on  interest  rate/APR  have  already  been  implemented  by  23  Member  States 
(even though they vary widely). These measures would ensure a high level of harmonisation 
across  the  EU  and  guarantee  more  coherence  than  individual,  potentially  heterogeneous 
initiatives  to  respond  to  the  identified  problems.  However,  they  would  lead  to  a  lower 
coherence with existing EU legislation. The obligation to include specific contractual clauses 

53 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
to  cover  cases  of  exceptional  and  systemic  economic  disruptions  might  create  the  risk  of 
possible future overlaps, since EU institutions might consider adopting horizontal legislation 
to address the same matters, in the light of the COVID-19 crisis. 

7.  HOW DO THE OPTIONS COMPARE? 

This  section  compares  the  performance  of  the  five  policy  options  considered,  based  on  the 
elements developed in Section 6.  

7.1 Effectiveness: expected achievement of the initiative’s objectives 

The main objective of an EU-level intervention is to address the main problems identified in 
the  field  of  consumer  credit.  Therefore,  ensuring  that  the  policy  option  proposed  by  the 
Commission  effectively  addresses  the  problems  observed  -  in  line  with  the  specific  policy 
objectives - is paramount to justify an EU intervention. 

Table 6 Effectiveness (from 0 to +++++) 

Specific objectives addressed 

Option 1 

Option 2 

Option 3a  Option 3b 

++ 

+ 

+ 

SO1: Reducing the detriment arising from 
unregulated products 
SO2: Ensuring that consumers are 
empowered by effective information 
SO3: Ensure that credit granting is based 
on thorough assessment of the consumer 
best interest 
SO4: Prevent that specific individual or 
systemic situations exacerbate consumer 
detriment 
SO5: Reduce barriers for providers 
offering credit across borders while 
enabling more choice for consumers 
SO6: Simplify the existing legal framework 
and reduce unnecessary burdens 
Total effectiveness (translated in a 0-5 scale)  1 

+ 

+ 

neutral 

++++ 

++++ 

++ 

+ 

++ 

+++ 

2.5 

+++++  

+++++  

++ 

++++ 

++++ 

+++++ 

+++ 

++++ 

+++ 

++ 

+ 

3 

++ 

3, 5 

Option  1  would  not  achieve  one  of  the  specific  objectives,  while  the  other  options  would 
achieve all of them, to a varying extent. Option 3b would be the most effective in achieving 
the  initiative  objectives,  especially  in  terms  of  guaranteeing  a  high  level  of  consumer 
protection (SO1, SO3), thanks for instance to the introduction of APR/interest rate caps; but 
also  on  preventing  that  individual  or  systemic  situations  exacerbate  consumer  detriment 
(SO5),  mainly  thanks  to  the  measure  on  debt  advice  services,  which  is  deemed  to  be  very 
effective  in  reducing  the  risk  of  debt  cycles  and  remedying  over-indebtedness.  Option  3a 
would  achieve  all  the  defined  objectives  and  especially  ensure  high  consumer  protection 
(even though to a lesser extent than Option 3b) and would improve the level playing field, and 
reduce legal fragmentation and barriers for offering credit across borders, but would address 
the objective on simplification only to  a limited extent. Option 2 would also achieve all the 
defined  objectives,  but  to  a  lesser  extent  than  3a  and  3b  in  terms  of  consumer  protection. 
However,  it  is  the  Option  which  is  more  likely  to  achieve  the  specific  objective  on 

54 

 
 
 
 
simplification. All the legislative options would be very effective to achieve SO1 on reducing 
the  detriment  arising  from  unregulated  products  because  of  the  extension  of  the  scope  to 
currently  exempted  risky  products  and  the  clarification  of  terms  and  definitions  leading  to 
enhanced legal clarity. 

7.2 Efficiency: impacts on businesses and consumers 

The decision to adopt EU-level measures should also carefully consider the potential benefits 
and costs of implementing it. To compare the efficiency of the different options, we have 
used a Multi-Criteria Analysis looking at a set of impacts: three benefits and three costs (see 
Section  6).  The  overall  score  for  the  efficiency  of  each  of  the  options  is  made  up  of  six 
individual scores, one for each impact assessed (see Section 6), which has been attributed a 
certain weight, depending on its importance.  

We decided to take a conservative approach, allowing overall 50% of the total weight to 
benefits  and  50%  to  costs.  It  is  rather  conservative  because  in  fact,  benefits  should  be 
expected to be more important than costs. Better compliance and clearer procedures, mean 
increased  consumer  confidence,  and  a  more  business  friendly  environment  (less 
problems, less litigation costs, less recovery costs, etc.). So the one-off costs to adapt to the 
revised  Directive,  on  the  longer  run  could  be  offset  by  a  business  gain.  Moreover,  the 
measures to prevent/remedy over-indebtedness and increase social inclusion are expected 
to generate positive externalities. However, with this approach we want to ensure our analysis 
would  thoroughly  address  the  compliance  of  the  options  with  the  proportionality  principle, 
clearly  striking  a  balance  between  the  benefits  for  consumers  and  credit  providers,  and  the 
costs for credit providers and intermediaries (eventually passed on to consumers169), and EU-
level and national authorities. Each impact assessed has been attributed a certain weight: 

Impact 
category 

Weight 

Consumer 
trust,  choices, 
behaviour 
and inclusion 
10% 

Benefits (50%) 
Consumer 
protection 
and 
detriment 
30% 

reduced 

Level-playing 
field 
and 
cross-border 
sales 
10% 

Industry 
compliance 
costs 

Costs (50%) 
EU 
authorities 
costs 

MS 
authorities 
costs 

40% 

8% 

2% 

  Benefits for consumers and the compliance costs which industry would have to incur to 

achieve these benefits are balanced out, each representing 40% of the total weight. 

  Within  the  two  types  of  benefits  for  consumers,  ‘consumer  protection  and  reduced 
detriment’ is the main one and represents 30% of the total weight, while ‘consumer trust, 
behaviour,  choice  and  social  inclusion’  is  secondary  and  consequently  represents  10%. 
Benefits  for  industry  in  terms  of  level  playing  field  and  increased  cross-border  sales 
represent the remaining 10%. 

  Costs  for  national  public  administration,  and  especially  for  the  EU  public 
administration  are  expected  to  be  quite  reduced.  Public  administrations  are  already  in 
charge  of  the  implementation  and  enforcement  of  consumer  credit  legislations,  thus  a 

169 The supporting study was not able to assess to what extent costs are passed on to consumers. 

55 

 
 
 
 
                                                           
 
 
 
change in the legislation would give rise to a moderate one-off costs. Hence, those costs 
represent respectively 8% and 2% of the total weight. 

Under the Multi-Criteria Analysis, the policy option that would represent the best course 
of action is Policy option 3a (score of 0.16), followed by Option 2 (0.08). In contrast, the 
negative values for Options 1 and 3b, indicate that implementing them would be less efficient 
than the baseline option. 

Table 7 Multi-Criteria Analysis (BRG #63) 

Since there was limited evidence to determine the impact of different measures with regard to 
the baseline, in the supporting study only a limited number of measures (11 of around 50)  
were subject to a partial quantitative analysis, entailing a non-exhaustive set of costs and 
benefits for these measures for the period 2021-2030.170 The model assessed costs of drafting 
and transposing legislation and for enforcement and monitoring (EU and national authorities) 
and the main type of compliance costs incurred by banks (e.g. staff training, costs of adapting 
IT  infrastructure,  incremental  labour  costs  stemming  from  the  adoption  and  ongoing 
implementation of a measure). However, the model did not take into account that the costs of 
implementing  provisions  which  draw  on  the  Mortgage  Credit  Directive  for  lenders  who 
already offer mortgage credit, such as banks, could be mitigated by the fact that these lenders 
have already procedure in place for mortgages. Moreover, it was not possible to determine 
to what exact extent, but it is expected that costs are going to be passed on to consumers. 
Benefits  were  assessed  in  terms  of  reduction  in  consumer  financial  detriment  and  in  time 
losses  suffered  by  consumers,  but  not  in  terms  of  benefits  for  industry  stemming  from 

170 In practice, a given measure could entail a wider number of concrete benefits and costs, depending on number 
of factors e.g. the specificity of a national market and various responses from credit providers. 

56 

Input matrix Policy options 0 1 2 3a 3b Cost / benefit category Weight Performance Weighted performance Performance Weighted performance Performance Weighted performance Performance Weighted performance Performance Weighted performance Benefits Consumer trust, choices, behaviour and inclusion 0.1 0 0 1 0.1 2 0.2 3 0.3 4 0.4 Consumer protection and detriment 0.3 0 0 1 0.3 2 0.6 3 0.9 4 1.2 Level-playing field and cross-border sales 0.1 0 0 0 0.0 1 0.1 2 0.2 1 0.1 Costs Compliance costs 0.4 0 0 -1 -0.4 -2 -0.8 -3 -1.2 -4 -1.6 EU authorities 0.02 0 0 -1 -0.02 -1 -0.02 -2 -0.04 -3 -0.06 MS authorities 0.08 0 0 0 0 0 0 0 0 -1 -0.08 Total  1 0 0 0 -0.02 2 0.08 3 0.16 1 -0.04   
 
 
 
 
                                                           
legal clarity or increased level playing field, so they are expected to be higher. Finally, the 
model did not estimate specific costs for non-bank lenders, as well as consumer benefits 
that  could  be  generated  because  of  a  given  measure  implemented  by  non-bank  lenders, 
which could  be very important  because those actors are often less regulated than banks and 
often offer products not covered by the Directive which can be risky for consumers. For these 
reasons, this exercise should be interpreted prudently.  

According to this partial quantification, most of the considered measures would be cost 
effective,  as  benefits  for  consumers  would  outweigh  costs  for  businesses:  for  instance,  the 
removal  of  the  minimum  and  maximum  threshold  (2.1),  inclusion  of  some  of  the  currently 
excluded  loans  within  its  scope  of  application  (2.2),  the  reduction  of  the  amount  of 
information  to  be  provided  to  consumers  in  advertising  focusing  on  key  information, 
especially  when  provided  through  certain  channels  (2.4),  the  presentation  of  key  pre-
contractual information in a more prominent way (2.5) and the prohibition of unsolicited sale 
of credit (3b.6).  

The  model  finds  that  for  few  measures  costs  would  outweigh  benefits.  The  measures  on 
amending  the  definition  of  some  key  terms  which  affect  its  scope  of  application  such  as 
‘credit provider’, ‘credit intermediary’, and providing a more detailed definition of some key 
terms related to the obligations contained in the Directive such as ‘sufficient information’, ‘in 
a  timely  manner’,  ‘prominently’,  ‘adequate  explanations’  (2.3  and  2.7,  assessed  together) 
would  be  quite  costly  for  industry.  However,  as  mentioned  above,  the  model  does  not 
capture benefits for industry in terms of increased legal clarity, level playing field, and 
increased  consumer  confidence  leading  to  increased  business  development.  Those  could 
be very relevant for these  measures, which are included in  all the legislative options, and 
are  expected  to  be  very  effective  in  meeting  the  Directive’s  objectives.  The  measure 
establishing  an  obligation  upon  creditors  to  inform  low-scoring  consumers  whether  debt 
advice services are available (3b.9) would also entail a slightly negative net benefit. 

Box 1: Case study on benefits stemming from improved creditworthiness 

illustrate 

in  a  simple  way  how  an 

improved  assessment  of  the  consumer 
To 
creditworthiness  could  have  a  positive  impact  on  consumers  and  on  preventing  non-
performing  loans,  we  prepared  a  case  study  based  on  simplified  hypotheses  using  data 
from  Banque  de  France  on  outstanding  revolving  credit  in  2019,  including  credit  cards  and 
overdrafts  (currently  covered  by  the  Directive  only  to  a  certain  extent).  For  this  kind  of 
products,  better  creditworthiness  assessment  would  result  from  1)  the  inclusion  of  currently 
exempted  products  in  the  scope  of  the  Directive,  since  the  lender  would  be  subject  to  the 
obligation  to  perform  an  assessment  of  the  potential  borrower’s  creditworthiness  before 
granting  credit,  and  from  2)  more  precise  requirements  on  how  to  assess  consumer 
creditworthiness.  

57 

 
 
 
 
Lender 

Outstanding 
revolving 
credit 
France 
billion)* 

in 
(in 

Interest 
(%)* 

rate 

Hyp1 
Credits  not 
risk  of 
at 
default (%) 

Hyp2 
Reduced 
interest  rate 
(%) 

Hyp3 

Higher  cost 
for 
better 
CWA (%) 

Bank 

26 

Non-bank 

19,8 

5,22 

12,9 

98 

91 

4,22 

9,9 

0,1 

0,5 

*data observed end 2019 

-  The amount of credits not at risk of default for banks is 98%, for non-banks is 91% (1st 

hypothesis).  

-  Better creditworthiness assessment (CWA) should reduce the amount of very risky credits 
granted  by  banks  and  non-banks,  lowering  their  credit  risk  and  in  turn  the  interest  rate 
imposed to consumers. It could lead to a decrease in the interest rate offered to consumers 
of 1% in case of banks and 3% in case of non-bank lenders (2nd hypothesis). This would 
lead  to  benefit  for  consumers  with  non-risky  credits,  who  would  save  money  on  the 
interest rate paid, and for consumers with risky credits, who would not become indebted. 

-  Enhanced  creditworthiness  assessment  would  also  lead  to  increased  costs  for  credit 
providers,  0.1%  of  outstanding  credits  for  banks  and  0.5%  for  non-bank  lenders  (3rd 
hypothesis). 

-  Hypothesis  for  bank  and  non-bank  lenders  differ  because  non-bank  lenders  are  more 
likely  to  offer  consumer  credit  currently  exempted  from  the  Directive  (e.g.  loans  below 
EUR  200),  so  a  change  in  the  scope  of  the  Directive  together  with  enhanced  rules  on 
creditworthiness assessment would have a bigger impact on them.  

  Comparing  benefits  for  consumers  with  non-risky  credits  whose  interest  rate  has  been 
reduced and avoided indebtedness for consumers with risky profiles on the one hand, and 
costs  for  providers  because  of  more  enhanced  creditworthiness  assessment  on  the  other 
hand, we see that improving the creditworthiness assessment would lead to a clear benefit 
for  consumers  (for  this  specific  simulation  1 049  million  EUR  for  consumers  and  125 
million EUR for banks and non-banks, so a benefit/cost ratio > 8). 

  Better  creditworthiness  assessment  would  also  lead  to  lost  interest  for  credit  providers 
who would not grant risky loans anymore, but those loans should not have been granted in 
the first place. It would also lead to better prevention of over-indebtedness for consumers 
at risks and have a positive impact on the reduction of NPLs.  

58 

 
 
 
 
  As  highlighted  by  EBA171,  the  NPL  ratio  for  consumer  lending  in  2019  remained 
significantly higher than the overall NPL ratio, also as a result of looser credit standards. 
There is still work to be done to reduce this ratio of NPLs. 

The measure on setting  up debt  advice services  (3b.8) was not  among those assessed in  the 
supporting study. However, the potential benefits of deploying a universally available and 
freely  accessible  system  of  debt  advice,  was  calculated  in  a  recent  study  by  VVA  and 
CEPS.172  The  study  identifies  the  benefits  of  debt  advice  using  ranges  of  estimated  returns: 
per EUR 1 spent this will provide between EUR 1.4 – 5.3 in terms of equivalent benefits, 
mainly  referring  to  the  social  costs  of  over-indebtedness  avoided.173  Debt  advice  has  a 
direct, beneficial impact on consumers, helping them to resolve financial difficulties, to face 
employment  issues  and  improving  their  quality  of  life  and  mental  health.174  Furthermore,  it 
has also a very positive impact on creditors, since they improve the recovery of debt from 
the borrower and lower the cost of pursuing a debtor. 175  

7.3 Coherence with other EU legislation (and policy objectives) 

Ensuring legal coherence with other EU legislation is an important consideration, since legal 
clarity  and  simplification  of  the  regulatory  framework  are  desirable.  Among  the  options 
considered,  Option  3a  is  the  one  that  would  lead  to  the  highest  level  of  coherence  with 
other EU legislation, followed by Option 2 and 3b. 

Table 8 Coherence (score from 0 to 5) 

Coherence 

Score 

Option 1 

Option 2 

Option 3a 

Option 3b 

2 

3 

4 

2 

Moreover, looking at the coherence with EU policy objectives, such as its digital priorities, 
Option  3a,  together  with  Option  3b  would  better  guarantee  a  future-proof  approach.  In 
fact, on top of tackling information provision online and automated decision making used in 
creditworthiness  assessment,  they  would  tackle  online  practices  exploiting  consumer’s 
situation and patterns of behaviour. 

7.4 Stakeholder views on the options 

This  overview  builds  on  different  consultation  activities  (public  consultation,  interviews, 
surveys, workshops, bilateral exchanges).176 

171 EBA, Thematic note on consumer lending in the EU banking sector, 2020. 
172 VVA and CEPS, 2021. 
173 VVA and CEPS 2021. 
174  In  the  UK,  debt  advice  is  associated  with  an  annual  productivity  gain  of  at  least  GBP  67  million  and  a 
beneficial impact on health worth GBP 74 million a year. Europe Economics, the Money Advice Service, 2018. 
175 Decreased recovery costs amount to a net benefit of at least EUR 149 million annually for creditors active in 
the UK, where debt advice services are well developed. Europe Economics, the Money Advice Service, 2018. 
176  For  a  more  detailed  presentation  and  the  full  list  of  consultation  activities,  see  Annex  2  and  also  the 
Supporting study for the impact assessment (ICF). 

59 

 
 
 
 
                                                           
Consumer  organisations  favour  an  extensive  revision  of  the  Directive  (Options  3a  &  3b). 
They  consider  that  including  all  types  of  credit  under  the  Directive  scope  would  benefit 
consumers  and  decrease  the  risk  of  over-indebtedness  linked  to  risky  credits.177  They 
highlight the potential for positive impact on consumers if the effectiveness of the disclosure 
of information is improved, especially in the digital environment.178 They also support further 
harmonisation  in  the  creditworthiness  assessment  process,  in  alignment  with  the  Mortgage 
Credit  Directive,  and  a  strong  regulatory  framework  to  ensure  data  protection,  transparency 
and  avoid  potential  discrimination.179  Concerning  measures  to  respond  to  systemic  and 
exceptional  economic  disruptions,  consumer  organisations  support  the  provision  on 
forbearance measures (Option 3a), but they would favour a more ambitious EU approach in 
line with Option 3b.180 From Option 3b they also consider very effective caps on APR/interest 
rates  and  debt  advice  services.  Consumer  organisations  support  a  fully  harmonised 
framework at EU level to ensure an equivalent level of protection to all EU citizens. 

Most  industry  representatives  favour  non-regulatory  intervention  (Option  1)  or  targeted 
changes  to  the  Directive  (Option  2)  to  adapt  it  to  the  digitalisation  developments.  Some  of 
them  are  in  favour  of  scope  extension  to  include  credit  below  EUR  200,  which  would  help 
tackling the unlevel  playing field  with  creditors mainly offering products  falling outside the 
current  scope,  such  as  certain  non-bank  lenders.181  However,  nearly  half  of  business 
associations  consider  that  the  scope  of  the  Directive  should  not  be  extended.182  The  large 
majority call for a simplification and reduction of information provided at advertising and pre-
contractual  stage.183  With  regard  to  creditworthiness  assessment,  industry  representatives 
generally  argue  that  a  revision  should  follow  proportionality  principles,  as  too  prescriptive 
measures  would  impose  high  costs  on  credit  providers  and  potentially  reduce  access  to 
credit.184 However, some industry actors such as representatives of online lending platforms 
support  the  harmonisation  of  creditworthiness  assessment  rules  across  Member  States. 
Creditors  and  in  particular  non-bank  lenders  are  also  opposed  to  APR  or  interest  rate  caps 
introduced in Option 3b; however, they appreciate the positive impacts of debt advice services 
on  consumers  and  praise  their  cost  effectiveness.185  Concerning  exceptional  and  systemic 
disruptions,  industry  representatives  commonly  indicated  that  national  responses  and  self-
the  public 
regulatory  mechanisms  would  be  more  adapted; 

their  responses 

to 

in 

177 A common concern relates to creditors falling outside the Directive’s scope, mainly non-bank lenders, as well 
as credits below EUR 200 and new types of credits (respectively 59% and 50% in public consultation replies). 
178  78%  of  consumer  organisations  responding  to  the  public  consultation  favour  the  adoption  of  standardised 
formats and the use of comparison tables. 
179 72% of consumer organisation responding to the public consultation favour higher level of harmonisation in 
the creditworthiness assessment process. 
180 As shown in the public consultation, consumer organisations highly support the implementation of payment 
moratoria measures (78%) or measures encouraging creditors to exercise reasonable forbearance (56%). 
181  In  the  public  consultation,  35%  of  companies  are  concerned  with  this  type  of  creditors  falling  outside  the 
scope of the Directive. 
182 Public consultation, 43% of business associations. 
183 Public consultation, 76% of business associations and 81% of companies. 
184 This was highlighted in the interviews with business associations and also in the feedback on the IIA. 
185 Follow-up survey with business associations. 

60 

 
 
 
 
                                                           
consultation186  they  generally  indicated  that  extra  measures  at  EU  level  are  not  necessary. 
Regarding  the  cross-border  provision  of  credit,  industry  representatives  believe  that  low 
cross-border  credit  is  predominantly  due  to  external  barriers  (e.g.  language,  consumer 
preference for national products).  

National authorities generally support a legislative amendment. Several Member States seem 
to  favour  an  extensive  legislative  change  to  address  the  problems  identified.  Some  of  them 
also  flagged  the  feasibility  of  certain  measures,  e.g.  the  extension  of  the  Directive  scope, 
because  they  have  already  been  implemented  in  several  Member  States.187  The  majority 
supports  the  need  to  adapt  information  to  digital  tools  and  show  it  prominently.188  In  the 
public  consultation,  one  third  supported  higher  harmonisation  in  the  creditworthiness 
assessment process. Several Member States highlighted the effectiveness of APR/interest rate 
caps  (already  implemented  in  23  Member  States)  and  that  measures  to  improve  the 
effectiveness  and  coordination  of  enforcement  actions  could  help  increasing  compliance. 
National  authorities  also  seem  to  agree  that  legislative  measures  on  debt  advice  services 
would  positively  affect  the  level  of  over-indebtedness  and  support  vulnerable  consumers.189 
With  regard  to  exceptional  and  systemic  disruptions,  national  authorities appear  to  favour  a 
national response, even though only a minority of those responding to the public consultation 
replied  that  EU  action  is  not  needed  in  these  cases.190  A  majority  of  national  authorities 
recognise that harmonising rules would support the development of the cross-border market.  

7.5 Comparison of options and proportionality 

Table 9 Ranking of policy options (from 1= better performing to 4=worst performing) 

Assessment 

Option 1  Option  1  would  lead  to  a  limited  improvement  with  respect  to  the  baseline,  especially  in 
terms  of  reduction  of  detriment  from  unregulated  products.  While  it  would  contribute  to 
increase  legal  coherence  and  reduce  uncertainty  due  to  Commission  guidance,  the  gains  in 
other areas are quite limited. 
Effectiveness: 4th | Efficiency: 3rd | Coherence: 3rd (same as 3b) 

Ranking 
4 

Option 2  Option 2 performs well across all assessment criteria. It ranks third in terms of effectiveness 
and it is approximately as efficient as option 3a. Overall, it is outranked by Option 3a, which 
also ensures a higher degree of legal coherence. 
Effectiveness: 3rd | Efficiency: 2nd | Coherence: 2nd 

2 

186 Public consultation, 44% of business associations and 39% of companies. 
187 Feedback to inception impact assessment and online surveys of national authorities. 
188  In  the  public  consultation,  national  authorities  the  provision  of  information  at  pre-contractual  stage  is 
expected to be improved by simplifying information, and focusing on key features of the offer (70%). 
189 ICF surveys with national authorities. 
190 In the public consultation, consumer organisations (78%) tend to claim for anticipative measures such as the 
implementation  of  payment  moratoria  measures  (for  national  authorities  this  is  only  27%),  while  industry 
representatives  generally  indicated  that  extra  measures  at  EU  level  are  not  necessary  given  national  responses 
and  self-regulatory  mechanisms  prove  to  be  more  effective  than  prescriptive  regulations  (44%  of  business 
associations, 39% of companies). 

61 

 
 
 
 
 
                                                           
Option 3a  Option  3a  shows  the  best  performance  in  terms  of  efficiency  (close  to  Option  2)  and,  as 
could  be  expected,  it  ensures  the  highest  degree  of  legal  coherence  with  EU  legislation 
compared to the baseline, but also with EU policy objectives (i.e. future proof framework for 
the digital transition). Its performance in terms of effectiveness is only second to Option 3b. 
Effectiveness: 2nd | Efficiency: 1st | Coherence: 1st  

Option 3b  Option 3b is the legislative package that would lead to the most significant improvement in 
terms of effectiveness. In contrast, it performs comparatively worse with regard to coherence 
and  efficiency,  because  of  the  new  provisions  not  in  line  with  EU  legislation  it  would 
introduce, and because its highly ambitious approach would entail high costs. 
Effectiveness: 1st | Efficiency: 4th | Coherence: 3rd (same as 1) 

1 

3 

The performed analysis highlights that even though Option 3a ranks first, Option 2 scores 
similarly to Option 3a in terms of effectiveness and efficiency (but still slightly lower under 
both criteria) and lower in terms of coherence. Option 3a would entail higher costs, but 
would  also  constitute  a  more  ambitious  and  future  proof  approach  leading  to  higher 
benefits for consumers.191  

Option  3a  is  therefore  the  policy  option  considered  optimal  in  this  impact  assessment. 
However,  some  measures  from  other  options  appear  to  be  very  cost  beneficial,  such  as  the 
prohibition  of  unsolicited  sale  of  credit.  Moreover,  measures  to  simplify  information  in 
advertising  and  make information provided  to  consumers at pre-contractual stage  more 
timely  and  prominent,  not  included  in  option  3a,  would  lead  to  burden  reduction  for 
businesses  and  would  improve  the  effectiveness  of  information  disclosure  for  consumers. 
According  to  recent  studies,  the  setting  up  of  independent  debt  advice  services  seems  to 
have a very cost beneficial impact on society.  

In  accordance  with  the  principle  of  proportionality,  the  proposed  rules  will  not  go  beyond 
what  is  necessary  in  order  to  achieve  the  objectives  set  out  in  section  4.  The  initiative  will 
cover  only  the  aspects  that  Member  States  cannot  achieve  on  their  own  (for  example,  the 
establishment  of  a  uniform  definition  of  creditor  and/or  credit  intermediary  in  light  of  new 
forms of lending created by digitalisation or the widening of the scope of application of the 
Directive  -  these  two  measures  will  help  reduce  the  detriment  arising  from  unregulated 
products) and where the administrative burden and costs are commensurate with the specific 
and general objectives to be achieved (for example, the articles on improving conditions for 
enforcement by introducing an article on Competent  Authorities’ and reinforce  enforcement 
coordination  by  introducing  a  provision  in  line  with  to  the  4%  rule  set  in  the  Omnibus 
Directive for cross-border cases will help achieve the Directive’s two overarching objectives).  

As  such,  proportionality  will  be  embedded  in  the  provisions  of  the  Directive  such  as  the 
article concerning the scope of application of the Directive, the rules on advertising, the rules 
on creditworthiness assessment and credit database and the article on penalties. None of the 
options  analysed  in  this  impact  assessment  goes  beyond  what  is  necessary  to  achieve  the 
objectives. EU action is therefore justified on grounds of proportionality.  

191 Considering the limitations of the partial quantification exercise, which only focuses on certain measures and 
does not cover all the options, we will not include an estimate of costs and benefit per each option here, but more 
information on the individual measures can be found in Annex 3. 

62 

 
 
 
 
 
                                                           
8.  THE PREFERRED OPTION 

Based on our analysis, and considering the support from consumer organisations and several 
national authorities for a comprehensive amendment of the legislation, the preferred option 
is Option 3a, i.e. an amendment of the Consumer Credit Directive to include new provisions, 
in line with existing EU acquis. Taking into account subsidiarity considerations, the scope of 
the  Directive  will  be  extended  to  cover  (explicitly)  peer-to-peer  lending  platforms,  loans 
below  EUR  200,  interest  free  credit,  all  overdraft  facilities  and  all  leasing  agreements 
(measure 2.1 and 2.2), but  it will  not be extended to  pawnshops agreements  or loans above 
EUR 75 000. Regarding pawnshops, the reason for their exclusion is that they do not have an 
evident  cross-border  potential,  so  an  EU  intervention  would  not  be  justified  under  the 
principle of subsidiarity. Similarly, no extension of the scope seems necessary for loans above 
EUR  75  000,  since  there  has  been  no  comprehensive  data  on  such  big  amount  loans  that 
evidently call for EU action.192   

Considering their estimated cost effectiveness and impact on simplification, the following 
measures from other Options will also be included in the preferred option 

  Measure on the reduction of the amount of information to be provided to consumers in 
advertising  focusing  on  key  information  (2.4),  when  provided  through  certain  channels 
(e.g.  audio  advertisements  on  radio  broadcasts)  and  on  how  and when  pre-contractual 
information is presented to consumers to make sure it is done in a more prominent way 
(2.5, 2.6);  

  Measure to prohibit the unsolicited sale of credit products (3b.6); and 
  Measure  to  enhance  the  availability  of  debt  advice  services  (3b.8).  Although  this 
measure was not subject to a comprehensive quantitative assessment in the support study, 
evidence  from  other  studies  demonstrate  clearly  the  positive  impact  on  consumers, 
creditors and the avoidance of social costs of over-indebtedness. 

Considering  the  results  of  the  partial  quantitative  analysis,  the  measure  on  introducing  an 
‘early detection’ mechanism (3b.9) will not be included in the preferred option. 

Moreover, the following one would be included as well: 

  Measure establishing the obligation upon Member States to set interest rate/APR caps, 

without specific rules or guidelines on how these should be calculated (3b.4). 

Introducing  an  obligation  to  set  interest  rate  or  APR  caps  at  national  level  (with  national 
discretion at what level to put such caps) has not been assessed quantitatively due to lack of 
consistent data. However, such caps have proved very effective in protecting consumers, 
often  leading  to  the  disappearance  of  products  which  entail  high  risks  for  borrowers.  Those 
benefits  outweigh  possible  costs  which  should  be  very  limited.  Considering  that  such  caps 
have  already  been  introduced  by  23  Member  States  (plus  four  with  caps  that  apply  to 

192  As  explained  under  Sup-problem  1,  the  Mortgage  Credit  Directive  has  already  widened  the  scope  of  the 
Consumer  Credit  Directive  to  credit  agreements  for  the  renovation  of  a  residential  immovable  property 
involving a total amount of credit above EUR 75 000. 

63 

 
 
 
 
                                                           
defaulted  loans  only),  its  implementation  should  not  bring  any  additional  costs  for  most 
national public administrations and for credit providers active in those countries, so no major 
impacts are expected.  

The overall impact of the final combination of measures is very beneficial, as explained below 
under  the  overall  effectiveness  part  (8.1).  The  selected  measures  from  other  Options  were 
chosen  because  they  are  deemed  to  be  very  positive,  based  on  the  analysis  performed.  The 
additional  measures  that  are  added  from  other  Options  interact  in  a  complementary,  rather 
than  an  overlapping  or  contradictory  way,  with  Option  3a.  This  beneficial  overall  impact 
renders reasonable and justifiable the composition of the preferred option. Thus, the preferred 
option  may  entail  higher  costs,  but  it  also  leads  to  higher  benefits  for  consumers,  and  it  is 
therefore considered to be proportionate.  

8.1 The overall effectiveness of the preferred option 

The preferred option is deemed to be very effective in tackling the problems identified and in 
achieving the initiative’s objectives.  

 

 

It  would  be  very  effective  in  reducing  the  detriment  arising  from  unregulated  products 
(SO1),  by  expanding  the  scope  of  the  Directive  (measure  2.1  and  2.2).  It  would  also 
amend the definition of some key terms which affect its scope of application (2.3) to make 
sure  they  are  fit  for  purpose  add  a  new  provision  addressing  specifically  peer-to-peer 
lending (3.1).  
It  would  also  effectively  ensure  that  consumers  taking  out  a  credit  are  empowered  by 
effective information, also via digital means (SO2), in particular by establishing detailed 
requirements  in  relation  to  the  provision  of  adequate  explanations  to  consumers  (3a.2). 
Moreover,  measures  simplifying  the  information  requirements  at  advertising  stage  for 
certain  channels  (e.g.  radio),  and  measures  ensuring  that  consumers  are  presented  with 
clearer  information,  shown  more  timely  and  prominently  (2.4,  2.5,  2.6),  would  allow 
consumers  to  process  and  understand  information  more  easily.  The  clarification  of 
existing provisions and the reduction of information requirements at advertising stage on 
certain  channels  would  also  create  a  clearer  and  simpler  legal  framework  for  credit 
provision at EU level, and reduce burden on businesses (SO6).  

  Credit granting based on thorough assessment of the consumer best interest (SO3), would 
be  guaranteed  by  the  obligation  for  providers  and  intermediaries  to  promote  responsible 
lending (3a.6). Practices by credit providers exploiting consumer’s situation and patterns 
of behaviour would be tackled through the ban of product tying (3a.9), on the use of pre-
ticked boxes (3a.12) and on unsolicited sale of credit products (3b.6). They would be also 
addressed through the adoption of conduct of business rules on remuneration policy and 
on  rules  on  ensuring  that  staff  members  have  the  proper  set  of  skills  and  knowledge 
(3a.10,  3a.11),  as  well  as  via  the  adoption  of  standards  on  advisory  services  and  an 
obligation  for  creditors  to  inform  consumers  whether  such  services  are  available  (3a.7, 
3a.8). The introduction of interest rate/APR caps at national level would ensure a high and 
consistent  level  of  consumer  protection,  in  particular  for  vulnerable  consumers,  in  all 
Member  States  (3b.4).  The  initiative  would  also  introduce  new  measures  to  make  sure 

64 

 
 
 
 
credits are granted after a thorough assessment of the consumer creditworthiness, based on 
information  on  financial  and  economic  circumstances  that  is  necessary,  sufficient  and 
proportionate  (3a.13).  The  issue  of  alternative  sources  of  data  will  be  tackled  through  a 
specific provision (3a.14), together with  a right  for consumers to  receive  an explanation 
on what basis a decision on their creditworthiness was reached (3a.15).  

  To prevent that specific individual or systemic situations exacerbate consumer detriment 
and  increase  over-indebtedness  (SO4),  preventive  measures  such  as  an  obligation  on 
Member  States  to  promote  financial  education/digital  literacy  initiatives  (3a.16),  and  on 
the Commission to regularly assess such initiatives (3a.17) would be introduced, as well 
as remedies  such  as the obligation upon Member States to  adopt  measures to  encourage 
creditors to exercise reasonable forbearance (3a.18). The measure regarding the setting up 
of debt advice services (3b.8), considered to be very effective in helping both consumers 
to  resolve  financial  difficulties  and  creditors  to  improve  the  recovery  of  debt  from  the 
borrower, would also be included in the preferred option. 

  The  preferred  option  would  also  effectively  reduce  barriers  for  providers  offering  credit 
across borders while enabling more choice for consumers (SO5) via a non-exhaustive list 
of categories of data, including reliable negative data, to be collected by private and public 
credit  databases  (2.10),  as  well  as  through  the  new  provisions  in  line  with  other  EU 
legislation and the clarification of existing provisions, creating more even conditions for 
the provision of consumer credit across borders. 

  Finally,  it  would  also  improve  conditions  for  enforcement  by  introducing  an  article  on 
Competent  Authorities’  (3a.3)  and  reinforce  enforcement  coordination  for  cross-border 
cases193 (3a.4). This would improve the effectiveness of the Directive in achieving all the 
specific objectives, and in particular SO2, SO3 and SO5. 

8.2 Impact on stakeholders 

The preferred option would have different impacts on stakeholders (more details on the results 
and methodology of the partial quantification of a limited number of measures can be found in 
Annex 3 and Annex 9): 

  The  impact  on  consumers  would  be  very  positive.  In  particular  both  consumer  trust, 
protection and reduction of consumer detriment would be affected positively. According 
to  the  limited  quantification  of  some  measures,  the  preferred  option  would  entail  a 
reduction  in  consumer  detriment  linked  to  products  offered  by  banks  of  around  EUR 
1 990 million for the period 2021-2030, in particular thanks to the extension of the scope 
of the Directive, the prohibition of unsolicited sales of credit and pre-ticked boxes and the 
simplification of information disclosure. Moreover, the measures on debt advice and caps 
on APR/interest rates are deemed to be very beneficial measures for consumers. 

  The  impact  on  society  is  also  deemed  very  positive,  thanks  to  measures  preventing  and 
addressing  over-indebtedness,  thus  improving  social  inclusion,  such  as  those  on 

193 The possibility for the supervisory authority to issue a fine whose maximum amount would be at least 4% of 
the trader’s annual turnover in the Member State or Member States concerned. 

65 

 
 
 
 
                                                           
strengthening  creditworthiness  assessments,  and  introducing  forbearance  measures  and 
debt  advice  services.  As  mentioned  above,  per  EUR  1  spent  on  debt  advice,  this  will 
provide  between  EUR  1.4  –  5.3  in  terms  of  equivalent  benefits,  mainly  referring  to  the 
social costs of over-indebtedness avoided.  

  The impact  on  credit providers would be less straightforward.  In fact,  on the one hand 
they would have to face most of the implementation costs of the new Directive, and some 
measures  (e.g.  caps)  would  be  more  costly  for  providers  currently  offering  products  not 
covered  by  the  Directive.  On  the  other  hand,  the  enhanced  legal  clarity  and  the  higher 
degree  of  harmonisation,  together  with  the  broadening  of  the  scope,  would  result  in  a 
more level playing field for credit providers and to some extent facilitate the conditions to 
provide  consumer  credit  cross-border.  Moreover,  the  simplification  of  information 
requirements would reduce costs for providers on the longer run. The cost of the partially 
quantified measures for banks is estimated to be around EUR 1 460 million, in particular 
due  to  scope  extension  and  more  detailed  definitions  (but  the  model  does  not  take  into 
account benefits for industry in terms of level playing field and in terms of increased legal 
clarity).194 

  Public authorities would also face costs. In particular, the EU administration would face 
costs for the legislative amendment of the Directive. National administration would also 
face  a  moderate  burden,  but  the  alignment  with  other  EU  legislation  could  facilitate 
enforcement,  by  simplifying  the  legislative  framework  applicable  to  credit.  The  costs  of 
the partially quantified measures for public administrations would amount to around EUR 
3  million.  The  provision  of  debt  advice  services  in  all  Member  States  would  amount  to 
EUR  22.57  million  per  year,195  so  EUR  230  million  until  2030.  But  the  linked  benefits 
would outweigh those costs (see above). 

  Among  other  market  participants,  credit  intermediaries  would  be  affected  by  the 
changes  included  in  the  preferred  option,  in  particular  from  the  provisions  on  providing 
adequate explanation. The preferred option would also bring benefits to radio broadcasts. 

8.3 Synergies with other legislation  

The preferred option would include several measures in line with other EU legislation.  

Several measures proposed under this policy option, e.g. the alignment on responsible lending 
requirements and the categories of data to be used for creditworthiness, have been inspired by 
the  Mortgage  Credit  Directive  (‘MCD’  2014/17/EU)  requirements.  This  would  achieve  a 
more harmonised legal framework for credit agreements in general.   

The  provision  on  the  use  of  alternative  sources  of  data  to  conduct  creditworthiness 
assessments  would  reflect  the  General  Data  Protection  Regulation  (EU  2016/679,  ‘GDPR’) 
principles in particular the principles of data minimisation, accuracy, storage limitation as 
laid down in Article 5 of the Regulation (EU) 2016/679. This measure, without prejudice to 
the  GDPR,  aims  to  address  the  concerns  (e.g.  processing  of  disproportionate  amounts  of 

194 It is expected that some of these costs are going to be passed on to consumers. 
195 VVA, CEPS, 2021. 

66 

 
 
 
 
                                                           
personal  data)  identified  in  the  processing  of  personal  data  that  are  specific  to  practices 
observed  in  the  consumer  credit  market,  i.e.  the  use  of  alternative  sources  of  data  for 
creditworthiness assessments or the transparency those assessments when they are carried via 
machine learning techniques. The preferred option would also include provisions in line with 
the  Omnibus  Directive  (EU  2019/2161)  and  the  Consumer  Rights  Directive  (2011/83/EU). 
Legal coherence between these legal instruments and the Directive would be increased.  

8.4 REFIT (simplification and improved efficiency) 

The  review  of  the  Directive  is  included  among  the  Commission  Work  Programme  REFIT 
initiative.196 As mentioned above, the Directive’s revision would entail costs for businesses, 
but is also expected to reduce burden on them, thanks to enhanced legal clarity. Moreover, 
several  measures  considered  in  the  preferred  options  (e.g.  scope  extension)  are  already 
implemented  in  several  Member  States,  so  businesses  present  there  would  not  need  to  face 
additional costs.  

The  potential  for  simplification  of  the  proposed  initiative  stems  mainly  from  measures 
simplifying information requirements.197 In fact, the initiative will reduce the advertising 
costs  for  credit  providers/intermediaries  (on  certain  channels  e.g.  radio)  while  ensuring  that 
consumers  are  presented  with  clearer  information,  easier  to  process  and  understand.  Credit 
providers would have to face some limited implementation costs, but would eventually benefit 
from cost reductions in advertising credits, together with the radio industry. Compliance costs 
to  advertise  consumer  credit  will  be  reduced  thanks  to  simplified  information  requirements 
which  could  in  turn  lead  to  higher  investment  in  advertising  via  radio  broadcasts,  hence  in 
increased  revenues  for  them.  According  to  the  supporting  study,  the  potential  for 
simplification  of  requirements  for  advertising  consumer  credit  on  radio  broadcasts  can  be 
estimated at EUR 1.4 million a year, so 14 million over the period 2021-2030.  

The burden reduction of  adapting  information requirements for digital use is  difficult  to 
ascertain.  Adapting  the  form  for  mobile  use  has  an  initial  cost  but  once  these  have  been 
prepared,  it  could  be  less  burdensome  to  provide  these  online  than  the  full  SECCI  (which 
would still need to be provided anyway, such as via e-mail). In view of the fact that 36% of 
consumers  entered  a  credit  agreement  online198  this  burden  reduction  could  ultimately 
impact over 25 million personal bank loans annually. 

As  regards  reduced  burden  for  public  administrations,  the  higher  degree  of  legal  clarity 
and  the  simplified  regulatory  framework  applicable  to  credit  (also  thanks  to  synergies  with 
other existing legislation) is expected to reduce the number of complaints and increasing the 
level  of  certainty  and  compliance,  which  would  render  enforcement  procedures  more 
efficient. Specific measures to reinforce coordination and improve conditions for enforcement 
are  also  expected  to  result  in  efficiency  gains  in  relation  to  the  enforcement  of  the 

196  It  also  builds  on  the  Evaluation  which  was  conducted  following  a  REFIT  Platform  Opinion  focusing  on 
Article 4 of the Directive (standard information to be provided to consumers). 
197 Most business representatives consulted indicated that information requirements are among the  main issues 
they face because they are burdensome and not necessarily fit for purpose. 
198 CCD Evaluation survey of consumers (Q30). 

67 

 
 
 
 
                                                           
Directive’s obligations. Moreover, the initiative should reduce the need for interpretation by 
the CJEU, ultimately reducing the burden on EU public administration. 

68 

 
 
 
 
9.  HOW WOULD ACTUAL IMPACTS BE MONITORED AND EVALUATED? 

The Commission will monitor the implementation of the revised Directive, if adopted, after its entry into force. A commitment to evaluate the 
impacts of the new legislation, will be included in the draft proposal. The indicators proposed to monitor the impacts of the new legislation focus 
on the achievement of the specific objectives, in order to be able to assess the Directive’s effectiveness, but also on its efficiency and coherence. 
The Commission will be mainly in charge of monitoring the Directive’s impact, based on the data provided by Member States authorities and 
credit providers, which will be based on existing data sources where possible to avoid additional burdens on the different stakeholders.  

Indicators  
GENERAL 
■  Trust and comparability, problems and detriment and expectations and choice in the 

consumer credit sector for different categories of stakeholders  

■  Total costs of the CCD (breakdown per provision), per category of stakeholder  
■  Total benefits of the CCD (breakdown per provision), per category of stakeholder 
■  Number, share and type of case law that relate to clarity of CCD legislation  
■  Number of issues identified that relate to incoherence in the CCD itself, to incoherence 

with other national legislation or with other EU legislation 

SO1 Reduce the detriment arising from unregulated credit products 
■  Number and share of creditors that do not comply with specific elements of the CCD 
■  Share of stakeholders that consider that definitions in the CCD succeed in ensuring 

consumer protection and market performance 

Data source 

Actors  

■  Consumer market scoreboard 
■  Market monitoring surveys 
■  Enforcement authorities 
■  Surveys/interviews with relevant 

stakeholders at EU and national level 

■  Market studies 
■  Eurobarometer 

■  Enforcement authorities 
■  Stakeholder surveys/interviews  
■  Market studies 
■  Eurobarometer 

■  European Commission 
■  Member States 

■  European Commission 
■  Member States 

■  Number and market share of new market developments for consumer credit 
■  Number/share of consumer complaints on new credit types coming into the market 
SO2 Ensure that consumers are empowered by effective information on the risks, costs and impact of credit on their finances, also via digital means 
■  Share of stakeholders that consider information through advertising is accurate, clear, 

■  European Commission 
■  Member States 

timely and free of charge, online and offline 

■  Evidence of the clarity of SECCI, online and offline 
■  Number of days in advance of a credit offer the consumer received the SECCI 
■  Number of consumers (in)directly charged for any information provided 
■  Share of stakeholders consulted that consider the APR helps consumers in comparing 

credit offers 

■  Number/share of consumer complaints concerning adequate explanations 

69 

■  Enforcement authorities/CPC 
■  Stakeholder surveys/interviews  
■  Behavioural/market studies 
■  Consumer and creditor surveys 
■  Mystery shopping exercises (e.g. 

through EBA) 

■  Member States expert group on the 

implementation of the CCD 

 
 
 
 
■  Number of CPC cases related to widespread infringements of the Directive’s 

provisions on information requirements 

SO3 Ensure that credit granting is based on thorough assessment of the consumer’s best interest, both on the part of credit providers and consumers 
■  Number/share of consumer complaints relating to the conduct of creditors or credit 

intermediaries 

■  Number/share of consumer complaints relating to the provision of advisory services 
■  Number/share of consumer complaints on CWA 
■  Number/share of consumer complaints relating to explanations on how a decision on 

■  Enforcement authorities/CPC 
■  Stakeholder surveys/interviews  
■  Behavioural/market studies 
■  Consumer and creditor surveys 
■  Mystery shopping exercises (e.g. 

■  European Commission 
■  Member States 

their creditworthiness was reached 

through EBA) 

■  Number of national competent authorities testing AI methods used for credit scoring 
■  Number of CPC cases related to widespread infringements of the Directive’s 

■  Member States expert group on the 

implementation of the CCD 

provisions on creditworthiness assessments 

SO4 Prevent specific individual or systemic situations from exacerbating consumer detriment 
■  Number/share of consumers that are over-indebted 
■  Number/share of consumers in arrears with loan repayments 
■  Share of financial/digital literate consumers in the EU 
■  Number/share of loans to which forbearance measures are applied. 
■  Number of debt advice services set up by Member States  
■  Number/share of consumers redirected to debt advice services at an early stage 
SO5 Reduce barriers for providers offering credit across borders while enabling more choice for consumers 
■  Number/share of consumer complaints on cross-border consumer credit offers and 

■  Enforcement authorities 
■  Stakeholder surveys/interviews  
■  Market studies 
■  Consumer and creditor surveys 

implementation of the CCD 

■  Member States expert group on the 

contracts 

■  Number/share of consumers that obtained credits in another Member State 
■  Market share of cross-border consumer credit 
■  Share of stakeholders that consider that there currently is a level playing field 
■  Number/share of consumers whose credit application is rejected on the basis of 

■  Enforcement authorities/CPC 
■  Stakeholder surveys/interviews  
■  Eurobarometer 
■  Market studies 
■  Consumer surveys 
■  Member States expert group on the 

■  European Commission 
■  Member States 

■  European Commission 
■  Member States 

consultation of a database 

implementation of the CCD 

SO6 Simplify the existing legal framework and reduce unnecessary burdens 
■  Share of stakeholders that consider there to be scope for simplification and burden 

reduction 

■  Number/share of consumer complaints on advertising 
■  Evidence of burden reduction linked to simplification of information disclosure 

requirements for advertisement through certain channels 

■  Market studies 
■  Stakeholder surveys/interviews  
■  Market studies 
■  Member States expert group on the 

implementation of the CCD 

■  European Commission 
■  Member States 

70 

 
 
 
 
ANNEXES 

Annex 1: Procedural information 

LEAD DG, DECIDE PLANNING/CWP REFERENCES 

  LEAD DG: DG JUSTICE AND CONSUMERS 
  DeCIDE PLANNING: PLAN/2020/6978 
  CWP 2020 – ANNEX II (REFIT INITIATIVE NO. 42)199 

ORGANISATION AND TIMING 

The  impact  assessment  took  place  between  March  2020  and  December  2020  and  was 
announced  in  the  2020  Commission  Work  Programme  –  Annex  II  Refit  Initiatives.  It  was 
carried out by Unit E1 "Consumer Policy" of the Commission, DG Justice and Consumers.  

Representatives  from  the  Secretariat  General  (SG),  the  Legal  Service  (SJ),  DG  Justice  and 
Consumers  (JUST),  DG  Financial  Stability,  Financial  Services  and  Capital  Markets  Union 
(FISMA),  DG  Competition  (COMP),  DG  Communications  Networks,  Content  and 
Technology  (CNECT),  DG  Economic  and  Financial  Affairs  (ECFIN),  DG  Employment, 
Social Affairs & Inclusion (EMPL), DG Energy (ENER) and the Joint Research Centre (JRC) 
were appointed to the Interservice Steering Group. 

The  Interservice  Steering  Group  met  three  times  between  April  2020  and  December  2020. 
The first meeting was held on 6 April 2020, the second meeting on 16 October 2020 and the 
third meeting on 15 December 2020. 

EXCEPTIONS TO THE BETTER REGULATION GUIDELINES 

The Better Regulation Guidelines and Tools were followed without any exception. 

CONSULTATION OF THE RSB 

An upstream meeting was held with the Regulatory Scrutiny Board (RSB) on 17 July 2020, 
to  informally  discuss  questions  concerning  how  to  prepare  the  best  possible  report  for  the 
Directive’s  revision.  The  draft  of  the  impact  assessment  was  submitted  to  the  RSB  on  6 
January  2021  and  discussed  at  the  RSB  hearing  of  3  February  2021.  The  RSB  delivered  a 
negative opinion on  5 February 2021. Following this development,  a revised version of the 
draft impact assessment was resubmitted to the RSB on 26 March 2021. The RSB delivered a 
positive opinion with reservations on 23 April 2021. The comments formulated by the Board 
were addressed and integrated in the final version of the impact assessment, stemming both 
from the first and second opinion of the RSB. 

1st RSB opinion: 

  The Draft Impact Assessment was redrafted to better illustrate the expected evolution of 
the  consumer  credit  market  and  why  the  EU  should  create  a  harmonised  market  for 
consumer credit while ensuring a protective framework for consumers.  

199https://eur-lex.europa.eu/resource.html?uri=cellar%3Af1ebd6bf-a0d3-11ea-9d2d-
01aa75ed71a1.0006.02/DOC_2&format=PDF  

71 

 
 
                                                           
  Some parts of the problem definition were shortened, but risks associated with new types 
of credit and their cross-border potential are described with more granularity. New figures 
from recently published materials were added to substantiate the problems. 

  The  Draft  Impact  Assessment  was  redrafted  to  better  demonstrate  that  while  the 
conclusion  of  direct  cross-border  credit  agreements  is  still  low,  this  situation  could 
change fast. Digitalisation is constantly changing the market and new market players are 
expected to change the consumer lending market. In this light, the subsidiarity argument 
was strengthened.  

  The  Draft  Impact  Assessment  was  revised  to  better  explain  the  fact  that  a  thorough 

examination of the possible legal basis has been conducted.    

  The  possibility  to  (partially)  repeal  the  Directive  has  been  added  and  there  is  an 

elaboration on why it should be discarded. 

  The differing views of stakeholders are now more clearly presented. 
  The description of the options in the main text has been enriched. 
  The benefit estimates have been reviewed, based on the supporting study which has been 
revised  by  the  contractor.  The  updated  (partial)  quantification  analysis  shows  that  there 
are only two measures  with  negative net  benefit. The measure on improving definitions 
and terms of the Directive (but as explained in the Draft Impact Assessment, the model 
does not take into account benefits in terms of enhanced level playing field for industry 
thanks  to  further  harmonisation);  and  the  measure  on  ‘early  detection’  (with  a  slightly 
negative  net  benefit).  A  case  study  based  on  simplified  hypothesis,  has  been  added  to 
complement  the  quantification  analysis  and  illustrate  the  benefits  stemming  from 
improved creditworthiness assessment. 

  The  comparison  of  the  options  looks  at  the  three  criteria  considered:  effectiveness, 

 

efficiency and coherence.  
In order to better reflect the costs of the different measures, a multi-criteria analysis has 
been  performed  for  the  efficiency  analysis  rather  than  for  effectiveness,  coherence  and 
efficiency. In addition, the impacts considered in the multi-criteria analysis have been re-
arranged to have a balanced approach between benefits and costs, and performance scores 
have  been  adapted.  The  analysis  also  balances  the  weights  of  costs  and  benefits  (50% 
each). 

  The preferred option (Section 8) has been adjusted to reflect the revised analysis, it now 
includes  the  measures  on  simplification  of  information  and  on  the  ban  of  unsolicited 
credit.  Although  a  comprehensive  quantitative  analysis  on  it  could  not  be  performed  in 
the  support  study,  the  measure  on  debt  advice  services  remains  part  of  the  preferred 
option, because other evidence shows its high cost effectiveness.  By contrast, the ‘early 
detection’  measure,  showing  a  negative  net  benefit  in  the  partial  quantification,  was 
removed. The proposal will be restricted to elements for which EU action is needed. For 
instance, the scope has been extended, but taking into account subsidiarity considerations, 
not to loans above EUR 75 000 or to pawnshop agreements. 

  The  report  was  revised  to  better  present  the  potential  for  simplification  of  the  proposed 
initiative,  elaborating  on  reduced  burden  for  businesses  and  public  administration  and 
including cost estimates where possible. 

2nd RSB opinion: 

72 

 
 
 
  The  report  was  reinforced  to  even  better  demonstrate  the  necessity  for  EU  action, 
showing that national legislation cannot sufficiently protect consumers when the number 
and  type  of  cross-border  providers  of  consumer  credit  is  increasing  or  is  likely  to 
increase, especially in view of digitalisation and recent market trends. 

  The methodology was revised to take into account the Board’s comments, following the 
first opinion. In particular, the assumed increase in the effectiveness attributed to certain 
measures  was  updated  based  on  expert  judgment.  Following  the  second  opinion,  the 
report now better highlights  the reasonable justification of the  assumed  effectiveness  of 
individual measures in annex 9. 

  The report now better illustrates the composition of the preferred option and highlights its 
proportionate  character.  The  measures  added  from  other  options  that  compose  the 
preferred option act complementarily and have a very beneficial impact overall. 

  The non-extension of the scope of the Directive to pawnshops and to the removal of the 
upper threshold is better explained in the subsidiarity section and also in the beginning of 
the preferred option. 

  Annex 1 now indicates how the comments  and recommendations from the Board’s first 

and second opinions have been taken into account. 

EVIDENCE & EXTERNAL EXPERTISE 

For  the  purpose  of  this  impact  assessment,  Commission  services  collected  data  through 
various sources and consultation strands. 

The  impact  assessment  relies  and  builds  on  the  Evaluation  of  the  Directive,  which  took 
place  in  2018-2019  and  was  announced  in  the  2019  Commission  Work  Programme,  also 
following  the  commitment  made  in  the  2017  REFIT  Platform  Opinion  on  Article  4  of  the 
Directive. To this end, the Commission published an Evaluation Staff Working Document, an 
Executive Summary of the Evaluation,  as  well as a Report to  the European Parliament  and 
the Council on the implementation of the Directive. The Evaluation of the Directive received 
a  positive  opinion  from  the  RSB.200  The  Commission  previously  outsourced  to  an  external 
contractor  a  study  supporting  the  Evaluation  of  the  Directive,  whose  final  report  is  also 
published.201 

In  2020,  the  Commission  outsourced  a  new  support  study  to  provide  sound  evidence  and 
analysis for preparing this impact assessment for potential EU action to revise the Directive, 
of both quantitative and qualitative nature.  

The Commission published the Inception Impact Assessment of the Directive and received 
public feedback on it from 23 June 2020 to 1 September 2020. 

The Commission also based the impact  assessment on the evidence gathered from the  New 
Consumer  Agenda  Public  Consultation,  which  included  a  section  on  the  review  of  the 
Consumer Credit Directive, and was held from 30 June 2020 to 6 October 2020. 

200 The results of the Evaluation, including the  Opinion delivered from the  RSB, were published in the Better 
Regulation  website  of 
the  Commission,  see  https://ec.europa.eu/info/law/better-regulation/have-your-
say/initiatives/1844-Evaluation-of-the-Consumer-Credit-Directive.  
201 
payments/retail-financial-services/credit/consumer-credit_en  

https://ec.europa.eu/info/business-economy-euro/banking-and-finance/consumer-finance-and-

73 

 
 
                                                           
Two  participatory  workshops  were  organised  with  external  stakeholders  from  both  the 
consumer side and the industry side (in September 2020 and November 2020), to verify and 
validate  impact  assessment  aspects  and  gather  specific  feedback  on  the  problem  definition 
and the assessment of policy options, i.e. in terms of expected effectiveness and efficiency. 

The  Commission  consulted  twice  its  dedicated  Member  State  Expert  Group  on  the 
Implementation  of  the  Consumer  Credit  Directive  (in  May  2020  and  December  2020). 
The first meeting was targeted to discuss the measures taken at national level in the area of 
consumer credit to face the COVID-19 crisis, considering preliminary lessons learnt from the 
crisis  and  discussing  how  to  integrate  them  in  the  Directive’s  review.  The  second  meeting 
discussed more broadly the impact assessment for the potential revision of the Directive. 

A  stakeholder  dialogue  was  organised  by  the  European  Commission,  in  light  of  the 
COVID-19 pandemic, to discuss inter alia credit payment moratorium measures. Two virtual 
roundtable meetings took place in May and June 2020, whose outcome was the adoption of a 
set of Best practices in relation to relief measures offered to consumers and businesses in 
the context of the COVID-19 crisis. 

The Commission consulted the Financial Services User Group (FSUG) on the Directive’s 
review,  also  holding  in  November  2020  a  dedicated  presentation  regarding  the  Directive’s 
impact assessment, enabling members of the FSUG to provide feedback on the Options. 

The issue of financing the clean energy transition through consumer credit, and specifically 
credits for energy efficient renovation of buildings, were discussed at the  Citizens’ Energy 
Forum 2020, through a dedicated panel on the topic. 

74 

 
 
 
Annex 2. Stakeholder consultation – Synopsis report 

INTRODUCTION & CONSULTATION STRATEGY  

The  stakeholder  consultation  collected  information  and  feedback  on  various  aspects  of  the 
Consumer  Credit  Directive  (‘CCD’)  and  the  consumer  credit  market  from  a  wide  range  of 
key stakeholders representing consumers, industry, national authorities, researchers and other 
relevant interest groups. It included four online surveys and three short questionnaires, semi-
structured interviews, the analysis of the responses to the questions related to the CCD in a 
Commission-run public consultation on the Consumer Agenda and two workshops organised 
by the contractor ICF at different stages of the study, for which the first covered the problem 
definition and the second aimed to validate the policy options. It also included the analysis of 
the  feedback  to  the  Commission’s  Inception  Impact  Assessment  (IIA)  as  well  as  ad  hoc 
contributions from stakeholders provided through other channels and consultation tools. 

The aim of the stakeholder consultation was to gather feedback and information (qualitative 
and  quantitative)  from  key  stakeholders  to  support  the  definition  of  the  key  trends  in  the 
consumer  credit  market  and  problems  faced  by  stakeholders  related  to  the  CCD.  It  also 
informed the development  and selection of the policy options, with  key stakeholders at  EU 
and national level providing feedback on the impact of policy measures adopted by Member 
States and the preliminary policy options and measures developed.  

CONSULTATION ACTIVITIES AND TOOLS 

The impact assessment relies extensively on the evidence findings of the external supporting 
study prepared by the contractor ICF (Study on possible impacts of a revision of the CCD) 
which  fed  into  the  analysis  of  the  Commission.  The  study  was  carried  out  under  close 
guidance  of  DG  JUST.  The  consultation  strategy  was  underpinned  by  a  number  of  key 
activities  using  multiple  tools  to  target  a  wide  range  of  stakeholders  through  different 
channels and gather insights from as many relevant stakeholders as possible.  

Several  scoping  interviews  with  representatives  from  relevant  EU  institutions,  i.e.  the 
Directorates  for  Justice  and  Consumers  (DG  JUST),  Economic  and  Financial  Affairs  (DG 
ECFIN)  and  Financial  Stability  and  Capital  Markets  (DG  FISMA)  as  well  as  several 
researchers from the Joint Research Centre (JRC) were conducted ahead of other consultation 
activities.  

The  surveys  and  interviews  aimed  at  gathering  views  from  the  various  key  stakeholder 
groups. The four online surveys ran between end of July and mid-September. They targeted 
EU  and  national  level  representatives  of  consumer  organisations,  credit  providers  / 
intermediaries  /  other  businesses  involved  in  the  marketing  of  consumer  credit,  business 
associations and national authorities. They sought to obtain data, supporting information and 
views on the recent and expected trends in the field of consumer credit, key problems faced 
by the various stakeholders, potential  solutions  to  the problems  and the  expected impact  of 
preliminary policy options and measures (including costs and benefits). 

In addition to the online surveys, three questionnaires were developed targeting Alternative 
Dispute  Resolution  (ADR)  bodies  and  members  of  the  European  Consumer  Centres  (ECC) 
and  the  Consumer  Protection  Centres  (CPC)  centres.  The  questionnaires  focused  on  key 

75 

 
 
issues  faced  by  consumers  and  credit  providers  and  the  enforcement  of  CCD  obligations. 
Feedback  from  ADR  bodies  was  collected  between  mid-August  and  mid-September.  ECC 
and CPC survey were distributed by the Commission in mid-August.  

A  validation  survey  was  also  developed  targeting  a  specific  group  of  stakeholders  to  gain 
feedback on the designed policy options. The validation survey ran from 11 November until 
18 November. A total of 76 stakeholders were invited to complete the survey. In addition to 
attendees and registered participants to the validation workshop (49 stakeholders), discussed 
below,  willing  stakeholders  who  completed  the  survey  in  August  or  participated  in  an 
interview (27 stakeholders) were also invited to contribute to the validation survey.  

Table 10 Stakeholder groups consulted (planned number in brackets) 

Stakeholder group 

Consultation method 

Survey/online 
questionnaires  

Interview 

Follow-up 
validation 
survey 

N/A 

8 (100) 

EU institutions 

Credit providers (including 5 non-
banks) 

Credit intermediaries (including 
online and P2PL platforms) 

Other business operators involved 
in the marketing and granting of 
consumer credit 

EU-level business associations 

23 (30) 

National business associations 

EU-level consumer organisations 

14 (30) 

National consumer organisations 

National authorities (i.e. consumer 
enforcement authorities, 
responsible ministries and the 
relevant national regulatory and 
supervisory authorities) 

32 (108) 

ADR bodies 

CPC members 

ECC members 

Researchers and thematic experts / 
academia 

10 (69) 

10 (29) 

6 (30) 

N/A 

4 (3) 

7 (10) 

0 (5)   

2 (5) 

2 (2) 

7 (10) 

3 (5) 

4 (10) 

5 (15) 

N/A 

N/A 

N/A 

1 (3)   

- 

1  

0  

1  

3 

6 

1 

2 

6 

- 

- 

- 

- 

Total 

103 (396) 

35 (68) 

20 

76 

 
 
Source: ICF assessment, impact assessment supporting study 

The responses to the questions relating to the CCD included in a public consultation on the 
New  Consumer  Agenda,  which  ran  from  June  to  October  2020,  were  also  analysed.  The 
consultation  received  a  total  of  393  responses,  and  250  respondents  answered  at  least  one 
question  in  the  CCD  review  section  (including  EU  and  non-EU  citizens,  business 
associations,  business  organisations/companies,  public  authorities,  consumer  organisations, 
NGOs,  academic  and  research  institutions,  and  others).  Table  3  presents  the  profile  of  the 
respondents (stakeholder group) who answered this section of the public consultation, and the 
percentage of responses received from each group.  

Table 11 Profile of respondents to the Consumer Credit Directive review section of the New 
Consumer Agenda public consultation  

Stakeholder group 

Citizens 

Business associations  

Companies / business organisations 

Public authorities 

Non-governemental organisations (NGO) 

Consumer organisations 

Other 

Academic / research institution 

Total 

Percentage of responses 

27% EU, 1% non-EU 

22% 

14% 

13% 

9% 

7% 

4% 

3% 

100% 

Source: Factual Summary Report – public consultation on the New Consumer Agenda 

Stakeholder feedback was received on the Inception Impact Assessment between June and 
September  2020,  following  the  Commission  Proposal  to  review  the  CCD  as  part  of  the 
REFIT Annex of the Commission Work Programme 2020. A total of 25 contributions were 
received, analysed and taken into account. Their input covered the assessment of the expected 
economic, environmental and social impacts of a potential EU action to revise the Consumer 
Credit Directive.  

A participatory workshop was organised by ICF in September 2020. It gathered a total of 
54 participants (20 active participants and 34 observers), mostly from EU-level organisations 
representing the interests of credit providers and intermediaries, consumers and other relevant 
businesses,  but  also  a  subject-matter  expert.  In  addition,  11  representatives  of  the 
Commission  joined  and  4  members  of  the  ICF  study  team.  The  workshop  covered  the  key 
issues affecting consumers and credit providers (and other business operators involved in the 
marketing and provision of consumer credit), structured around five main problems, each of 
them broken down in  sub-problems.  The workshop also  gauged stakeholders’ preference in 
terms  of policy solutions, ranging from  non-regulatory measures to  measures going beyond 
legislation.  

77 

 
 
A validation workshop was organised by ICF in November 2020. Invitations were extended 
to  the  participants  of  the  first  workshop,  complemented  by  further  national  level 
organisations.  It  gathered  participants  from  58  organisations  (21  active  participants  and  37 
observers), mostly from EU-level organisations representing the interests of credit providers 
and  intermediaries,  consumers  and  other  relevant  businesses.  The  Commission  was 
represented  by  7  participants  (2  active  and  5  observers);  4  members  of  the  ICF  study  team 
were also present. This second workshop built on the findings of the participatory workshop 
and  gathered  feedback  on  the  policy  options  designed  to  address  the  problems  that  were 
refined  based  on  feedback  from  the  participatory  workshop.  The  workshop  offered 
participants  a  chance  to  discuss  the  various  policy  options,  covering  aspects  such  as  their 
expected effectiveness  and efficiency in addressing the problems identified and the impacts 
that they are likely to have on key stakeholders, and to vote for their preferred measures.  In 
particular,  discussions  addressed  both  positive  and  negative  aspects  of  feasibility, 
effectiveness and EU added value of the policy options, as well as the benefits and risks or 
costs on both consumers and industry. Other impacts were also addressed.  

Ad-hoc  contributions  were  received  from  the  European  Commission  or  directly  from 
stakeholders. In addition, a few stakeholders provided their responses to the survey by email 
or  shared  their  answers  to  the  interview  questions  in  writing.  These  contributions  were  not 
treated differently but analysed together with the others. 

A  presentation  at  the  Financial  Services  User  Group  (FSUG)  was  held  on  19  November 
2020, enabling members to provide feedback on the Options. Specific views were shared (in 
writing) after the meeting. 

The  Commission  also  consulted  its  dedicated  Member  State  Expert  Group  on  the 
Implementation of the Consumer Credit Directive twice (May 2020 and December 2020). 
The first meeting was targeted to discuss the measures in the area of consumer credit taken at 
national  level  to  face the COVID-19 crisis,  and to consider preliminary lessons learnt from 
the  crisis  and  discuss  how  to  integrate  them  in  the  Directive’s  review.  The  second  meeting 
discussed more broadly the impact assessment for the potential revision of the Directive. 

A mini-sweep exercise on consumer credit took place in February/March 2021. Namely, a 
coordinated compliance  check of online advertising  and offers to  purchase consumer credit 
products  was  conducted  by  a  dedicated  group  of  Consumer  Protection  Cooperation  (CPC) 
authorities (members of the CPC network) (“Mini-sweep”) . The activity was steered by the 
Commission  pursuant  to  Article  29  of  the  Consumer  Protection  Cooperation  (CPC) 
Regulation. In line with the strategic priorities of the New Consumer Agenda, the exercise of 
the  CPC  network  has  aimed  to  monitor  and  prevent  proliferation  of  unfair  practices  in  the 
consumer credit sector. This is to ensure that consumers who have found themselves in need 
of  a  credit  in  the  midst  of  the  COVID-19  crisis  can  rely  on  national  public  enforcement 
authorities to protect them in national as well as cross-border context. The primary objective 
of  the  Mini-sweep  was  to  check  on  various  technical  devices  (PC,  tablets,  smartphones), 
whether  traders  comply  with  EU  consumer  rules  on  standard  information  in  online 
advertising  of  consumer  credit,  if  the  overall  presentation  of  the  consumer  credit  offers 

78 

 
 
cannot  mislead  consumers,  and  if  the  offers  do  not  aggressively  exploit  consumer 
vulnerabilities. 

Other  inputs  were  received  through  bilateral  meetings  with  stakeholders,  specific  ad-hoc 
reports and data from consumer associations, industry representatives and researchers. 

The evidence collection for the Staff Working Document is also based on the Commission’s 
experience in monitoring and implementing the Directive. 

EVIDENCE, SOURCES AND QUALITY 

Thorough desk research and legal analysis were conducted. 

The implementation of the stakeholder consultation encountered various challenges, some of 
which affected most consultation activities. The first obstacle observed relates to the impact 
of  the  COVID-19  pandemic.  The  uncertainty  of  the  period  generated  new  concerns  and  a 
shift  of  priorities  for  stakeholders.  The  low  level  of  participation  registered  can  also  be 
attributed to multiple stakeholder consultations running simultaneously and the often limited 
resources  to  address  these  queries.  The  high  level  of  responsiveness  of  industry 
representatives  in  the  public  consultation,  compared  to  a  low  participation  in  surveys  and 
interviews,  may  suggest  that  they  considered  their  contribution  to  the  public  consultation 
sufficient.  

The timing of the consultation also constituted an obstacle as it coincided with the summer 
period, when many stakeholders take their annual leave. Stakeholder fatigue may have also 
contributed  to  the  low  response  rate.  Most  stakeholders  had  been  already  contacted  in  the 
previous year to participate in the Evaluation of the CCD and some of them argued that they 
had no additional time or new views to share over such a limited period of time. 

MAIN STAKEHOLDER FEEDBACK PER CONSULTATION ACTIVITY 

Interviews 

The  analysis  of  the  interview  responses  shows  that  all  groups  of  stakeholders  have  similar 
views on the  market  trends  in  the field  of  consumer credit during 2015  – 2020. Among all 
stakeholder  groups  interviewed,  the  digitalisation  of  the  market  was  highlighted  as  the  key 
trend. Other recurring trends mentioned by stakeholders refer to the low level of cross-border 
provision  of  consumer  credit  (i.e.  consumer  credit  in  the  national  market  is  still  mostly 
provided by national banks, and the demand and supply for cross-border credit remains low) 
and the emergence of new types of credit and players. 

The  general  opinion  of  all  participants  is  that  there  are  other  market  trends  that  follow 
technological advances, such as new types of credit providers and the way consumers search 
for  and  access  credit.  Industry  representatives  and  consumer  organisations  agree  that  the 
technological  disruption.  The  majority  of  consumer 
CCD  did  not  anticipate 
organisations  highlight  the  negative  impact  on  consumer  protection  resulting  from,  for 
example, unregulated new entities and the overload of information. Industry representatives 
also  acknowledge the negative impact  on consumer protection, but  highlight  the challenges 
related  to  the  required  information  that  needs  to  be  provided,  which  imposes  unnecessary 
costs and fails to protect the consumer. Industry representatives involved in advertising and 

the 

79 

 
 
marketing  of  credit  called  for  a  revision  of  Article  4  of  the  CCD,  to  reduce  the  amount  of 
information that needs to be provided in advertisement, especially on radio.  

Stakeholders  generally  believe  that  it  is  too  early  to  predict  the  impact  of  the  COVID-19 
pandemic  and  subsequent  economic  downturn.  Nonetheless,  most  national  authorities  and 
consumer  organisations  interviewed  expect  it  to  lead  to  a  reduction  on  the  demand  of 
consumer credit, an opinion which is shared only by a minority of industry representatives. 
A few national authorities noted a decrease in credit supply due to imposed national measures 
in  response  to  the  pandemic,  such  as  decreased  interest  rates.  Reflecting  on  the  impact  on 
over-indebtedness,  a  majority  of  consumer  organisations  also  noted  an  increase  of  over-
indebtedness among consumers as a result of the pandemic. 

Regarding the cross-border provision of credit, a great majority of consumer organisations 
support a fully harmonised framework at  EU level  to  ensure a level-playing field  for credit 
providers  and  intermediaries  and  ensure  the  same  level  of  protection  of  all  EU  citizens. 
Harmonisation would be beneficial with regard to creditworthiness assessments, regulations 
regarding access to databases and information requirements to avoid legal uncertainty. This 
industry 
is  shared  by  a  majority  of  national  authorities  and  national 
opinion 
representatives, although a few of national industry representatives disagreed and do not see 
the need to revise the CCD.  

When  asked  about  the  reasons  explaining  the  small  share  of  the  cross-border  market  for 
consumer  credit,  all  stakeholder  groups  highlight  language  or  cultural  factors  as  the  main 
barriers preventing consumers to access credit cross-border. A majority of national consumer 
organisations  put  forward  the  low  demand  of  cross-border  credit  from  the  consumer  side. 
Industry representatives argue that supply is low due to the difficulty of credit providers to 
assess  the  creditworthiness  of  consumers  resident  in  another  country,  the  lack  of  specific 
skills  and incentives  to operate cross-border due to  a low demand and the legal  complexity 
inducing high costs (i.e. need legal experts). A majority of national authorities recognises 
the  need  to  harmonise  the  rules  to  conduct  a  creditworthiness  assessment  and  define  clear 
guidelines  in  order  to  support  the  development  of  the  cross-border  market  and  tackle  over-
indebtedness. This was echoed by a majority of consumer organisations. However, national 
authorities  also  caution  for  over-prescriptive  rules,  which  impose  costs  on  credit  providers 
and might lead to consumer discrimination. 

Online surveys 

The  digitalisation  of  the  consumer  credit  market  and  the  prevalence  of  national  credit 
providers in the national market are the main market trends observed in the past years across 
all stakeholder groups. A majority of industry representatives and public authorities also 
indicated that consumer credit in the national market is mostly provided by banks, as opposed 
to other non-bank credit providers. While the emergence/growth of new credit providers was 
highlighted  by  many 
representatives,  national  authorities  and  consumer 
organisations. 

industry 

On future market trends expected for 2025-2030, respondents mainly indicated a continuation 
of  the  main  trends  observed  in  the  past  few  years.  Overall,  all  respondents  commonly 

80 

 
 
considered  that  technological  advances  will  further  change  the  way  in  which  consumers 
search  for  and  access  consumer  credit.  The  emergence  or  growth  of  new  types  of  credit 
providers/ intermediaries is expected by the majority of public authorities and consumer 
organisations, contrasting with the industry’s view. 

There  is  a  high  level  of  consensus  among  stakeholders  that  the  demand  for  cross-border 
consumer  credit  has  not  increased  in  their  country  since  2015,  with  language  and  cultural 
barriers  playing  an  important  role.  While  all  groups  of  stakeholders  also  argued  that 
consumers’  lack  of  knowledge  of  the  legal  framework  or  a  lack  of  confidence  in  redress 
mechanisms  in  other  countries  is  an  important  obstacle  in  the  cross-border  provision  of 
consumer credit. 

A  majority  of  all  groups  of  stakeholders  reported  that  their  country  has  adopted  rules  at 
national  level  on  not  harmonised  aspects  by  the  CCD.  The  most  common  measures  were 
interest rate or APR caps, the extension of the scope to other types of credit, and stricter rules 
concerning  the  process  to  perform  creditworthiness  assessments  (CWAs)  or  the  data  to  be 
used for the CWA. 

On problems faced by credit providers, industry representatives agree that the requirements 
of information to be provided both at the advertising and at pre-contractual stage are the most 
challenging aspects.  In addition,  different  regulatory  approaches  adopted  by  countries seem 
to  undermine  the  level-playing  field  amongst  credit  providers  in  the  view  of  industry 
representatives and national authorities. 

When  it  comes  to  problems  faced  by  consumers,  national  authorities  and  consumer 
organisations generally argued that vulnerable consumers do not have the tools that would 
allow  them  to  improve  their  financial  situation  and  that  that  the  information  provided  to 
consumers  in  advertising  does  not  allow  consumers  to  properly  read  and  process  the  key 
information.  While  problems  with  the  provision  of  information  at  pre-contractual  stage  are 
indicated by national authorities and consumer organisations. 

On the impact of different policy options on consumers, a possible amendment of the CCD to 
simplify  the  rules  on  pre-contractual  information  and  legislative  measures  on  debt  advice 
services  are  believed  to  be  the  most  beneficial  for  consumers,  according  to  consumer 
organisations  and  national  authorities.  Respondents  further  elaborating  their  answer 
indicated that information  requirements imposed by the CCD should be revised to  ensure a 
balance  between  ensuring  that  consumers  have  all  information  and  that  they  are  able  to 
understand  all  information  provided,  avoiding  information  overload.  It  is  suggested  by 
national authorities and consumer organisations that there is potential for very positive impact 
for consumers if the effectiveness of the disclosure of information is improved  – while also 
considering the digital environment. When assessing the impact of potential policy options on 
credit  providers,  the  simplification  of  rules  on  pre-contractual  information  and  the  non-
regulatory  measures  to  promote  responsible  lending  are  believed  to  be  the  preferred  policy 
options as credit providers would eventually benefit from lower default rates. 

Consumer organisations and national authorities tend to agree that legislative measures on 
debt  advice  services  and  amending  the  CCD  to  establish  the  obligation  to  provide  debt 

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assistance  for  over-indebted  or  otherwise  vulnerable  consumers  would  positively  affect  the 
level of over-indebtedness. Overall, stakeholders reported that the overall level of compliance 
among credit providers and intermediaries would remain the same irrespective of the policy 
option  chosen.  However,  an  important  number  of  national  authorities  and  business 
associations  pointed  to  an  increased  level  of  compliance  among  credit  providers  in  their 
Member  State  following  the  implementation  of  a  simplification  of  rules  on  pre-contractual 
information  and  the  adoption  of  measures  related  to  the  content  and  access  to  credit 
databases. 

Additional questionnaires (CPC and ECC networks, ADR bodies)  

The analysis of the ECC survey reveals that the main issues that consumers face when trying 
to  access/obtain consumer  credit  cross-border relate to  i) geographical  restrictions imposed 
by  credit  providers;  ii)  lack  of  awareness  about  the  possibility  to  obtain  credit  in  other 
Member States; iii) fear of fraud or crimes; iv) lack of sufficient (online) information about 
credits in other Member States. Most stakeholders indicated that these issues are the result of 
the  functioning  of  the  market.  Moreover,  a  group  of  stakeholders  also  identified  the 
regulatory framework as a cause of the above-mentioned issues. Another group believed that 
these issues are also the result of external factors, namely the lack of knowledge, awareness 
and confidence of consumers in cross-border financial service providers. 

Responses  to  the  CPC  survey  show  that  the  overall  level  of  compliance  with  the  CCD  is 
considered to be high by a majority of respondents. Half of all respondents indicated that the 
level of compliance with other national rules is high. A large majority of respondents argued 
that  there  are  several  areas  and/or  specific  obligation  which  are  problematic  in  terms  of 
compliance.  A  majority  of  them  pointed  to  other  issues  strictly  related  to  advertising,  pre-
contractual  information,  creditworthiness  assessment  and  cross-selling.  Some  respondents 
reported  that  many  credit  providers  and  intermediaries  do  not  comply  with  advertising 
requirements  given  the  lack  of  information,  the  provision  of  misleading  information,  the 
absence  of  representative  examples  or  misleading  examples.  As  regards  pre-contractual 
information,  a few indicated that the SECCI form  is  problematic. A larger  group found the 
creditworthiness  assessment  problematic  as  well.  They  highlighted  the  insufficient  control 
over the information provided by the consumers, the increasing automation of the decision, 
the limited number of questions for a thorough creditworthiness assessment and the fact that a 
credit is often nevertheless granted, despite the debt to income ratio is negative. The overall 
view of respondents is that the three main issues brought up in enforcement decisions against 
national  entities  involve  the  information  included  in  advertising,  the  creditworthiness 
assessment and the calculation of the annual percentage rate of charge. 

ADR  bodies  participating  in  the  survey  did  not  refer  to  cross-border  cases,  but  only  to 
national ones. Most ADR bodies indicated that common issues on the provision of consumer 
credit found in their country relate to i) consumers’ inability to pay back; ii) the provision of 
information to consumers at pre-contractual stage; iii) right of withdrawal; iv) right of early 
repayment. 

Inception Impact Assessment (IIA) 

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Stakeholders’ feedback on the IIA also pointed to the digitalisation of the market as the main 
trend.  According  to  the  contributions  received,  the  overload  of  information  available  to 
consumers due to technological advances and the requirements for providing pre-contractual 
information  for  credit  providers  has  led  to  a  decreased  level  of  consumer  protection.  Other 
market  trends  mentioned  by  respondents  included:  i)  the  emergence  of  new  types  of  credit 
products  and  credit  providers  not  covered  by  the  CCD,  ii)  the  availability  of  big  data, 
including  from  alternative  sources  and  iii)  changing  consumer  behaviour  in  the  way 
consumers search for and access credit.  

Generally,  respondents  across  all  stakeholder  groups  and  EU  Member  States  agree  that 
information  provided  to  consumers  in  the  advertisement  stage  and  at  pre-contractual  level 
needs  to  be  reduced,  simplified  and  reflect  the  growing  use  of  digital  devices  as  it  fails  to 
achieve its objective to protect the consumer.  

As  opposed  to  other  stakeholder  groups,  a  majority  of  industry  representatives  expressed 
views  against  or  not  in  favour  of  more  prescriptive  rules  defining  the  creditworthiness 
assessment.  Further  standardisation  of  the  assessment  would  increase  credit  provider 
detriment  and  consumer  discrimination  according  to  the  respondents.  A  few  industry 
representatives  expressed  their  appreciation  for  stricter  measures  and  an  EU  framework  to 
support  creditworthiness  assessments  and  increase  efficiency  and  effectiveness.  Reference 
was made to the guidelines of the European Banking Authority to inspire new measures. In 
general,  consumer  organisations  and  national  authorities  are  in  favour  to  put  in  place 
specified  criteria.  Almost  half  of  consumer  organisations  explicitly  argued  in  favour  of 
specific criteria and the inclusion of additional measures, such as sanctions for creditors not 
adhering  to  the  rules  and  specific  consequences  for  negative  creditworthiness  assessment 
outcomes. 

A  majority  of  national  authorities  and  a  few  consumer  organisations  advocated  for  the 
adoption of policy measures to anticipate unforeseen market disruptions, such as those caused 
by  the  COVID-19  pandemic.  Half  of  the  industry  representatives  argued,  however,  that 
self-regulatory mechanisms are more effective than prescriptive regulations trying to account 
for exceptional circumstances. 

While  all  national  authorities  and  a  great  majority  of  consumer  organisations  expressed 
appreciation of the idea of extending the scope of the CCD to include harmful credit products 
and new credit providers, industry representatives’ opinion diverged. Half of them agree to 
revise the scope and include either all types of credit or credit providers, while a minority are 
not in favour to extend the scope. Generally, they call for proportionality and to consider the 
cost-benefits  of  such  measures.  A  Member  State  also  flagged  the  effectiveness  of  national 
measures  addressing  revolving  credit  to  reduce  over-indebtedness  linked  to  it,  and  stressed 
existing issues with ‘buy now pay later’ free interest rate credits. 

Participative workshop 

Discussions  on  the  key  problems  in  the  field  of  consumer  credit  revealed  that  most 
participants agree that the scope of the CCD appears to be insufficient in addressing all risks 
identified. Some stakeholders both from the  consumer and industry side also  expressed 

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concerns  about  the  potential  detrimental  effects  of  the  COVID-19  crisis  and  about  the 
increasing  risks  of  cross-selling  practices  observed.  Stakeholders  that  commented  on  the 
cross-border  market  for  consumer  credit,  also  both  from  the  consumer  and  industry  side, 
agree  that  there  are  still  several  barriers  that  need  to  be  tackled  such  as  fragmented 
legislation, access to databases or a low level of demand. 

In  terms  of  possible  policy  solutions,  the  majority  of  stakeholders  who  intervened  (from 
business associations and consumer organisations) indicated that they welcome a higher level 
of  harmonisation  in  the  way  CWAs  are  conducted  and  stronger  safeguards  to  ensure 
responsible  lending  across  EU.  On  the  contrary,  some  representatives  of  the  industry 
warned about the risk of over-regulation. Several industry stakeholders raised concerns about 
the risk of creating an information overload for consumers if new information requirements 
are  to  be  implemented.  Finally,  a  great  majority  of  stakeholders  have  expressed  their 
preference  for  targeted  legislative  action  (business  associations),  among  which  many  have 
indicated  a  mix  of  different  forms  of  extensive  legislation  action  (majority  of  consumer 
organisations). 

Validation workshop  

Discussions  on  the  policy  options  and  their  expected  effectiveness  and  efficiency  in 
addressing  the  problems  identified  and  the  impacts  revealed  that  in  general  business 
associations and credit providers are in favour of either maintaining the status quo (policy 
option 0) or non-regulatory action (policy option 1) as it offers stability to the sector, which 
has  already  greatly  been  affected  by  the  impacts  of  COVID-19,  and  was  considered  to 
effectively address the problems identified without imposing high costs on the industry.  To 
the contrary, consumer organisations expressed to be in favour of extensive amendment to 
include provisions not addressed by EU regulation (policy option 3b) and even suggested to 
go beyond the  proposed measures. Non-binding  measures  would not  ensure a high level  of 
consumer  protection  or  effectively  address  the  over-indebtedness  and  detrimental  lending 
practices.  EU and national authorities acknowledged the arguments and concerns of both 
stakeholder  groups. A few industry representatives also  referred to  the recently published 
European Banking Authority (EBA) Guidelines that have introduced new measures and will 
already impose costs on the industry.  

In  terms  of  feasibility,  for  obvious  reasons,  non-regulatory  measures  would  be  easily 
implemented  (policy  option  1),  while  extensive  amendment  to  include  provisions  not 
addressed by EU regulation would most likely receive resistance from the industry because of 
the additional costs imposed (policy option 3b). Extensive amendment of the CCD to include 
new  provisions,  in  line  with  EU  regulation  (policy  option  3a)  would  potentially  encounter 
burdens  in  terms  of  feasibility  risking  an  overlap  with  data  protection  regulation  across 
member states. 

In terms of effectiveness, stakeholders both from the consumer and industry side agreed that 
non-regulatory action will not achieve further harmonisation regarding, for example, the right 
of  early  repayment  and  withdrawal  or  the  creditworthiness  assessment.  Including  certain 
obligations  on  the  information  to  consider  during  the  creditworthiness  assessments  was  not 
considered to be effectiveness in tackling consumer detriment and over-indebtedness.  

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Regarding  EU  added  value,  stakeholders  (credit  providers,  business  associations  and 
consumer organisations) agreed extensive amendment of the CCD (policy option 3a and 3b) 
would  contribute  to  the  creation  of  a  level-playing  field  for  the  industry  and  ensure  same 
level  of  protection  for  consumers  across  the  EU.  A  level-playing  field  would  help  reduce 
legal  uncertainty  and  boost  the  development  of  a  cross-border  market  offering  benefits  for 
both consumers and the industry. 

In terms of impacts on consumers and credit providers, discussions confirmed that the more 
extensive the revision of the CCD, the more costs will be imposed on the  industry, except 
with  regard  to  amendments  related  to  information  requirements,  which  would  lead  to  cost 
reduction.  Extensive  revision  was  considered  to  have  a  beneficial  impact  on  consumers  as 
expressed  by  the  majority  of  consumer  organisations.  However,  this  does  apply  to  the 
creditworthiness  assessment.  While  consumer  organisations  argue  in  favour  of  stricter 
criteria,  they  also  recognise  the  potential  negative  impacts  on  both  consumers,  such  as 
consumer discrimination, and the industry, such as high administrative burdens. 

Follow-up survey 

Results of the follow-up survey revealed diverging views on preferred policy options between 
consumer  organisations  and  business  associations  and  credit  providers.  While  consumer 
associations  are  in  favour  of  extensive  revision  of  the  CCD  (policy  options  3a  &  b),  the 
industry  prefers  non-regulatory  action  (policy  option  1).  However,  stakeholders  agreed  on 
the  need  for  amendment  of  the  information-related  requirements  (policy  option  2). 
Stakeholders  who  provided  answers  to  the  open-ended  questions  indicated  that  amendment 
would  be  favourable  to  simplify  and  reduce  the  amount  of  information  that  needs  to  be 
provided at pre-contractual stage, as well as with regard to the provision of information in the 
marketing  of  credit.  Multiple  stakeholders,  including  national  authorities  and  business 
associations acknowledged the limitations related to policy option 1 in achieving regulatory 
harmonisation across EU member states. They appreciate the comprehensiveness of extensive 
revision  of  the  CCD  ensuring  a  high  level  of  consumer  protection  (policy  option  3a  &  b), 
while  recognising  the  need  to  leave  enough  space  for  the  implementation  at  national  level. 
Nevertheless, the industry argues in favour of proportionality and the need to select relevant 
measures to adequately tackle the problems identified.  

In  terms  of  feasibility,  national  authorities  and  consumer  organisations  cautioned 
limitations  related  to  policy  option  1  in  achieving  regulatory  harmonisation  across  EU 
member  states.  This  could  create  legal  uncertainty  and  curb  the  development  of  a  cross-
border  credit  market.  A  minority  of  business  associations  echoed  the  concern  and 
highlighted  the  risk  of  unequal  access  to  databases  across  member  states  resulting  from 
regulatory  fragmentation.  The  majority  of  business  associations,  as  well  as  credit 
providers, highlighted feasibility issues with extensive review of the CCD (policy option 3a 
&  b).  A  few  stakeholders  cautioned  for  aligning  provisions  in  the  CCD  with  the  MCD 
without thorough analysis, proposed in policy option 3a. Finally, the industry also expressed 
resistance regarding the provision in policy option 3b to introduce APR caps. 

In  terms  of  effectiveness,  non-binding  measures  would  fail  to  achieve  regulatory 
harmonisation  across  member  states,  according  to  all  stakeholders  who  provided  feedback. 

85 

 
 
This would result in legal uncertainty regarding the creditworthiness assessment, the issuance 
of  credit  and  responsible  lending.  As  opposed  to  consumer  organisations,  business 
associations  consider  policy  option  2  to  be  effective  in  tackling  the  problems  identified  in 
particular with regard to creating a level-playing field for the industry and ensuring consumer 
protection. Consumer organisations and national authorities indicate that policy option 3b 
would  be  most  effective  to  ensure  sufficient  level  of  consumer  protection,  including 
vulnerable consumers who are more likely targeted by harmful products. 

In terms of potential impacts on consumers, analysis of the survey revealed positive to very 
positive impacts on consumers for policy options 3a and b, according to national authorities 
and consumer organisations. The results also show that the majority of national authorities 
indicates the positive impact of extensive revision on the industry. This contrasts with views 
of the industry. Business associations and credit providers highlight the negative impacts of 
extensive revision of the CCD imposing additional costs on the industry. Only the provision 
to reduce the amount of required information in advertisement and marketing was considered 
to have a positive impact on the industry. 

CCD-related questions from the public consultation on the New Consumer Agenda 

The  public  consultation  questionnaire  focused  on  the  exploration  of  possible  solutions  to 
different issues identified. Responses to the public consultation showed that most stakeholder 
groups agree on the extension of the scope of the CCD, particularly to cover loans obtained 
via peer-to-peer lending and credits below EUR 200. Although this contrasts with the view of 
business  associations,  indicating  that  no  scope  extension  is  needed.  In  this  regard,  it  was 
suggested  that  the  extension  of  the  scope  of  the  CCD  i)  should  be  left  to  Member  States 
considering differences in national markets; ii) and that better application of the existing rules 
would  be  more  proportionate  to  the  actual  risk.  While  consumer  organisations  and  citizens 
also argued to include all currently exempted credits. 

The  provision  of  information  at  pre-contractual  stage  is  expected  to  be  improved  by 
simplifying  information  and  focusing  only  on  key  features  of  the  offer.  The  use  of 
comparison  tables  is  also  commonly  suggested,  especially  amongst  consumer  organisations 
and  academic  institutions.  Views  across  stakeholder  groups  differ  when  it  comes  to  the 
moment to provide pre-contractual information. While industry representatives prefer right 
before  signing  the  contract,  the  rest  stakeholder  groups  argued  that  pre-contractual 
information should be provided with a longer notice (one day or even five days in advance). 

On the provision of information at the advertising stage, consumer organisations, national 
authorities  and  citizens  supported  the  introduction  of  warning  messages  and  that  the 
information  should  be  given  particular  prominence.  While  the  reduction  of  information 
provided in all communication channels was mostly suggested by business associations and 
companies. 

Respondents generally indicated that rules on responsible lending could be further improved 
by i) prohibiting the provision of credit in  case of negative creditworthiness  assessment;  ii) 
introducing  caps  on  interest  rates;  iii)  preventing  online  credit  purchasing  without  enough 
time  for  reflection;  iv)  introducing  binding  principles;  v)  and  by  banning  unsolicited  credit 

86 

 
 
offers. However,  a  significant group of business associations and companies argued that 
no further measures are needed. It is observed that while industry representatives call for non-
standardisation  and  higher  flexibility,  authorities  and  consumer  organisations  support 
further harmonisation of rules.  

Views on the need of additional EU rules on access to credit databases are divided between 
stakeholder  groups.  On  the  one  hand,  business  associations  and  companies  commonly 
agreed that EU rules should not be changed neither for CWA nor for credit databases as the 
current  principles-based  approach  provides  a  sound  basis  for  responsible  lending.  On  the 
other hand, the other stakeholder groups generally indicated that EU law should provide for 
common standards both on data/methodology for CWA and categories of data collected for 
CWA purposes. 

On  standards  and  methodology  that  should  be  used,  respondents  further  suggested  i)  a 
common  European  database;  ii)  a  minimum  (mandatory)  set  of  information  to  determine 
CWA for all credit products; iii) limitation of the use of data to  avoid  intrusive assessment 
(e.g.  social  media  and  online  shopping  data).  As  to  categories  of  data  that  should  be  used, 
stakeholders generally referred to negative, positive, and historic credit data. In addition, they 
indicated to study best national practices. 

Two groups of stakeholders can be distinguished when it comes to their opinion on possible 
measures to safeguard the interests of both lenders and borrowers in situations of exceptional 
economic disruption (e.g. COVID-19 pandemic). Industry representatives believed that no 
action at EU level is needed and/or that flexibility embedded in the prudential framework for 
banks  could  be  used  to  facilitate  lending.  It  was  reported  by  a  group  of  industry 
representatives  that  extra  measures  are  not  necessary,  given  national  responses  and  the 
Commission’s  Best  Practices,  which  captures  the  measures  adopted  to  protect  consumers. 
While  the  rest  (consumer  organisations,  national  authorities,  citizens,  NGOs,  research 
institutions)  generally  supported  i)  the  implementation  of  specific  rules  allowing  Member 
States to enact payment moratoria measures; ii) the adoption by Member States of measures 
encouraging  creditors  to  exercise  reasonable  forbearance  when  a  borrower  is  in  financial 
difficulty; iii) new measures to strengthen services to support over-indebted consumers. 

Member State Expert Group on the Implementation of the Consumer Credit Directive  

Feedback  from  national  authorities  was  also  gathered  through  the  Directive’s  dedicated 
Member  State  expert  group.  Member  States  generally  welcomed  the  review  approach  and 
generally  seemed  to  favour  a  comprehensive  amendment  of  the  Directive,  to  address 
problems in terms of scope, information to consumers and creditworthiness assessment, but 
also  to  tackle  other  problems  such  as  practices  by  credit  providers  exploiting  consumer’s 
situation and patterns of behaviour, especially in the digital context. 

Citizens’ Energy Forum 2020 

The  2020  Citizens’  Energy  Forum  had  a  dedicated  panel  on  how  to  empower  citizens  to 
finance their transition to clean energy. The Forum acknowledged the importance of enabling 
consumers  to  finance  sustainable  projects,  in  particular  through  consumer  credit.  It  also 
stressed that since substantial  investment  is  needed to  achieve climate neutrality in  Europe, 

87 

 
 
green  loans  can  contribute  to  it  while  directly  benefitting  consumers,  including  vulnerable 
ones, thus enabling to finance sustainable consumption. 

Mini-sweep exercise on consumer credit (2021) 

13 Member States and 2 EEA countries participated in the exercise and 118 websites were 
swept  in  total.  A  cross-border  element  was  confirmed  in  32  out  of  118  cases  (27  %)  of 
traders, in  10 cases  traders offering credit were  established in  another Member State.  In 22 
instances, the trader was established in at least two Member States.  

Regarding  information  in  advertisement,  it  appeared  that  online  lenders  often  omit 
important  information,  such  as  the  credit  cost  in  the  advertising  of  consumer  credit,  which 
can  mislead  consumers.  In  35  cases  out  of  118  (30%),  the  advertising  of  consumer  credit, 
which indicates an interest rate or any figures relating to the cost of credit, did not include all 
the  standard  information  by  means  of  a  representative  example  in  a  clear,  concise  and 
prominent way as required by the Consumer Credit Directive. 

Regarding creditworthiness assessment, in 29 cases out of 85 of checked creditor websites 
(34%), Member States mentioned that, based on the information on the creditor’s website, it 
was  unclear  how  the  creditworthiness  assessment  is  performed,  including  the  personal  data 
used  for  that  purpose  and  the  possible  use  of  machine  learning.  It  is  noteworthy  that 
discrepancies  were  noted  regarding  the  lack  of  clarity  in  the  information  provided  between 
different devices, for example, this seemed to be particularly problematic on smartphones.202 

Regarding  the  short-term  high-cost  products  swept,  in  47%  of  the  cases  (8  out  of  17 
products that Member States identified as short-term high cost), the website/ad was flagged 
for  further  investigation  for  potential  irregularities.  In  the  vast  majority  of  these  cases,  this 
was because the standard information required for advertising was not presented by means of 
a representative example in a clear, concise and prominent way. 

Regarding  the  COVID-19  crisis,  in  cases  where  the  Member  States  had  adopted 
extraordinary  measures  related  to  consumer  credit  (such  as  payment  moratoria),  the  mini 
sweep looked into if the required information was provided on the website. In 23 out of 36 
cases  (64  %),  the  information  was  not  provided  in  a  clear  and  comprehensible  manner. 
However,  in  most  of  these  cases  (16  out  of  23,  nearly  70%)  the  trader  was  not  required  to 
inform consumers about the measures on its website under national rules and therefore, the 
website was not flagged for potential irregularities by the sweeper. 

Participating  authorities  will  follow  up  on  the  cases  that  were  flagged  for  potential 
irregularities  with  EU  consumer  law  based  on  their  national  rules  on  investigation  and 
enforcement. 

202 For websites checked by smartphones (27 out of 118), the suspected infringement rate was 44%, higher than 
the average in the mini-sweep (36 %). In most instances, the suspected irregularity flagged by authorities related 
to the standard information in advertising (in 10 out of 12 cases). 

88 

 
 
 
 
 
                                                           
Annex 3. Who is affected by the initiative and how? 

Practical implications of the initiative 

Consumers  would  be  affected  very  positively.  Consumer  trust  would  increase  thanks  to 
measures  tackling  practices  exploiting  consumers’  situations  and  patterns  of  behaviour  and 
more effective information provision. New rules on business conduct and remuneration and 
on financial advice the streamlining of information would ensure better and more informed 
consumer choices. A higher consistent level of protection would be guaranteed for borrowers, 
thanks  to  the  extension  of  the  scope  of  the  Directive,  caps  on  interest  rate/APR,  better 
creditworthiness  assessments  and  measures  to  support  over-indebted  consumers  both  at  an 
early  stage  (strengthened  prevention)  and  via  remedies  (debt  advice).  Consumer  detriment 
stemming from currently unregulated products would be reduced, and the effectiveness of the 
Directive  in  ensuring  the  protection  of  consumers  would  be  increased,  thus  leading  to  less 
problems encountered by consumers, and to reduced financial detriment and time losses.   

The  impact  on  society  is  also  deemed  to  be  very  positive.  The  promotion  of  responsible 
lending practices combined with the broadening of the scope is expected to contribute to limit 
over-indebtedness. 90% of the over-indebted households in the EU currently have no access 
to  debt  advice,  but  might  use  it.  Moreover,  measures  on  debt  advice  would  contribute  to 
reduce over-indebtedness linked to consumer credit.  

The impact on credit providers would be less straightforward. In fact, on the one hand they 
would have to face most of the implementation costs of the new Directive, as shown by the 
cost  assessment  of  specific  policy  measures,  to  adapt  their  infrastructure  and  in  terms  of 
personnel costs. However, it can be expected that these one-off costs would be passed on to 
the customer and thereby covered by the profit margins  credit agreements, and as such less 
burdensome for businesses. Caps on interest rate/APR would be particularly costly for non-
bank  lenders,  since  they  are  more  likely  to  offer  high-cost  credit.  On  the  other  hand,  the 
relatively higher degree of harmonisation, together with the broadening of the scope, would 
result  in  a  more  level  playing  field  for  credit  providers  and  to  some  extent  facilitate  the 
conditions  to  provide  consumer  credit  cross-border  credit.  It  should  be  mentioned  that  the 
impact on bank and non-bank lenders could differ. Non-bank lenders are more likely to offer 
small value short-term high-cost loans below EUR 200, and seem to perform less thorough 
creditworthiness  assessments  and  to  be  less  compliant  with  the  Directive.  Hence,  the 
extended  scope  of  application,  coupled  with  clearer  rules  on  creditworthiness  assessments 
and reinforced enforcement would affect those actors more than bank lenders.203  

Public  authorities  would  also  face  costs.  In  particular,  the  EU  administration  would  face 
costs  for  the  legislative  amendment  of  the  Directive,  even  though  the  legislative  process 
could be facilitated by the fact that the amended provisions would be modelled after existing 
legislation, requiring less resources to develop them. National administration would also face 
a  moderate  burden.  The  revised  Directive  would  need  to  be  transposed  into  national  law. 
Moreover, establishing conduct of business rules pertaining to remuneration policy may give 

203 Finance Watch, 2021.  

89 

 
 
                                                           
rise  to  higher  costs,  since  some  national  labour  laws  may  also  need  to  be  amended.  Public 
administrations  would  also  be  required  to  monitor  compliance  with  the  new  requirements, 
and some of them might result in high costs given how complex the matter is (e.g. monitoring 
the use of alternative sources in credit scoring systems using machine learning). Further costs 
would stem from the provisions on financial education and debt advice. Member State-level 
public administrations would also bear ongoing costs associated with reporting to the EU and 
for  enforcement  of  the  requirements,  but  in  this  context  the  alignment  with  other  EU 
legislation could facilitate enforcement, by simplifying the legislative framework applicable 
to credit.  

As  regards  the  impact  on  other  market  participants,  credit  intermediaries  would  be  also 
affected by the changes included in the preferred option, in particular from the provisions on 
providing adequate explanation. Since the size of the intermediary market is not known, the 
costs  on  this  market  participants  could  not  be  estimated.  However,  the  demand  for  credit 
intermediary services seems to be quite low: only 11% of consumers surveyed for Directive 
Evaluation accessed credit through a comparison website or intermediary.204 The inclusion of 
a  specific  provision  on  peer-to-peer  lending  could  affect  peer-to-peer  lending  platforms 
acting  as  intermediaries  (i.e.  presenting/offering  credit  agreements,  assisting  consumers  or 
concluding credit agreements on behalf of creditor(s), for a fee) by explicitly including them 
under  the  scope  of  the  Directive.  The  preferred  option  would  also  have  an  impact  on 
advertisers on radio broadcasts, whose costs to advertise consumer credit would be reduced 
thanks to simplified information requirements, which could in turn lead to higher investment 
in advertising via radio broadcasts, and so increased revenues for them. 

Summary of costs and benefits 

The tables below present the costs and benefits of some of the measures which are part of the 
initiative which have been identified and assessed during the impact assessment process. 

Table 12  Overview of benefits (direct benefits only include benefits that could be generated as a 
result of a given measure implemented banks – and not by non-bank lenders)205 

I. Overview of Benefits (total for all provisions) – Preferred Option 
Amount (qualified when unquantified) 

Description 

Comments 

Direct benefits 

EUR 276.18 million (M) 

Better coverage of unregulated 
products by removing the 
minimum and maximum 
thresholds (2.1) 

Better coverage of unregulated 
products by including some of 

EUR 759.51 M 

Figures drawn from ICF 
supporting study estimates 
Beneficiaries: consumers 
(reduction in consumers’ 
financial detriment and 
monetised time losses) 

Figures drawn from ICF 
supporting study estimates. 

204 The consumer survey performed for the CCD Evaluation support study was based on 3886 responses from 
the EU-28. 
205 Some of the benefits have the same value because the benefit of each measure was calculated based on the 
assumed  increase  in  the  Directive’s  effectiveness  in  reducing  consumers’  financial  detriment  and  monetised 
time losses attributed to the measure. In some cases, the assumed increase is the same for different measures. 

90 

 
 
                                                           
the currently excluded loans 
within its scope of application 
(2.2) 

Improving legal clarity by 
providing a more detailed 
definition of some key terms 
related to obligations contained 
in the Directive (2.3/2.7) 

Improving transparency and 
consumer understanding 
through a right to receive an 
explanation on how and on what 
basis a decision on 
creditworthiness was reached 
(3a.15) 

Regular assessment from the 
Commission of the financial 
education/digital literacy 
initiatives implemented in 
Member States, identification of 
best practices, and publication 
of the findings (3a.17) 

Increased awareness of 
consumers through an 
obligation upon credit providers 
to inform them whether 
advisory services are or can be 
provided (3a.7) 

EUR 241.66 M 

EUR 138.09 M 

EUR 34.52 M 

EUR 20.71 M 

Prohibition of product tying 
practices (3a.9) 

EUR 138.09 M 

Prohibit unsolicited sale of 
credit  (3b.6) 

EUR 172.62 M 

EUR 138.09 M 

Improve the effectiveness of 
information disclosed in 
advertising by reducing the 
amount of information to be 
provided to consumers focusing 
on key information, when 
provided through certain 
channels (radio only) (2.4) 

Beneficiaries: consumers 
(reduction in consumers’ 
financial detriment and 
monetised time losses). 

Figures drawn from ICF 
supporting study estimates. 
Beneficiaries: consumers 
(reduction in consumers’ 
financial detriment and 
monetised time losses). 

Figures drawn from ICF 
supporting study estimates. 
Beneficiaries: consumers 
(reduction in consumers’ 
financial detriment and 
monetised time losses). 

Figures drawn from ICF 
supporting study estimates. 
Beneficiaries: consumers 
(reduction in consumers’ 
financial detriment and 
monetised time losses). 

Figures drawn from ICF 
supporting study estimates. 
Beneficiaries: consumers 
(reduction in consumers’ 
financial detriment and 
monetised time losses). 

Figures drawn from ICF 
supporting study estimates. 
Beneficiaries: consumers 
(reduction in consumers’ 
financial detriment and 
monetised time losses). 

Figures drawn from ICF 
supporting study estimates. 
Beneficiaries: consumers 
(reduction in consumers’ 
financial detriment and 
monetised time losses). 

Figures drawn from ICF 
supporting study estimates. 
Beneficiaries: consumers 
(reduction in consumers’ 
financial detriment and 
monetised time losses). 

After the initial (limited) costs to adapt to 
the Directive, compliance costs to 
advertise consumer credit would be 
reduced thanks to simplified information 
requirements, which could in turn lead to 
higher investment in advertising via radio 
broadcasts, hence in increased revenues 

Figures drawn from ICF 
supporting study estimates. 
Beneficiaries: advertisers and 
radios. 

91 

 
 
 
for them. 
EUR 14 M 

EUR 69.05 M 

Caps are likely to result in a reduction of 
consumers who end up in debt spirals. 

Present key pre-contractual 
information in a more 
prominent way (without 
reducing the amount of 
information provided to 
consumers at pre-contractual 
stage) (2.5) 

Obligation upon Member States 
to set interest rate/APR caps, 
without specific rules or 
guidelines on how these should 
be calculated. 

Indirect benefits 

Obligation upon Member States 
to provide – directly or 
indirectly – debt advice services 
for over-indebted or otherwise 
vulnerable consumers. 

Per EUR 1 spent debt advice will provide 
between EUR 1.4 – 5.3 in terms of 
equivalent benefits, mainly referring to 
the social costs of over-indebtedness 
avoided. 

Figures drawn from ICF 
supporting study estimates. 
Beneficiaries: consumers 
(reduction in consumers’ 
financial detriment and 
monetised time losses). 

ICF supporting study. 
Beneficiaries: consumers 
(reduction in consumers’ 
financial detriment and 
monetised time losses). 

Extrapolation from the First 
Interim Report by VVA and 
CEPS on provision of actions to 
extend the availability and 
improve the quality of debt-
advice services for European 
households (first task of a 
project to be completed in 
2021). 
Beneficiaries: society. 

The  (partially)  quantified  benefits  for  consumers  stemming  from  the  assessed  measures 
amount to around EUR 1 990 million. 

Enhanced  legal  clarity  is  expected  to  reduce  burden  on  businesses.  Moreover,  the  burden 
reduction  stemming  from  measures  simplifying  information  requirements  represent  around 
EUR  14  million  for  advertising  consumer  credit  on  radio  broadcasts.  The  burden  reduction 
linked to adapting information requirements for digital use is expected to be quite relevant, 
because it would represent a reduction in costs for providers on at least 25 million personal 
bank loans annually (personal loans that consumer enter online). 

As regards reduced burden for public administrations, the higher degree of legal clarity and 
the simplified regulatory framework applicable to credit (also thanks to synergies with other 
existing legislation), together with specific measures to improve enforcement, is expected to 
render  enforcement  procedures  more  efficient  (reducing  the  number  of  complaints  and 
increasing the level of certainty and compliance). 

92 

 
 
 
 
Table  13  Overview  of  costs  (only  including  costs  generated  as  a  result  of  a  given  measure 
implemented banks – and not by non-bank lenders, in thousands of EUR) 

II. Overview of costs – Preferred option 

Citizens/Consumers  

Businesses 

Administrations 

Measure 

One-off 

Recurrent 

One-off 

Recurrent 

One-off  Recurrent 

Direct costs 

- 

- 

23488  

122696  

15  

 167  

Indirect 
costs 

Not available 

Direct costs 

- 

 - 

83081  

667812  

66  

 584  

2.1 

2.2 

2.3/ 
2.7 

2.4 

2.5 

3a.15 

Indirect 
costs 

Not available 

Direct costs 

 - 

Indirect 
costs 

Not available 

Direct costs 

- 

Indirect 
costs 

Not available 

Direct costs 

- 

Indirect 
costs 

Not available 

Direct costs 

- 

Indirect 
costs 

Not available 

Direct costs 

- 

3a.17   

Indirect 
costs 

Not available 

Direct costs 

- 

3a.7 

Indirect 
costs 

Not available 

Direct costs 

- 

3a.9 

Indirect 
costs 

Not available 

Direct costs 

- 

3b.6 

Indirect 
costs 

Not available 

- 

- 

- 

- 

- 

- 

- 

- 

70464  

318623  

54  

 500  

8235  

9065  

- 

- 

20  

 73 

22  

 73  

21275  

 69957  

 23  

 67  

- 

6732  

24495  

- 

- 

- 

48  

 957  

18  

 83  

32  

 167  

37489 

 None 

46 

331 

Source: ICF support study to the impact assessment. 

Some  of  the  (partially)  quantified  costs  for  businesses  (around  EUR  1 460  million)  are 
expected to be passed on to consumers. 

Funding needs for debt advice services for all EU Member States  - where such services are 
either  well  developed,  available,  sporadically  available  or  need  to  be  completely  set  up  - 
would amount to EUR 22.57 million per year. For the period 2021-2030, costs linked to the 

93 

 
 
   
 
 
 
setting  up  of  debt  advice  services  have  been  estimated  around  EUR  230  million.206  They 
would be largely borne by public administrations. 

206  Extrapolation  from  the  First  Interim  Report  by  VVA  and  CEPS  on  provision  of  actions  to  extend  the 
availability and improve the quality of debt-advice services for European households (first task of a project to be 
completed in 2021). 

94 

 
 
 
 
                                                           
Annex 4. Analytical methods used in preparing the impact assessment 

Consumers affected in the status quo 

Based on the data collected in the impact assessment supporting study the possible number of 
consumers affected for key provisions of the Directive, key types of credit and key elements 
of  the  measures  presented  in  the  options  considered.  A  distinction  has  been  made  between 
personal  loans  and  credit  card,  for  which  figures  could  be  derived.207  The  figures  below 
should  be  considered  as  indicative  of  the  number  of  consumers  affected  by  the  issue.  In 
addition, the figures do not distinguish between the different extents to which consumers are 
affected by the various issues, possible measures or credit products falling outside the scope 
of  the  Directive.  As  figures  are  based  on  different  assumptions,  and  include  extrapolations 
from the UK, which however was a member of the EU until 31 January 2020, they should be 
treated with caution.  

Table 14: Consumers affected annually in the status quo (estimate) based on EU-27 figures 

Provision 

Estimate of 
consumers 
affected: based 
on personal 
loans 

Estimate of 
consumers 
affected: based on 
credit cards 

Explanation 

Understanding of the 
CCD 

SECCI: Consumers that 
found SECCI unhelpful or 
very unhelpful 

 2.9 million  

9.8 million 

Understanding offer: 
Consumers that indicated 
not to understand the offer 

 8.7 million  

29 million 

Understanding of credit 
offers: Offers rated as 
complex or very complex 

 11 million  

37 million 

APR: Consumers who 
have not heard about the 
APR 

 5.2 million  

18 million 

Based on share of consumers with 
a credit agreement finding SECCI 
unhelpful (4%) or very unhelpful 
(1%) based on ICF survey from the 
CCD Evaluation 

Based on ICF consumer survey 
from the CCD Evaluation with 
15% of consumers with a credit 
agreement that disagreed or 
strongly disagreed that offer was 
easy to understand. 

Based on share of consumers with 
a credit agreement marking 
understanding as complicated or 
very complicated in ICF survey 
from the CCD Evaluation (19%). 

Consumers with a credit 
agreement, based on ICF survey 
from the CCD Evaluation, 
extrapolated for the EU-27. 

207 Based on the EU population older than 15 years, and on the assumption that the share of EU citizens with a 
personal loan is still unchanged at 13% and that the share of EU citizens with a credit card is 43%. Please note 
that the proportion of credit cards agreement under EUR 200, excluded from the current Directive’s scope, is not 
known. 

95 

 
 
 
 
 
                                                           
Provision 

APR:  Consumers who 
have heard about the APR 
but do not know the rate 

Compliance 

SECCI: Consumers that 
did not receive SECCI  

Estimate of 
consumers 
affected: based 
on personal 
loans 

Estimate of 
consumers 
affected: based on 
credit cards 

 18 million  

61 million 

 10 million 

35 million 

APR: Consumers not 
informed about the APR 

 5.8 million  

20 million 

Credit intermediaries: 
Consumers affected by 
problems 

 4.1 million  

NA 

Creditworthiness 
assessment: consumers 
whose ability to pay was 
not verified 

Down payments: 
Consumers asked to pay a 
down payment 

Credit types 

Prevalence of zero-interest 
loans (Options 2, 3A and 
3B) 

 5.8 million  

20 million 

 15.7 million  

53 million 

7.2 million 

NA 

Prevalence of pawnshop 
agreements (Options 2, 3A 
and 3B) 

 3.1 million  

NA 

208 ICF survey, Q13 
209 ICF survey, Q10a. 

96 

Explanation 

Consumers with a credit 
agreement, based on ICF survey 
from the CCD Evaluation, 
extrapolated for the EU-27. 

Based on 18% of consumers in the 
CCD Evaluation reporting not 
having been provided with 
SECCI208 

Based on 10% of consumers in the 
CCD Evaluation reporting not 
having been informed209 

Based on share of consumers 
taking out a loan through a credit 
intermediary at 11% (ICF survey of 
the CCD Evaluation) and 1.5% 
(public consultation survey), and a 
problem incidence rate of 65% 
(2013 Commission study). 

Based on 10% of consumers in the 
CCD Evaluation who indicated that 
their ability to pay was not verified. 

Based on share of consumers asked 
to pay a down payment (27%), 
based on the ICF survey in the 
CCD Evaluation. 

Based on Eurofinas data (2019) 
showing 12% of consumers taking 
consumer credit at PoS. 
Extrapolated to the EU-27 based on 
the number of consumers with a 
credit agreement. 

Based on the 0.7% of UK citizens 
that have such an agreement. 
Extrapolated for the EU-27 based 
on the number of consumers with a 
credit agreement. Note: limited 
data, speculative figure. 

 
 
 
 
 
 
 
 
                                                           
Provision 

Estimate of 
consumers 
affected: based 
on personal 
loans 

Estimate of 
consumers 
affected: based on 
credit cards 

Explanation 

Prevalence of leasing 
agreements (Options 2, 3A 
and 3B) 

Between 7 and 
8.2 million 

NA 

Prevalence of overdraft 
facilities (Options 2, 3A 
and 3B) 

21 to 46 million  NA 

Prevalence of credits below 
EUR 200 (Options 2, 3A 
and 3B) 

Between 6.4 
million and 31 
million 

NA 

Prevalence of Short-term 
high-cost credit 

 20 million  

NA 

Roll-over credit 

 20 million  

 Up to 17,500  

Linked credit: Major 
problems with exercising 
their right of withdrawal 
for linked credit 
agreements 

NA 

NA 

97 

The minimum number has been 
based on data from Finance Watch, 
showing this at 12% of total credit. 
This has been applied against our 
estimates for consumer credit. 

The maximum figure has been 
based on data from Eurofinas on 
the share of new car loans (44%) of 
the total number of car loans 
(which is 33% of total consumer 
credit). 

Based on figures from UK, NL and 
FR ranging from share of persons 
(37%) with an arranged overdraft 
(UK) to share of persons (80%) 
indicating in a survey they have an 
overdraft facility (NL). Based on 
the number of consumers with a 
credit agreement. 

Minimum figure based on figures 
of 34% of loans up to EUR 200 
from a large non-bank lender in the 
EU. Bank figures are estimated to 
be at one third of these figures. 
This has been extrapolated for the 
EU. Based on the number of 
consumers with a credit agreement. 

Maximum figure based on figures 
from the Swedish Financial 
Supervisory authority, showing 
prevalence of consumer loans 
below EUR 200 at 53% but this 
figure includes revolving credit. 

Based on the 4.4% of UK citizens 
that have such an agreement. 
Extrapolated for the EU-27. Note: 
limited data, speculative figure. 
Based on the number of consumers 
with a credit agreement. 

As per the above (STHC credit). 

Based on 1% of consumers 
exercising their right of 
withdrawal, maximum 50% of new 
agreements being linked credit, 
16% of those consumers reporting 

 
 
Provision 

Estimate of 
consumers 
affected: based 
on personal 
loans 

Estimate of 
consumers 
affected: based on 
credit cards 

Explanation 

Cross-selling: Consumers 
affected by lender trying to 
sell additional products 

 24 million  

NA 

Revolving credit: 
unrequested extensions of 
the credit line 

 NA 

24 million  

Protection of consumers 

Interest rate caps (Option 
3B) 

 No data 

Forbearance measures 
(Options 3A and 3B) 

Up to 17,5 
million  

NA 

problems, of which 41% are major 
problems. Based on the number of 
consumers with a credit agreement. 

Based on 42% of consumers who 
indicated this been asked them in 
writing or orally when purchasing a 
loan.210 Note: low sample size. 
Based on the number of consumers 
with a credit agreement. 

Based on estimated 44% share of 
consumers with a credit card 
(2018),211 12% share of consumers 
with problems.212 Based on the 
number of consumers with a credit 
agreement. 

Based on the share of consumers 
with credit having difficulties 
making ends meet (30%). The 
measure is considered useful for 
this entire subgroup but could – 
with changing circumstances – be 
useful for others, including those 
currently without a loan. The figure 
is therefore a lower bound 
estimate. 

Debt advice services for 
vulnerable consumers 
(Options 3A and 3B) 

Debt advice services for 
low-scoring consumers 
(Option 3B)  

 Up to 17,5 
million  

 Up to 17,5 
million  

Prevalence of pre-ticked 
boxes (Option 3A) 

No data 

Prevalence of unsolicited 
sale of credit (Option 3B) 

NA 

NA 

As above 

As above 

Up to 24 million 

Estimations based on the number 
of consumers with a credit card in 
2018 (44%), of which 12% 

210 London Economics, 2013. 
211 Eurobarometer 443 figures at 43%, indexed for 2018. 
212 Based on UK figures and extrapolated for the EU. 

98 

 
 
 
 
 
 
 
                                                           
Provision 

Estimate of 
consumers 
affected: based 
on personal 
loans 

Estimate of 
consumers 
affected: based on 
credit cards 

Explanation 

experiencing problems. 

Source: ICF assessment, impact assessment supporting study 

Assessment of the policy options’ impacts 

With  regards  to  the  assessment  of  impacts,  the  Impact  Assessment  supporting  study  has 
considered  a  wide  array  of  economic,  social,  environmental,  and  overarching  impacts  and 
determine their expected magnitude, likelihood and relevance for stakeholders. An overview 
of the score given to each impact for each of these elements is presented in the table below. 
Based on this table, nine main categories of significant impacts were selected (see section 6). 

Table 15  Significance of impacts for all the policy options under consideration 

Key: ‘●’ low; ‘●●’ moderate; ‘●●●’ high 

Impact type 

Expected 
magnitude 

Likelihood 

Relevance for 
stakeholders 

Comment 

Economic impacts 

Growth and investment 

● 

Sectoral competitiveness, 
trade and investment flows  

● 

SMEs growth 

● 

● 

● 

● 

● 

● 

● 

Functioning of the Internal 
Market 

●● 

●● 

●●● 

Increased innovation and 
research and Technological 
development 

● 

● 

● 

Not assessed as the options are 
expected to have a negligible 
impact on growth and investment. 

Not assessed as the options are 
expected to have a negligible 
impact on trade and investment 
flows. Competitiveness is 
discussed, however. 

Not assessed separately, though 
effects of the Options in terms of 
the credit market are discussed. 

This is discussed in terms of 
consumer choice, competitiveness 
and specifically in regards to the 
specific objective on the internal 
market (under effectiveness) 

Not assessed as the options are 
expected to have a negligible 
impact on innovation and research  

Business substantive 
compliance costs and 
administrative burden 

●● 

●●● 

●●● 

These are covered under industry 
costs 

99 

 
 
Impact type 

Expected 
magnitude 

Likelihood 

Relevance for 
stakeholders 

Comment 

Costs for public authorities  ●●● 

●●● 

●●● 

Consumer detriment 

●●● 

●●● 

●●● 

These are covered under EU and 
MS-level costs 

These are covered under consumer 
impacts 

Consumer prices and 
choices 

●● 

●● 

●●● 

These are covered under consumer 
impacts 

Consumer decision making 
process 

●●● 

●●● 

●●● 

These are covered under consumer 
impacts 

Social impacts 

Employment 

Income distribution  

Health (& safety) 

Education 

● 

● 

● 

● 

● 

● 

● 

● 

● 

● 

● 

●● 

Governance & good 
administration 

● 

● 

●● 

Consumer trust 

●● 

●●● 

●●● 

Consumer protection 

●● 

●●● 

●●● 

Social inclusion 

●● 

●● 

●●● 

100 

Not assessed as the options are 
expected to have a negligible 
impact on employment, though the 
impacts for industry of the options 
are discussed in terms of the credit 
market impacts.  

Not assessed as the options are 
expected to have a negligible 
impact on their own.   

Not assessed as the options are 
expected to have a negligible 
impact on health.  

Not assessed as the options are 
expected to have a negligible 
impact on education itself, even if 
education measures are discussed in 
terms of their impacts on 
consumers.  

Not assessed as the options are 
expected to have a negligible 
impact on governance & good 
administration.  

Not covered separately, but as 
consumer behaviour under 
consumer impacts. 

These are covered under consumer 
impacts 

These are covered under consumer 
impacts, together with over-
indebtedness. 

 
 
Impact type 

Expected 
magnitude 

Likelihood 

Relevance for 
stakeholders 

Comment 

Over-indebtedness 

●● 

●● 

●●● 

These are covered under consumer 
impacts, together with social 
inclusion. 

Not assessed as the options are 
expected to have a negligible 
impact on environmental risks. 

Not assessed as the options are 
expected to have a negligible 
impact on climate change. 

● 

● 

● 

● 

● 

● 

Environmental impacts 

Minimizing environmental 
risks 

Climate change 

Overarching impacts 

Application of the EU legal 
consumer framework 
(enforcement) 

●● 

●●● 

●●● 

Covered under implementation, 
monitoring and enforcement. 

Economic and social 
cohesion 

● 

Sustainable development 

● 

Fundamental rights 

Individuals, private and 
family life, freedom of 
conscience and expression 

● 

● 

Property rights and the right 
to conduct a business 

● 

● 

● 

● 

● 

Not assessed separately. 

Not assessed as the options are 
expected to have a negligible 
impact on sustainable development. 

●● 

●●● 

Covered as part of social inclusion 

● 

● 

● 

● 

Not identified as a potentially 
significant impact.  

Not identified as a potentially 
significant impact category.  

Source: ICF assessment, impact assessment supporting study 

Table 16 Selected significant impacts 

Main category of impacts 

Affected parties 

 Assessment 

101 

 
 
 
 
 
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Consumer trust, choices and 
behavior 

Consumer protection 

Reduced consumer detriment 

Social inclusion and over-
indebtedness 

Industry compliance costs 

Industry level playing field and 
competition 

 



 

 























   

full 

   

full 

   

full 

partial 

  



     

full 















     

full 

partial 



     

full 

Cross-border sales of credit 

    



     

full 

partial 

EU public administration costs 
for adoption and enforcement 

Member-State public 
administration costs for adoption 
and enforcement 











    

full 

partial 











    

full 

partial 

● – overall positive impact, for all options 
● – overall negative impact, for all options 
● - positive or negative impact 

To ensure a balance representation of costs and benefits, some of these impact categories were 
merged: 

When calculating the overall efficiency score, it uses the average score, which includes more benefits 
(consumer) items than costs (business and public authorities) items. Overall, there are only three cost 
items (industry compliance cost, EU public authorities, Member States’ authorities) against six benefit 
items. Given that the benefits are also covered under the effectiveness score, this gives an unbalanced 
image.

102 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Limitations and mitigation measures 

Limited availability of updated, EU-level, comparable quantitative data 

The  limitations  related  to  the  lack  of  timely  and  comparable  Member  State  data  and  the 
inconsistencies across Member States in the terminologies used for the data that was partially 
available,  affected,  among  others,  the  assessment  of  key  problems  in  the  field  of  consumer 
credit and the assessment related to the baseline and future policy options conducted as part of 
cost  and  benefit  analysis.  In  particular,  patchy  character  of  statistics  (e.g.  on  prevalence  of 
financial  products,  consumer  complaints  and  operations  of  non-bank  lenders)  and  other 
quantitative  data  underpinning  the  assessment  of  potential  costs  and  benefits213    stemming 
from  the  implementation  of  considered  policy  options  limited  the  robustness  of  the 
quantitative  assessment  of  the  impacts,  both  in  relation  to  measures  already  adopted  in 
Member States, and in relation to the possible policy options developed by the study. 

Furthermore,  the  heterogeneity,  scope  and  large  number  of  measures  for  each  of  the  policy 
options that were subject of the assessment made the assessments of costs and benefits across 
for all of those more challenging. For instance, while the model applied for the assessment of 
measures captures broadly the costs’ implications for banks, it does not capture the possible 
costs  for  non-bank  lenders214,  which  for  some  policy  options  would  be  likely  to  incur  the 
majority of costs. And by analogy, benefits stemming from possible application of number of 
options  are  also  underestimated  due  to  the  fact  that  consumers  relying  on  non-bank  lenders 
are  not  captured  by  the  model.  In  the  same  vein,  number  of  undertaken  assumptions  for 
baseline  scenario  and  future  policy  options  suffer  from  high  uncertainty  due  to  the  lack 
sufficient data e.g. either because it is too early to extract accurate evidence (e.g. impact of the 
COVID-19  pandemic  and  the  measures  adopted  by  Member  States)  or  because  data  is  not 
collected  at  all  (e.g.  current  and  future  prevalence  of  some  type  of  consumer  loans  at  the 
national/EU level).  

To mitigate the impact  of these limitations (to the extent possible), the team  conducting the 
supporting study followed up directly with some of the authors of the reviewed literature to 
clarify selected  aspects  of interests, sought  to  access  non-publicly  available data  from  some 
stakeholders  (e.g.  national  banking  associations  and  ECRI),  extended  the  timeline  of  the 
consultation process, resorted to peer reviews, and when feasible, attempted to corroborate the 
existing evidence underpinning the key assumptions by relying on alternative available data. 
In  addition,  for  some  options  where  quantification  of  costs  and  benefits  was  not  feasible,  a 
qualitative approach was chosen instead. 

Low response rate from stakeholders targeted by the stakeholder consultation 

Several  factors  explain  the  low  response  rate  from  stakeholders  consulted  for  the  impact 
assessment supporting study, notably: the impacts of the COVID-19 crisis on organisations’ 

213 Even more problematic for benefits than for costs 
214 There is no consistent and comprehensive MS and EU level data on number of non-bank lenders (including 
disaggregation by their main types) available.  

103 

 
 
                                                           
resources,  the  timing  of  the  stakeholder  consultation  culminating  over  the  course  of  the 
summer, the overlap with other consultation activities (e.g. public consultation, feedback on 
the  Inception  Impact  Assessment)  resulting  in  stakeholder’s  fatigue.  In  addition,  data 
collection  followed  the  Evaluation  of  the  Directive  carried  out  only  last  year  decreasing  an 
appetite of some stakeholders to contribute this year. 

To  boost  the  response  rate,  the  deadlines  to  respond  to  the  surveys  and  to  participate  in 
interviews  were  extended  until  mid-September  and  mid-October,  respectively.  In  addition, 
several reminders were sent to stakeholders, including two additional reminders following the 
summer period (tailored in the national language where possible). Other mitigation measures 
included reaching out  to  relevant  organisations  with  established contacts  to  encourage some 
of  the  most  unresponsive  stakeholder  groups  (i.e.  credit  intermediaries,  P2PL  platforms)  as 
well as direct phone follow-ups. 

104 

 
 
 
 
Annex 5: Policy options detailed measures 

The below diagram explains in detail the considered policy measures and shows how they would address the identified problems, and ultimately 
achieve the initiative’s objectives. 

Table 17 Policy options detailed diagram 

Problems 

Specific 
objective (SO) 

Policy option 1 

Policy option 2 

Policy option 3a 

Policy option 3b 

Non regulatory measures  Targeted amendment of the 

Directive to increase legal 
clarity 

Extensive amendment to include 
certain new provisions in line 
with existing EU acquis 

Extensive amendment to 
include provisions going 
beyond existing EU acquis 

Problem 1: Consumers taking out loans face detriment that could be avoided 

Sub-problem 
1.1: Emergence 
of new risky 
credit products 
and new actors 
not (clearly) 
regulated 

SO 1: Reduce 
the detriment 
arising from 
unregulated 
products  

1.1: Issue an official 
communication clarifying 
the definitions of ‘credit 
provider’ and ‘credit 
intermediary’ contained in 
Article 3 (including peer-
to-peer lending platforms) 

3.1 Include a new provision addressing specifically peer-to-peer 
lending  

From other policy options: 
Policy option 2: measures 2.1, 2.2, 2.3  

2.1: Remove the minimum and 
maximum thresholds 
2.2: Include some of the 
currently excluded loans within 
its scope of application  
2.3: Amend the definition of 
some key terms which affect its 
scope of application (e.g. 
‘credit provider’, ‘credit 
intermediary’) 

Sub-problem 
1.2: Limited 
consumer 
awareness of 
the key 
elements and 
costs of the 
credit product 
they obtain 

SO 2: Ensure 
consumers 
taking out a 
credit are 
empowered by 
effective 
information on 
the risks, costs 
and impact of 

1.2: Implement an 
awareness raising 
campaign through the 
European Consumer 
Centres providing clarity to 
consumers on elements that 
are identified as unclear 
(e.g. APR) 
1.3: Issue communication 

2.4: Reduce the amount of 
information to be provided to 
consumers in advertising 
focusing on key information, 
especially when provided 
through certain channels (e.g. 
audio advertisements on radio 
or TV broadcasts) 
2.5: Present key pre-contractual 

3a.2: Establish detailed 
requirements in relation to the 
provision of adequate explanations 
(in line with Art. 16 MCD) 
3a.3: Improve conditions for 
enforcement by introducing an 
article on Competent Authorities’ 
(in line with Art 5 MCD)  
3a.4: Improve conditions for 

3b.2: Include more details on 
the way information should be 
displayed to consumers at 
advertising and pre-contractual 
stage (e.g. format, font size) 
3b.3: Include an obligation on 
creditors to provide information 
about changes in the conditions 
of the credits in case special 

105 

 
 
 
 
 
credit on their 
finances, also 
via digital 
means 

to clarify terms that may be 
subject to interpretation 
(e.g. ‘in good time’ and 
‘adequate explanations’ 
concerning pre-contractual 
information) 

enforcement and reinforce 
enforcement coordination by 
introducing a provision referring 
to the 4% rule set in the Omnibus 
Directive for cross-border 
widespread infringements (Art. 
8b(4) of Directive 93/13/EEC as 
amended by Directive 2019/2161) 
3a.5 Include a provision on the 
presentation of information based 
on the principles of the European 
Accessibility Act (presenting 
information in an adequate and 
suitable way on different 
channels). 
From other policy options: 
See: 3a.6, 3a.7 (advisory services) 

measures are applied following 
a systemic and exceptional 
economic disruption 
From other policy options: 
Policy option 3a: measure 3a.2 
(adequate explanations), 
3a.3, 3a.4 (enforcement), 
3a.7, 3a.8 (advisory 
services), 3a.12 (prohibition 
pre-ticked boxes) 

Policy option 2: measure 2.4 
(amount of information in 
advertising), 2.6 (when 
provide information) 

information in a more 
prominent way (without 
reducing the amount of 
information provided to 
consumers at pre-contractual 
stage) 
2.6: Establish detailed 
requirements in relation to 
when the pre-contractual 
information should be provided 
2.7: Provide a more detailed 
definition of some key terms 
related to the obligations 
contained in the Directive (e.g. 
‘prominently’, ‘adequate 
explanations’, ‘sufficient 
information’, ‘in a timely 
manner’) 
2.8: Improve conditions for 
enforcement through the 
inclusion of a non-exhaustive 
list of criteria to be taken into 
consideration by competent 
authorities when issuing 
sanctions 

Sub-problem 
1.3: Existence 
of practices by 
credit providers 
exploiting 
consumer’s 
situation and 
patterns of 
behaviour  

SO 3: Ensure 
that credit 
granting is 
based on 
thorough 
assessment 
(both from 
credit providers 
and consumers) 

1.4: Implement an 
awareness raising 
campaign through the 
European Consumer 
Centres to promote 
responsible borrowing  
1.5: Establish EU-level 
guidelines on how to 
regulate aspects not 

By expanding the scope of the 
Directive and strengthening 
information provision 
requirements and 
creditworthiness assessment 
requirements, practices 
exploiting consumer’s situation 
and patterns of behaviour will 
be tackled 

3a.6: Establish a legal obligation 
for credit providers and credit 
intermediaries to promote 
responsible lending (i.e. to act 
honestly, fairly, transparently and 
professionally, taking account of 
the rights and interests of the 
consumers) (in line with Art. 7(1) 
MCD) 

3b.4: Establish the obligation 
upon Member States to set 
interest rate/APR caps, without 
specific rules or guidelines on 
how these should be calculated 
3b.5: Establish an obligation for 
Member States to adopt 
measures to limit the additional 
costs/interests that credit 

106 

 
 
 
 
 
 
of the consumer 
best interest 

harmonised which are 
relevant to ensure 
responsible lending (e.g. 
limiting cross-selling 
practices, setting interest 
rate caps, establishing an 
obligation for credit 
providers to advise 
consumers on suitable 
products, limiting or 
banning rollover practices)  

Sub-problem 
1.4: Credits 
granted without 
thorough 

1.6: Providing guidance on 
the type of information that 
should be assessed during a 
CWA, in line with the 

2.9: Provide more detailed 
requirements in relation to how 
CWAs should be conducted  

107 

3a.7: Establish an obligation upon 
credit providers to inform 
consumers whether advisory 
services are or can be provided (in 
line with Art. 22(1) MCD) 
3a.8: Adopt standards on the 
provision of advisory services to 
consumers (in line with Art. 22(3) 
MCD) 
3a.9: Prohibit product-tying 
practices (in line with Art. 12 
MCD.   
3a.10: Establish conduct of 
business rules on the remuneration 
policy of credit providers and 
intermediaries to ensure that it 
does not promote irresponsible 
lending practices (in line with Art. 
7(3) MCD) 
3a.11: Establish an obligation 
upon credit providers, credit 
intermediaries and appointed 
representatives to ensure that staff 
members have the proper set of 
skills and knowledge (in line with 
Art. 9 MCD) 
3a.12: : Prohibit the use of pre-
ticked boxes when offering 
consumer credit (in line with the 
CRD) 

3a.13: Indicate that CWAs should 
take appropriate account of factors 
relevant to verifying the prospect 
of the consumer to meet his 

providers can charge when a 
credit is rolled over 
3b.6: Prohibit unsolicited sale of 
credit 
From other policy options: 
Policy option 3a: measures 3a.6 
(responsible lending), 3a.7, 
3a.8 (advisory services), 
3a.9 (ban product tying), 
3a.12 (prohibition pre-ticked 
boxes) 

3b.7: Introduction an obligation 
to consult databases to perform 
CWAs 

 
 
 
assessment of 
the consumer 
creditworthiness 
(CWA)  

See: 2.7 (‘sufficient 
information’), 2.8 
(enforcement) 

EBA guidelines on loan 
origination 
1.7: Establish guidelines 
on the use of automated 
decision-making to 
conduct CWA 
See: 1.3 (‘sufficient 
information’) 

From other policy options: 
Policy option 3a: measures 

3a.13, 3a.15 (strengthened 
CWA + explanations) 

obligations under the credit 
agreement and should be carried 
out based on information on 
financial and economic 
circumstances which is necessary, 
sufficient and proportionate. 
Member States shall ensure that 
the procedures and information on 
which the assessment is based are 
established, documented and 
maintained (in line with Art. 18 
MCD) 
3a.14: Include a provision on the 
use of alternative sources of data 
to conduct creditworthiness 
assessments reflecting the 
principles of the GDPR, in 
particular the principles of data 
minimisation, accuracy and 
storage limitation as laid down in 
Article 5 GDPR  
3a.15: Include a provision 
establishing the right of consumers 
to request and receive an 
explanation on how and on what 
basis a decision on their 
creditworthiness was reached (i.e. 
reflecting the GDPR principles 
concerning automated decision-
making) 
See: 3a.3, 3a.4 (enforcement) 

Sub-problem 
1.5: Certain 
consumers 

SO 4: Prevent 
that specific 
individual or 

1.8: Increased support to 
capacity building of 
consumer organisations 

Expanding the scope of the 
Directive and strengthening 
information provision 

3a.16: Establish an obligation on 
Member States to promote that 
financial education/digital literacy 

3b.8: Establish an obligation 
upon Member States to provide 
– directly or indirectly – debt 

108 

 
 
 
(because of 
individual 
circumstances 
or systemic 
economic 
disruptions) fall 
easily into over-
indebtedness 

systemic 
situations 
exacerbate 
consumer 
detriment and 
increase over-
indebtedness 

requirements and 
creditworthiness assessment 
requirements, will help 
creating a more resilient 
framework for consumer 
protection also in the event of 
individual situations or 
systemic economic disruptions, 
while helping to prevent over-
indebtedness 

and public bodies via 
funding on financial 
education, debt advice and 
assistance 
1.9: Establish EU-level 
guidance on measures that 
can be adopted by Member 
States to support indebted 
consumers whose financial 
situation is impacted by an 
external economic 
disruption (e.g. temporary 
moratoria on credit 
payments) 

initiatives are implemented, 
without establishing minimum 
requirements on the availability 
and the content of these initiatives 
(in line with Art. 6(1) MCD) 
3a.17: Establish an obligation on 
the Commission to regularly 
assess the financial 
education/digital literacy 
initiatives implemented in Member 
States and identify best practices, 
and to publish the findings (in line 
with Art. 6(2) MCD) 
3a.18: Establish an obligation 
upon Member States to adopt 
measures to encourage creditors to 
exercise reasonable forbearance, 
limiting the charges on default 
payments (potentially include 
definitions as well) (partially in 
line with Art. 28 MCD) 
See: 3a.3 (availability advisory 
services), 3a.12 (preventive action 
through CWA)  

advice services for over-
indebted or otherwise vulnerable 
consumers (including low 
scoring consumers)  
3b.9: Establish an obligation 
upon creditors to inform low-
scoring consumers that debt 
advice services are available 
(provided that these services do 
not influence the credit ranking 
of the consumer), in  particular 
if credit is granted following a 
negative outcome of the 
consumer creditworthiness 
assessment 
3b.10: Establish an obligation to 
include specific contractual 
clauses intended to cover cases 
of exceptional or systemic 
economic disruptions (e.g. debt 
relief/payment moratoria or 
special assistance for consumers 
in these cases)  
From other policy options: 
Policy option 3a: measure 3a.17 
(financial literacy), 3a.18 
(forbearance) 

 Problem 2: The competitiveness of the internal market is not fully achieved 

Sub-problem 
2.1: Barriers for 
credit providers 
to business 
expansion 

SO 5: Reduce 
barriers for 
providers 
offering credit 
across borders 

Recommendations and 
guidelines would create 
more even conditions for 
the provision of consumer 
credit across borders 

2.10: Obligation for credit 
databases to hold certain 
reliable negative data, to 
enhance reciprocity. 
The clarification of existing 

New provisions in line with other 
EU legislation, including one on 
widespread infringements in  line 
with the Omnibus Directive, and 
the clarification of existing 

3b.11: Centralised databases, 
holding (at least) reliable 
negative data recording late 
payments and containing 
identification of national 

109 

 
 
 
across borders  while enabling 
more choice for 
consumers 

Sub-problem 
2.2: Difficulties 
for consumers 
to access cross-
border credit 
offers 

Non-regulatory measures 
under option 1 would 
create a stronger EU 
framework for consumer 
protection facilitating 
cross-border access 

provisions would create more 
even conditions for the 
provision of credit to increase 
legal certainty and avoid 
fragmented interpretation of 
consumer credit across borders 
See: 2.1, 2.2, 2.3 (extension 
scope) 

provisions, creating more even 
conditions for the provision of 
consumer credit across borders 
See: 3a.3, 3a.4 (enforcement) 
From other policy options: 
Policy option 2: 2.1, 2.2, 2.3 
(extension scope), 2.10 

The clarification of existing 
provisions would enhance the 
comprehension/comparability 
of information for consumers 
and create a stronger EU 
framework for consumer 
protection facilitating cross-
border access 
See: 2.5, 2.6 (pre-contractual 
information), 2.7 (clarify 
definitions and terms), 2.9 
(CWA) 

New provisions in line with other 
EU legislation, and the 
clarification of existing provisions 
would enhance the 
comprehension/comparability of 
information for consumers and 
create a stronger EU framework 
for consumer protection 
facilitating cross-border access 
See: measures 3a.2 (adequate 
explanations), 3a.5 (responsible 
lending), 3a.6, 3a.7 (advisory 
services), 3a.8 (ban product tying); 
3a.12 (strengthened CWA), 3a.15, 
3a.17 (financial education, 
forbearance) 

residents, would be set up by 
Member States 
New provisions, and the 
clarification of existing 
provisions, would create more 
even conditions for the provision 
of consumer credit across 
borders 
From other policy options: 
Policy option 2: : 2.1, 2.2, 2.3 

(extension scope) 

3b.12: Introduction of a basic 
credit product that providers 
should make available to 
consumers 
New provisions, and the 
clarification of existing 
provisions, creating a stronger 
EU framework for consumer 
protection facilitating cross-
border access (e.g. debt advice 
services) 
See: 3b.4 (APR caps), 3b.6 (ban 
unsolicited sale), 3b.8, 3b.9 
(debt advice) 
From other policy options: 
Policy option 3a: measures 3a.2 
(adequate explanations), 
3a.6 (responsible lending), 
3a.7, 3a.8 (advisory 
services), 3a.9 (ban product 
tying), 3a.13 (strengthened 
CWA) 

110 

 
 
 
 
 
Recommendations and 
guidelines would improve 
legal clarity for businesses 
and reduce administrative 
burden. 

SO6: Simplify 
the existing 
legal 
framework and 
reduce 
unnecessary 
burdens 

Sub-problem 
2.3: Information 
requirements 
for 
advertisement 
on certain 
channels create 
unnecessary 
burden for 
businesses 

The clarification of existing 
provisions and the reduction of 
information requirements at 
advertising stage on certain 
channels would create a 
clearer legal framework for 
credit provision at EU level, 
and reduce burden on 
businesses. 
See: 2.4 (amount of 
information in advertising), 2.5 
(presentation of key pre-
contractual information in a 
more prominent way) 

New provisions in line with other 
EU legislation (including new 
requirements on the presentation 
of information in an adequate way 
on different channels), and the 
clarification of existing provisions, 
would create a more coherent 
framework for credit provision, 
improving legal clarity for 
businesses.  
See: 3a.5 (presentation of 
information on different channels) 

Policy option 2: measure 2.4 
(amount of information in 
advertising), 2.6 (when 
provide information) 

New provisions, the clarification 
of existing provisions and the 
reduction of information 
requirements at advertising 
stage on certain channels would 
create a clearer legal 
framework for credit provision 
at EU level, and reduce burden 
on businesses. 
See: 2.4 (amount of information 
in advertising) 

111 

 
 
 
 
Annex 6: Market developments 

Evolution of the consumer credit market over the recent years  

1.  Outstanding household debt and consumer credit specifically 

According  to  ECRI  data,  the  value  of  outstanding  consumer  credit215  in  the  EU-28 
contracted in the aftermath of the Global Financial Crisis (GFC) with a cumulative drop 
of 10,7 per cent between 2008 and 2013. However, once the EU economies embarked on 
a  firm  recovery  path,  it  kept  rising  steadily  since  2014  with  an  average  annual  growth 
rate of 3.1% between 2014 and2018.  

Figure 2 Consumer credit outstanding, in EUR billion, EU-28 

Source: ICF, based on data from ECRI 

In  per  capita  terms,  ECRI  data216  shows  that  the  EU  28  average  value  of  consumer 
credit (excluding mortgage loans) stood at EUR 1670 in 2018 (0). 

Figure 3: Consumer credit per capita, EUR thousands, EU-28 

215  Excluding  mortgages  but  including  loans  for  purchase  of  durable  goods,  car  loans,  credit  cards  and 
overdraft facility.  
216 Ibidem. 

112 

 
 
 
                                                           
Source: ICF, based on data from ECRI 

In  2019,  the  outstanding  value  of  consumer  credit  including  loans  for  purchase  of 
durable goods, car loans, credit cards and overdraft facility reached EUR 1.14 trillion.217 
According to the European Banking Authority (EBA) data, this represented only 14.7% 
of the total outstanding debt of the EU households that reached EUR 7.78 trillion in 
the  same  year.  Mortgage  loans  accounted  for  the  bulk  of  the  remaining  value  of  the 
outstanding debt of the EU households218.  

Across EU Member States, the outstanding value of consumer credit and its share in total 
household  debt  (including  mortgages)  varies  significantly.  Data  from  the  EBA  reveals 
that  in  September  2019,  75%  of  the  total  outstanding  households’  debt  (including 
mortgages) in the EU was concentrated in just three countries: France (EUR 333 billion), 
Spain (EUR 260 billion) and the UK (EUR 219 billion). Germany (EUR 86 billion) and 
Italy (EUR 65 billion) also stand out from the most of other Member States in terms of 
the value of household outstanding debt that exceeded EUR 50 billion. Yet, the share of 
consumer  credit  specifically  (excluding  mortgages)  with  respect  to  total  lending  was 
generally  higher  among  Central  Eastern  European  (CEE)  countries,  particularly  in 
Hungary (20%), Bulgaria (17%), Romania (16%) and Slovenia (15%) (0).219 

Until  2020,  consumer  credit  lending  from  banks  was  growing  in  most  EU  countries, 
thanks  to  GDP  growth  and  decreasing  unemployment  driving  the  demand  side,  and 
low interest rates and a search for increased margins220 by banks  driving  the  supply  side. 
According  to  the  same  EBA  data,  the  growth  in  consumer  credit  lending221  between 
September 2015 and September 2019 was mostly driven by Central and Eastern Europe 
countries,  and  to  lesser  extent  by  selected  Eurozone  countries  such  as  Belgium,  Spain, 
France and Italy. (0).  

217 European Credit Research Institute, 2019, Statistical Package 2019. 
218 Mortgage lending, on the other hand, amounted to €EU 5.29 trillion (68% of household lending).  
219 EBA, 2020, Thematic note on consumer lending. 
220“A bank that allocates a relatively high proportion of its portfolio to consumer lending usually has a relat
ively high net interest margin”, ibid. 
221 Defined  as  “loans  extended  to  individuals  for  personal  use  in  the  consumption of goods and 
services (e.g. vehicles and electronics), typically through credit cards”, ibid. 

113 

 
 
 
                                                           
Figure 4: Value of outstanding consumer lending (in EUR billion) and consumer lending as a 
proportion of total lending (in %), as of 2019.  

Source: ICF, based on data from EBA Thematic note on consumer lending (2020) - Supervisory 
data  

Figure 5: Annualised growth rates of consumer lending by country, September 2015-2019, (In 
percentage) 

Source: ICF, based on data from EBA, Thematic note on consumer lending (2020) - 
Supervisory data  
NB: Finland and Sweden have been excluded due to significant changes in the sample. 

As  reported  by  the  EBA  thematic  note  on  consumer  lending,  between  September  2015 
and September 2019 the volume of consumer lending non‑ performing loans (NPLs)  
114 

 
 
 
 
decreased by 24%, from EUR 83 billion to EUR 63,2 billion, much less than the overall 
decrease  in  total  NPL  volume  (around  45%).  In  September  2019,  5.5%  of  EU  banks’ 
stock of consumer loans were non‑ performing, whereas the average EU NPL rate stood 
at  2.9%.  One  of  the  reasons  identified  for  this  high  number  of  NPLs  in  this  segment 
could be the loosening of credit standards. Differences among Member States are quite 
significant, with Greece and Cyprus reporting around 40% of consumer NPL ratio, and 
all other Member States reporting a single-digit NPL ratio for consumer credit exposures. 

2.  Evolution of household indebtedness  

In  the  EU,  the  level  of  household  debt  as  a  share  of  GDP  continued  to  decline  in 
relative terms  since the  GFC from  61% in  2009 to  52.6 % in 2018 (0). In terms  of the 
trajectory  of  household  debt  as  a  share  of  final  consumption  expenditure,  a  similar 
trend  was  observed  with  household  debt  as  share  of  the  final  consumption  expenditure 
declining from 15.4% in 2009 to 11.3% in 2018 (0). 

Figure 6: Household debt as % of GDP, EU-28 

Source: ICF, based on data from ECRI 

Figure 7: Consumer credit as % of final consumption expenditure of households, EU-28 

115 

 
 
 
 
 
 
Source: ICF, based on data from ECRI 

Part  of  the  explanation  for  this  trend  is  a  ‘consumption  smoothing’  of  households 
reducing  their  debt  exposure  and  increasing  the  reliance  on  their  savings  in  the  initial 
recovery  phase  following  the  GFC  (similar  trend  is  observed  during  COVID-19 
pandemic)222,  as  well  as  GDP  growth  rate  across  the  EU  exceeding  the  growth  rate  in 
debt consumption (in particular from 2015 onwards when EU economies grew relatively 
fast).  

While  no  comprehensive  data  from  the  EU  is  still  available  at  the  moment,  the  most 
recent  data  from  the  US  market  on  the  impact  of  COVID-19  on  consumers’ 
indebtedness following first months of pandemic shows similar pattern to the one in the 
aftermath of GFC. Once the COVID-19 crisis hit, consumers have started adjusting their 
consumption  by  postponing  discretionary  spending  such  as  cars  and  appliances223  and 
reducing also the number of credit transactions, and on average, the level of indebtedness 
has  shown  some  signs  of  decline224.  And  yet,  there  has  been  also  a  substantial 
heterogeneity  across  borrowers.  In  particular,  reductions  in  both  balances  and 
transactions  were  driven  by  creditworthy  borrowers,  whereas  outstanding  monthly 
balances even increased for the riskiest borrowers in affected counties.225 Generally, it is 
plausible  that  while  average  household  indebtedness  will  fall,  for  some  segments  of 
consumers,  in  particular  low-income  ones  disproportionately  affected  by  COVID-19 
(e.g.  unemployment  in  tourism  and  hospitality  sector),  level  of  indebtedness  may 
increase. In the US, the delinquency rates across most products between March and June 
decreased, though many consumers benefited from different form of consumer assistance 
over  that  period  as  well.  Something  that  is  not  warranted  later  on  as  public  support 
schemes will be gradually rolled back.226  

Generally,  household  indebtedness  that  can  also  proxy  the  level  of  demand  for  debt 
appears to be significantly higher in countries with more developed financial markets.227 
This is illustrated in 0, which shows that household debt (including mortgages) relative to 
disposable  income  is  greater  in  countries  such  as  Denmark,  Norway  and  Netherlands 
(with  rates  around  250%)  than  in  new  EU  Member  States  such  as  Lithuania  or  Latvia 
(with  rates  close  to  50%).  This  is  explained  by,  among  other  factors,  greater 
sophistication  of  the  local  financial  markets  and  far  higher  prevalence  of  mortgage 
products in Western Europe compared to the Central and Eastern Europe Region. 

Figure 8: Total household debt of net disposable income in 2019, in % 

222 For instance, with COVID-19 measures restricting movement and leaving shops and restaurants closed, 
people’s ability to spend was limited over the second quarter. In the UK, the household saving ratio  – the 
average percentage of disposable income that is saved – increased to a record 29.1% by end of September 
2020,  up  from  9.6%  in  the  previous  three  months.  See  FT,  September  30,  2020.  BoE  economist  warns 
against  pessimism  after  record  drop  in  GDP.  Available  at:  https://www.ft.com/content/fed4fe06-8c6a-
4272-b0b3-a0759805eb64 
223 McKinsey, June 2020, European Consumer finance: moving to next normal.  
224 Experian, 2020, COVID-19 impact: changes to consumer debt and credit.  
225 Vox, August 2020, The COVID-19 shock and consumer credit.  
226 Consumer Financial Protection Bureau, August 2020. The Early Effects of the COVID-19 Pandemic on 
Consumer Credit.  
227 Finance Watch, 2020a, Basic Financial Services. 

116 

 
 
                                                           
Source: ICF, based on data from OECD, 2019 

Over-indebtedness  relates  to  situation  when  a  household  is  unable  to  meet  the  debt 
repayment  obligations  but  also  other  payments  such  as  rent,  utility  bills,  healthcare  or 
insurance bills or taxes and/or fines.228 There are different possible drivers of households’ 
over-indebtedness, including macro-economic factors, cost of living, types of credit taken 
out by households, level of borrowing, and personal circumstances.229   

A  recent  report  published  by  Eurofound  sheds  some  light  on  the  percentage  of  people 
aged 18 or more at risk of over-indebtedness (0).230 To do this, the report used data from 
the European Quality of Life Survey (EQLS) on the number of people with arrears as 
well as those with difficulties making ends meet.231 The survey found that as of 2016, 
people in Southern and Central and Eastern European countries are more at risk of over-
indebtedness. For example, in Greece and Romania 17% and 21% of people respectively 
claimed to experience difficulties to make ends meet, as opposed to only 1% of people in 
Sweden.  This  difference  is  also  due  to  macro-economic  factors,  which  are  among  the 
most  important  causes  of  financial  difficulties.  However,  the  Swedish  Financial 
Supervisory Authority found that in Sweden in 2019 almost 10% of new non-mortgage 

228  In  this  context,  over-indebtedness  does  not  mean  an  occasionally  missed  payment  but  rather  more 
structural  payment  problems  e.g.  several  months  of  missed  debt  repayment  obligations.  Note  that  some 
differences in interpretation of the concept across the Member States exist. 
229 CIVIC, 2013. 
230 Eurofound, 2020a.  
231  Arrears  could  apply  to  rent  or  mortgage  payments,  consumer  credit,  loans  from  family  or  friends,  or 
utility or telephone bills. Figure based on responses to questions 88 and 93 from EQLS 2016. This does not 
capture  people  with  high  levels  of  indebtedness  without  arrears  and  difficulties  making  ends  meet  for 
which  if  the  context  changes  (increases  in  unemployment  or  interest  rates)  the  situation  may  change 
drastically.  Some  high-income  Member  States  have  elevated  levels  of  household  indebtedness:  Denmark 
(household debt was 128% of GDP in 2017), the Netherlands (106%) and Sweden (88%).  

117 

 
 
 
                                                           
borrowers experienced payment problems within the first five months. The probability of 
early payment problems was higher for young and low-income borrows.232 

Figure 9: Proportion (In percentage) of people aged at 18+ at risk of over-indebtedness: arrears 
or difficulties making ends meet, 2016, EU-28 

Source: Eurofound - European Quality of Life Survey (EQLS) 2016. 

The  over-indebtedness  may  be  also  proxied  by  the  debt-income  ratio233  of  households 
that provides information on the extent to which a household can service its debt on the 
basis of its income-generating capability. In principle, the higher the ratio, the higher the 
vulnerability of a given households, though for some Member States mortgages (linked 
to a property, and hence an asset) will stand for a bulk of outstanding debt. According to 
the  latest  available  ECB  data  from  2017234,  the  median  debt-income  ratio  in  the  Euro-
area in 2017 stood at 70.3% (compared to 72.8% in 2014) (0) with relatively highest ratio 
among the wealthiest and the poorest households. Age wise the households in Eurozone 
in  the  age  bracket  35-44  had  the  highest  debt-income  ratio  (144.6  compared  to  for 
instance 78.9 and 54.1 for the age brackets 45-54 and 55-64 respectively). 

Figure 10: Median debt to income ratio – breakdowns, (in percentage) 

232  https://www.fi.se/contentassets/c7fd1b52daa54371a869b74e4f56c276/fi-analys-29-betalningsproblem-
sammanfattning_eng.pdf, consulted on 23 February 2021. 
233  Calculated  as  the  ratio  between  total  liabilities  and  household  annual  gross  income  for  indebted 
households 
234  ECB,  March  2020.  The  Household  Finance  and  Consumption  Survey:  Results  from  2017  wave. 
Available 
at: 
https://www.ecb.europa.eu/home/pdf/research/hfcn/HFCS_Statistical_Tables_Wave_2017.pdf?906e702b7
b7dd3eb0f28ab558247efc5  

118 

 
 
 
                                                           
Source: ICF, based on data from ECB, March 2020. The Household Finance and Consumption 
Survey: Results from 2017 wave.  

Some  recent  research  suggests  that  credit  cards  may  be  one  of  the  products  where 
repayment rate will be most severely hit by the impact of the pandemic. The recent 
study235  of  the  European  Dunn  &  Company  (EDC)  used  a  modelling  approach236  to 
gauge the impact that lockdowns, furlough schemes and rising unemployment had on the 
average values revolved on credit cards across the major European markets. 0 illustrates 
the results of this modelling and impact on ten selected markets with the average amount 
on  credit  card  not  paid  at  the  end  of  the  statement  period.  As  for  different  consumer 
segments, high heterogeneity across the countries can be also observed with consumers 
from Ireland and the Netherlands experiencing substantially more issues with repayment 
than those in other countries like Spain and Germany. 

Figure 11: Amount of revolving credit not paid at the end of statement period, in EUR 

235 EDC, 2020. Are we heading for the new consumer debt crisis following the COVID-19 pandemic?  
236 EDC has modelled the impact that lockdowns, furlough schemes and rising unemployment had on the 
average  values  revolved  on  credit  cards  across  the  major  European  markets.  using  the  adjusted  GDP 
forecasts from the European Commission, and categorised them into ‘high impact markets’ (comprising of 
Italy,  Spain,  UK  and  France),  ‘medium  impact  markets’  (comprising  of  Ireland,  the  Netherlands  and 
Germany)  and  ‘low  impact  markets’  (comprising  of  Sweden,  Norway  and  Poland).  Each  category  has  a 
different ‘COVID factor’ assigned, which was used to forecast the increase in the value of credit revolved. 

119 

 
 
 
                                                           
Source: EDC, 2020. 

In the same vein, a Bruegel study on the financial fragility of European households in the 
time of COVID-19237 found that on in three EU households is unable to meet unexpected 
expense238  during  regular  times,  let  alone  pandemic.  Yet,  the  financial  fragility  of 
households varies across the Member States (0). 

Figure 12: Household inability to meet an unexpected required expense, all households, 
percentage shares, 2018  

Source: ICF, based on data from Eurostat, EU-SILC.  
Notes: EU27 displays the average of all EU member states after January 2020 (those exhibited 
except the UK). EA19 is the euro-are average.  

237 Bruegel, July 2020. 
238  Examples  of  unexpected  financial  expenses  include  surgery,  a  funeral,  major  home  repairs  and 
replacement of durables such as a washing machine or car 

120 

 
 
 
 
                                                           
3.  Evolution and share of the different types of consumer credit 

Since  the  Great  Financial  Crisis  (GFC),  three  types  of  consumer  credit  namely,  credit 
cards, non-automotive credit at  point of sale (PoS) and personal  loans, have seen some 
material  evolution.  0  presents  the  percentage  of  granted  consumer  loan  agreements  
provided  by  Eurofinas  members  between  2012  and  2018  and  disaggregated  by  specific 
product  and  (consumer  credit  for  personal  consumption,  car  finance  and  other)  along 
with  the  weight  of  the  three  specific  products  within  consumer  credit  category  (right 
axis). It shows that consumer credit for personal consumption accounted for roughly 50% 
of the total credit agreements granted during those years, albeit their share was declining 
over  that  period.  Consumer  credit  for  personal  consumption  includes  credit  cards  and 
other revolving credit (accounting for around 47-55%), personal loans (between 34% and 
38%)  and  non-automotive  credit  sold  at  the  point  of  sale  (representing  approximately 
15%).  

Figure 13: Percentage of newly granted loans by sectors and for consumer credit products by 
Eurofinas members between, 2012-2018. 

Source:  Eurofinas  facts  and  figures  from  2012  to  2018.  Note  that  2015  data  is  missing.239 
Figures for 2019 confirms this trend. Revolving credit and credit cards account for 47% 
of  the  total  of  consumer  credit  for  personal  consumption,  personal  loans  represent  the 
39% and credit at the point of sale 14%. 

Table  18  New  consumer  credit  granted  by  Eurofinas  members in  2019, breakdown  per type  of 
loan (in volume) 

Loan Type 

Million EUR 

Percentage of total 
credit granted by 
Eurofinas 
members 

239 Eurofinas members do not account for the entire consumer credit market as they represent 17 Member 
Associations covering 17 countries (BE, CZ, DK, FI, FR, DE, IT, NL, NO, PL, PT, ES, SE, TR, UK) and 
LT  and  Morocco  as  correspondent  members.  Also,  note  that  consumer  credit  for  personal  consumption 
(right axis) include leasing agreements (under non-automotive credit at PoS). 

121 

Direct personal loans525351474850303031313029181718232322201220132014201620172018Consumer credit for personal consumptionVehicle financeOther type of credit535252504847121414141515353434353738201220132014201620172018Revolving credit including credit cardsNon automotive credit at the Point of SaleDirect personal loansConsumercredit for personal consumption includes products as:  
 
 
                                                           
Consumer credit for personal 
consumption 

241 892 

52%  

  Personal loans 
  Revolving credit including credit 

94 689 (39%) 
112 974 (47%) 

cards 

  Credit at the point of sale 

34 229 (14%) 

o  Consumer goods 
o  Other  

Car finance 
Other 
TOTAL  

Eurofinas Annual Survey 2019 

29 815 
4 414 
117 087 
110 188 
469 168 

25%  
23% 

The available data on the share of households using a particular product falling under 
the category of consumer credit (excluding mortgages) is somewhat fragmented. One of 
the  available  sources  of  a  comparable  data  are  the  special  Eurobarometer  surveys 
focusing on the use of selected financial products. 0 and 0 below show the results of the 
latest edition 446, which suggest that in 2016, an estimated 43% of EU-28240 households 
held a credit card while the share of households with at least one personal loan stood at 
11%.  

Yet, these figures are somewhat in contrast with the results of a 2018 survey conducted 
by ING in a selection of 12 EU Member States (and other third countries). As illustrated 
in  0,  personal  loans  were  the  most  common  product  of  consumer  credit  used  by  an 
average of 23% of the EU households with credit cards being the second most common 
product (18%).  

Figure 14: Types of consumer credit products held by households (in percentage of households) 

240 Note that Croatia did not yet feature as part of Eurobarometer research even though the country joined 
the EU in 2013. 

122 

 
 
 
 
 
 
 
 
                                                           
Source: ING International survey February 2018 “Saving comfort – a path to happiness. 
Examining money choices in Europe, USA and Australia” – extracted from the report Finance 
Watch “Is the human dignity of individual debtors at risk?”, 2020.  

Overall,  it  should  be  noted  that  consistent  EU-wide  data  on  the  prevalence  of  specific 
types of consumer credit, including overdrafts facilities, revolving credit, credit cards, 
student  loans  and  car  loans  is  scarce.  Nonetheless,  the  following  section  attempts  to 
provide  some  insights  into  the  importance  of  each  of  the  products  and  their  recent 
evolution. 

Credit for consumption (or personal loans) 

The share of EU citizens with a personal loan, as reported by the Eurobarometer survey, 
in 2016 was estimated at 11%, down from 13% in 2011, albeit up from 7% in 2005 (0).  

Figure 15: Estimated share of EU citizens with personal loan in 2011 and 2016 (in percentage) 

123 

 
 
 
Source: Special Eurobarometer 373 and 446.  
Note: Euro area data: EU-27 in 2011 and EU-28 in2016. 

The importance of personal loans in the consumer credit product mix held by consumers 
varies  across  the  EU  Member  States.  A  recent  (2019)  report  prepared  by  Deloitte 
compiled the data, as of 2018, on the share of various consumer credit products in the 
total  outstanding  of  consumer  credit  (excluding  mortgages)  held  by  an  average 
consumer in selection of European countries, including France, Germany, Italy, Poland, 
Spain,  Sweden  and  the  UK  (0).241  The  results  show  that  personal  loan  is  the  most 
important consumer credit product used in all of these analysed countries, except the UK. 

241 Deloitte, 2019.  

124 

 
 
 
                                                           
Its  share  ranged  from  29%  of  the  total  outstanding  debt  portfolio  held  be  an  average 
consumer in the UK, to 52% in Poland.242 

Figure 16: Product mix by geographic balance growth, 2018 (GDP 2017) 

Source: Deloitte, based on compilation of data from central bank statistics and company reports 

The same Deloitte report also suggests that the average outstanding value of the personal 
loan  per  capita  in  the  largest  EU  markets  varied  from  EUR  1 319,  EUR  1 192,  EUR 
1 044 and EUR 1 032 in Sweden, France, Germany respectively, and the UK to EUR 582 
in  Italy.  Given  generally  lower  indebtedness  level  in  the  Central  and  Eastern  Europe 
countries,  the  outstanding  values  of  personal  loan  per  capita  are  plausibly  considerably 
lower  in  that  region  than  in  the  largest  European  markets  in  Western  and  Northern 
Europe, though differences in income levels between regions should be borne in mind. 

In line with the historical trends, it can be expected that the outbreak of the COVID 19 
pandemic  will  temporarily  decrease  the  uptake  of  personal  loans  and  the  average 
outstanding value per capita, though this may not be true for specific consumer segments 
(e.g. low-income category). For instance, some initial data shows that in March and April 
2020 European consumer finance entities saw decline in lending to between 40 and 70% 
on  the  y-o-y  basis.  Decline  was  more  pronounced  for  credit  cards  and  unsecured  loans 
than point of sale financing243.  

Personal  loan  category  comprises  various  type  of  sub-products  including  also  so-called 
short-term  high  cost  (STHC)  credit  of  which  one  example  are  payday  loans.  Payday 

242 Personal loans represented 29% of the  consumer credit product  mix in the UK, 30% in Italy, 35% in 
Sweden, 38% in Spain, 40% in Germany, 45% in France and 52% in Poland. 
243 McKinsey, June 2020, European consumer finance: moving to ‘next normal’.  

125 

 
 
 
                                                           
loans are short-term credit agreements where a borrower is expected to repay the loan’s 
principal from the next week/ month salary. Payday loans warrant particular attention due 
to  the  risk  of  relatively  higher  detriment  that  these  products  may  imply  given,  among 
other  factors:  typically  high  interest  rates  and  additional  fees  attached  to  such  credit, 
terms  and  conditions244,  specific  segment  of  more  vulnerable 
complex  credit 
consumers245  who  tend  to  resort  to  lenders  offering  payday  loans  and  sometimes 
inappropriate  creditworthiness  assessment  (CWA)  favouring  fast  disbursement  over  the 
thorough  check.  A  survey  from  the  European  Commission  has  reported  that  60%  of 
payday  lending  websites  emphasize  the  speed  and  simplicity  over  price.246 As  noted  in 
the CCD Evaluation, the risky nature of these products can be also reflected by the fact 
that payday lenders can still generate high revenues, despite comparatively high default 
rates.247  

Payday loans have existed since the 1990s and for almost two decades, they were mostly 
restricted to the Nordic European countries and the US.248 Since 2008, payday loans have 
become  more  common  in  the  EU  and  are  now  available  in  many  Member  States,249 
although to varying degrees. Digitalisation seems to have contributed to this expansion as 
it  has  allowed  automated  processes  enabling  consumers  to  access  credit  online,  often 
within a few minutes from the first click on the application. A recent study examining the 
digitalisation  of  the  marketing  and  distance  selling  of  retail  financial  services,  which 
mapped  200  European  providers  of  financial  services  and  products,  found  that  74%  of 
the  operators  offering  STHC  credit  in  the  EU  were  new  operators,  as  opposed  to  26% 
offered by traditional credit providers.250  

Comparable  EU-level  data  on  the  average  amount  of  money  borrowed  through  payday 
loans is not available, but anecdotal evidence reveals that in the UK the average amount 
borrowed  in  2013  was  GBP  265-270,  in  the  Netherlands  it  amounted  to  EUR  200  in 
2011.251  

A report of the Central Bank of Ireland highlights that moneylender customers are more 
likely to be in the lower-socio-economic group. Over one in five moneylender customers 
were making repayments to at least two separate moneylenders. This was confirmed by 
consumer  surveys  of  the  UK  Financial  Conduct  Authority,  which  show  that  short-term 
credit users had an average income lower than the average, and that the main reason for 

244 Finance Watch, June 2019, The EU should tackle exploitative consumer loan head on.  
245  Generally  vulnerable  or  already  indebted  consumers  who  would  not  have  access  to  more  favourable 
credit channelled through the more traditional credit providers. 
246 LE et al., 2019. 
247  The  Evaluation  referred  to  anecdotal  evidence  presented  in  a  2015  study  [Attaité,  M.,  2015]  which 
pointed  out  that  the  biggest  payday  lender  in  the  UK  had  a  loss  rate  (denoting  what  part  of  revenues  is 
taken by the losses) of 41% and default rate  of 9%,  with the company attaining a 27% profit  margin, as 
opposed to 16%, 2% and 35% respectively for the average of credit unions. 
248  Evaluation  of  the  CCD;  Oswald  Stoll  [UK],  2019,  Big  And  Small  Differences  In  Payday  Loans  In 
Europe; New Statesman, 2014, The History of Payday Loans.  
249 16 EU Member States were captured in a recent OECD report examining the provision of STHC credit 
in a selection of countries, of which 10 reported the presence of this type of credit product (AT, CZ, DE, 
DK, EE, LV, NL, RO, SK, UK), while six did not (EL, ES, FR, PT, SE, SI); OECD, 2019. 
250 LE et al., 2019. 
251 Cherednychenko, Meindertsma, 2019. 

126 

 
 
                                                           
taking out a loan was to pay for living expenses, followed by paying a bill.252 Over 60% 
short-term credit users had outstanding non short-term credit debts (including 20% with 
credit card debt  and 28% with  overdraft debt).  Around 75% of payday  loan consumers 
take out more than one payday loan in a year. In 2017, 37% of UK relative low-income 
households  had  a  payday  loan,  versus  22%  of  middle-income  households  and  14%  of 
higher-income households - with the lower-income share between EUR 17 069 and EUR 
34 138, middle-income between EUR 34 138 and EUR 56 897 and higher-income more 
than EUR 56 897.253  

In  Sweden,  the  volume  of  new  consumer  loans  below  50 000  SEK  (around  490  EUR) 
more than doubled between 2008 and 2018. In 2018, more than half of consumer loans 
(around  50%,  including  revolving  credit)  were  below  2 000  SEK  (around  195  EUR), 
with  an  extremely  high  APR  (1 446%  for  non-bank  lenders  and  12%  for  banks). 
Moreover,  the  majority  of  new  small  loan  borrowers  have  at  least  two  loans.254  The 
Swedish Financial Supervisory Authority found that borrowers of small loans experience 
early payment problems more often than borrowers of large loans.255  

Payday  loans  are  particularly  common  in  Lithuania  and  the  UK,  where  37%  of  low-
income  households  have  resorted  to  this  type  of  credit,256  have  been  growing  fast  in 
countries like Sweden, Poland and Czech Republic, while the national market for payday 
loans in Germany is limited due to the wide availability of overdraft facilities.257  

Some  countries  have  taken  actions  (such  as  interest  rate  caps  and/or  required  licensing 
for  lenders)  to  regulate  this  type  of  products,  which  has  impacted  the  evolution  in  the 
future  of  this  product  within  the  EU  market.  An  example  is  the  Netherlands  which 
enforced new rules (requiring payday companies to apply for a license and a cost cap of 
10% of the total loan) that have led to the number of payday loans falling from 89 000 in 
2011 to 1 480 in 2013, reducing consequently the number of payday companies from 21 
to 6.258 Similarly, Belgium has virtually eliminated payday loans by extending the scope 
of the CCD to loans below EUR 200, as well as Denmark, which has enforced the new 
consumer code and has placed restrictions on showing payday loan ads in specific cases 
(such  as  next  to  gambling  ads).  The  near  disappearance  of  the  payday  loan  market  in 
Belgium  is  due  to  the  combination  of  extending  consumer  credit  legislation  to  loans 
under  EUR  200  in  combination  with  an  interest  rate  cap,  making  them  no  longer 
commercially viable. 

In  some  Member  States  EUR  200  represent  an  important  share  of  the  monthly 
income. As pointed out by the European Economic and Social Committee in their 2019 

252 FinCoNet, 2019a, 2019b. 
253 LE Europe et al., 2019, Behavioural study on the digitalisation of the marketing and distance selling of 
retail financial services. 
254 Finansinspektionen, 2019, Svenska konsumtionslån. 
255 
experience-payment-problems/, consulted on 23 February 2021. 
256 LE Europe et al., 2019, Behavioural study on the digitalisation of the marketing and distance selling of 
retail financial services. 
257 Finance Watch, 2019, The EU should tackle exploitative consumer loan head on. 
258 Autoriteit Financiële Markten [NL], 2014, Markt voor flitskrediet verder opgedroogd. 

https://www.fi.se/en/published/reports/fi-analysis/2021/fi-analysis-29-why-do-some-borrowers-

127 

 
 
                                                           
information report for the CCD Evaluation, EUR 200 corresponds to approximately 50% 
of the average monthly wage and 75% of the average monthly pension in some European 
countries.259  

Proportion that EUR 200 represents according to average monthly salary (2019*), Source: ICF, 
based on Eurostat data on mean income [ILC_DI03] *Data from 2018 used for BE, FR, IE, IT, 
LU, SK, UK. 

Among the different restrictions on payday loans, setting price caps are one of the most 
widely used measures adopted by Member States.  

The introduction of interest rate or APR caps was adopted by 23 Member States, and 
other four have introduced caps that apply to defaults loans only.260 The main typologies 
of caps are a fixed or adjusted nominal interest rate caps (monthly or quarterly), APR 
caps or caps on the total cost of credit. For instance, before COVID-19: 

 

 

 

In  Germany,  interest  rate  had  to  be  lower  than  double  the  average  interest  rate  of 
comparable  consumer  loans  plus  a  relatively  small  fee,  or  less  than  the  average 
market rate calculated by the Central Bank plus 12 p.p., not to be declared usurious.  
In  Portugal,  APR  was  capped  for  each  type  of  credit  product  (personal  loans, 
revolving  credit)  and  adjusted  every  quarter,  based  on  the  average  APR  of  new 
consumer  credit  agreements  provided  during  the  previous  quarter.  In  Slovakia,  the 
maximum cap was two times the average APR (including linked services) calculated 
by Bank of Slovakia based on banking sector rates. 
In  Lithuania  and  Sweden,  the  total  cost  of  credit  could  not  exceed  the  total  loan 
amount. On top, the maximum annual nominal interest rate was 75% in Lithuania and 
40% in Sweden.261 

Caps are considered by the legislators in Member States as a tool to ensure a high-level 
of  consumer  protection,  which  has  also  led,  in  some  cases,  to  the  disappearance  of 

259 INT/884-EESC-2019-01055-00-00-ri-tra. 
260 BE, BG, CY, CZ, DE, DK, EE, EL, ES, FI, HR, HU, FR, IE, IT, LT, MT, NL, PL, PT, SE, SI, SK. AT, 
LU,  LV  and  RO  have  interest  rate  caps  that  apply  to  defaults  loans  only,  rather  than  the  interest  rates 
themselves. 
261 FinCoNet, 2019b; Accenture, Finnish Retail lending Market study, June 2019. 

128 

 
 
 
                                                           
products  such  as  payday  loans,  which  entail  high  risks  for  consumers262  (e.g.  Belgium, 
Slovakia). Since new price cap regulation in Finland (2013), the number of new payment 
default notices decreased by 16%.263 Despite this, the existence of high interest  rates is 
still a source of concern in some countries; in fact, they are the main reason for consumer 
complaints  in  some  of  them  (e.g.  Bulgaria,  Malta).264  During  the  COVID-19  crisis, 
some Member States (e.g. Finland, the Netherlands) temporarily lowered the caps on 
consumer credit interest rates to better protect borrowers.   

Based on the experience of several Member States as well as states in the US that have 
passed  laws  capping  the  price  of  loans  (i.e.  APR/interest/costs  caps),  a  2015  study 
analysing the industry of payday loans concluded that setting sufficiently low caps (the 
study  sets  the  limit  at  36%)  seemed  to  be  an  effective  measure  to  limit  or  eliminate 
payday loans. It noted that Member States where the APR cap was lower than 36% (e.g. 
Belgium,  France,  Italy,  Germany)  did  not  experience  the  presence  of  payday  loans.  In 
contrast,  the  industry  was  growing  in  other  Member  States  that  had  either  set 
significantly  higher  caps  (e.g.  Lithuania,  Poland)  or  did  not  exist  at  all  (e.g.  Sweden, 
Spain).265 

Consequently,  the  measures  taken  by  governments  in  Europe  and  more  recently  in  the 
US,266 have constrained the development of this specific product, considered sometimes 
as too risky for certain consumers. However, the consequences of a drop in supply could 
potentially push consumers to other forms of credit even less regulated. 

Payment  protection  insurance  (PPI)  are  insurances  designed  to  cover  repayments  in 
certain  circumstances  and  often  tied  or  bundled  with  personal  loans,  payday  loans  but 
also credit cards (see below). They raised concerns in some Member States as it is linked 
to a number of mis-selling scandals (e.g. consumers sold ‘worthless’ insurance that was 
unsuitable  for  them)  in  the  sector,  such  as  in  Ireland  and  Spain.267  Consumers  are  also 
deliberately  misinformed  about  the  specific  conditions  of  the  contract,  with  many 
believing  that  the  coverage  includes  job-loss  when  in  fact  this  is  rarely  the  case.  In 
Belgium between 2011 and 2015, insurers paid out a claim in only 0.24% of all contracts, 
which is significantly low when compared to other insurance products.268 PPIs can entail 
disguised high costs which do not always appear to be included in the calculation of the 
APR.269  The  revenue  generated  is  substantial:  in  the  UK,  GBP  38  billion  has  been 
refunded by banks to  consumers since 2011, after the UK Financial Conduct  Authority 

262  Rate  caps  could  prevent  over-indebtedness  by  avoiding  ultra-high  interest  rates  for  smaller  loans. 
Eurofound, 2020a. 
263 Accenture, Finnish Retail lending Market study, June 2019. 
264 ICF Impact Assessment support study. 
265  Attaité,  M.,  2015,  Pay-day  lenders:  why  can  we  consider  them  as  being  bad  players  on  the  credit 
market? 
266  NCLS  [US],  Payday  Lending  Legislation  2020,  “The  state  of  Virginia,  [...]  caps  the  interest  and  fees 
that may be charged under a short-term loan at an annual rate of 36%, plus a maintenance fee”.  
267 Financial Services User Group (FSUG), 2019, Opinion on responsible consumer credit lending. 
268 FSMA, 2017, Study of payment protection insurance offered in conjunction with consumer loans. 
269 See ICF, Support study to the Impact assessment, 2020 

129 

 
 
                                                           
found that PPI was mis-sold.270 In Germany, the commissions paid to credit providers for 
the sale of PPI policies usually amount to 50% or more of the insurance premium.271  

Credit cards  

The  use  of  credit  cards  in  the  EU  has  accelerated  since  2005.  Eurobarometer  survey 
results from 2006, 2011 and 2016 point to a steady increase in the number of EU citizens 
who declared having a credit card, from 40% in 2011 and 43% in 2016 (0).  

Figure 17: Estimated share of EU citizens with a credit card in 2011 and 2016, (in percentage).  

Source: ICF, based on Special Eurobarometer 446 and 373.  
Note: Euro area data: EU-27 in 2011 and EU-28 in2016. 

270 https://www.fca.org.uk/data/monthly-ppi-refunds-and-compensation, consulted on 15 February 2021. 
271 Cherednychenko, Meinderstma, 2018.  

130 

 
 
 
                                                           
For individual EU Member States, large variations with respect to card usage exist: as of 
2017, the number of cards per inhabitant ranged from 0.8 to 3.9, the number of payments 
made per year per inhabitant ranged from 26 to 329, while the corresponding transaction 
values ranged between EUR 1,800 and more than EUR 17,000 per year and inhabitant.272 

Furthermore,  among  the  various  types  of  credit  cards,  a  recent  report  published  by 
Finance Watch273 examined the frequency with which different types of credit cards are 
used. The report distinguished between credit cards with a “next month full debit” option 
–  in  which  the  debit  is  paid  back  the  next  month  in  full  –  and  those  with  a  “monthly 
partial repayment” option – allowing a consumer to make partial payments every month. 
The  survey  results  indicated  that  both  products  have  been  widely  used  although  to 
various degrees across different Member States. 

At the EU Member State level, the share of citizens of 15  years and older with at least 
one  credit  card  varied  widely,  ranging  from  approximately  80%  in  Luxembourg, 
Denmark  and  France  to  below  20%  in  Hungary,  Bulgaria,  Poland  and  Portugal  (0). 
Furthermore, the Deloitte report on the future of credit274, revealed that only in the UK 
credit cards was the most widely used consumer credit product accounting for 35% of the 
consumer  credit  product  mix.  Among  the  six  remaining  Member  States  covered  by  the 
report, credit cards were generally the third most commonly used product after personal 
loans and auto loans, with shares ranging from 16% in Spain and 11% France to only 2% 
in Germany.  

Already cited data from  Eurofinas (0) shows that the weight that credit cards and other 
revolving credit have in the total number of credit agreements signed by their members 
decreased  from  52%  in  2016  to  47%  in  2018,  a  decrease  of  5  percentage  points.  This 
trend, coupled with the simultaneous increase in the number of personal loans and non-
automotive credit at points of sale (PoS) shows some change in consumption pattern of 
credit  in  favour  of  the  latter  two,  though  it  is  not  hard  to  gauge  whether  this  may 
continue.  

The  relative  decline  in  the  use  of  credit  cards  in  the  EU  vis-à-vis  other  products  (as  a 
share in the product mix) was also recently noted in the financial press.275 The number of 
credit cards declined across Europe, with a fall of 3.5 million units in 2019, after a sharp 
rise following the 2008 financial crisis. Some experts claim that while a credit card will 
remain  an  important  product,  also  given  the  fact  that  it  combines  both  a  credit  and  a 
payment facility, it may evolve and become more tailored to a customer’s specific needs, 
an  offshoot  of,  among  other  factors,  the  competition  with  the  P2P  payments  or/and 
digital wallets.276   

Overdrafts and revolving credit other than credit cards 

272 ECB, September 2018, Fifth report on card fraud.  
273 Finance Watch, 2020a, Basic financial services.  
274 Deloitte, 2019.  
275 Realwire, 2020, European card growth slows to 2.7% as digital payments start to bite.  
276 Deloitte, 2019. 

131 

 
 
                                                           
Revolving credit account (excluding credit cards), sets of credit limit, that borrower can 
either  repay  at  the  end  of  each  billing  cycle  or  “revolve”  the  balance  by  making  a 
minimum payment each month. In addition, borrowers must pay a certain amount of fees. 
Revolving credit can be a personal line of credit in an account, from which the borrower 
can  draw  money  up  to  the  credit  limit.  This  type  of  product  offers  great  flexibility  for 
consumers  but  could  entail  high  cost  for  the  borrower  due  to  the  evolving  interest  rate 
and the fees associated.  

Based on a prior agreement, overdraft facilities allow a customer to get automatically a 
short-term  credit  extending  customer’s  ability  to  pay  using  the  current  balance  in  the 
customer's  current  account.  Usually,  overdrafts  entail  high  cost  if  they  are  not  repaid 
within  a  certain  period,  and  unarranged  overdrafts  are  particularly  expensive.  For 
instance, in the UK, for unarranged overdrafts, the price regularly exceeds the equivalent 
of an interest rate of 10% per day and, for 15% of users, over 20% per day. Consumers in 
more deprived areas are 70% more likely to use an unarranged overdraft and pay these 
higher charges, than other consumers.277 If the period exceeds a month, the credit is then 
covered  by  the  CCD.  There  is  limited  EU-wide  data  on  revolving  credits  (other  than 
credit  cards)  and  overdraft  facilities. Concerning  overdraft  facilities,  the  ING  survey 
conducted  in  12  Member  States278  found  that  overdraft  facility  was  the  third  most 
prevalent type of consumer credit product used in these EU countries (an average of 10% 
of respondents declared using this type of product). 

Although  also  limited,  some  national  data  is  also  available  for  certain  countries.  For 
instance, data from the UK showed that 19 million people had an arranged overdraft in 
2017,  while  17  million  used  an  unarranged  overdraft  facility.279  In  France,  there  were 
approximately  30  million  users  of  overdraft  facilities,  with  60%  of  French  people 
overrunning  their  overdraft  authorisation  in  2019.280  It  should  be  noted,  however,  that 
some  proportion  of  consumers  in  each  country  may  still  not  actively  use  an  overdraft 
facility, despite having it available.  

In terms of the outstanding value of overdraft facility per capita, already cited data from 
the  Deloitte  report281  reveals  that  as  of  2018,  overdraft  facility  made  up  30%  of  a 
consumer outstanding debt in Sweden, followed by 16% in Italy and Germany while in 
most of the other countries this share was typically below 10%. In EUR terms, the value 
outstanding overdraft facility ranged EUR 1,131 in Sweden to EUR 144 in the UK.  

As regards to other revolving credit, a London Economics study published in 2014 that 
included  a  consumer  survey  found  that  revolving  credit  (excluding  credit  cards) 
constituted  approximately  3.1%  of  outstanding  value  of  loans  in  the  EU282.  In  spite  of 

277 UK FCA, 2018, High-Cost Credit Review: Overdrafts consultation paper and policy statement. 
278 ING, 2018. The 12 European countries are: UK, NL, DE, SP, BE, AT, IT, FR, PL, CZ, RO, LU.  
279 ICF, 2020, Evaluation of the CCD; FCA, 2018, The financial lives of consumers across the UK. 
280 ICF, 2020, Evaluation of the CCD; Que Choisir [FR], 2019, Overdraft Facility: Excessively Expensive 
Credits 
281 Deloitte, 2019.  
282 London Economics, 2014, Study on The Functioning of the Consumer Credit Market in the EU.  

132 

 
 
                                                           
this  low  share,  revolving  credit  appears  to  be  one  of  the  main  sources  of  concern  for 
consumer organisations283. 

In  France,  revolving  consumer  loans  were  identified  as  a  key  factor  behind  over-
indebtedness  linked  to  credit.  Hence,  it  was  decided,  in  2010,  to  adopt  a  specific  rules 
regarding their provision.284 Since their introduction, the overall value of revolving loans 
in consumption debt fell from EUR 2 500 million in 2010 to nearly EUR 1 000 million in 
2019 and the number of situations where over-indebtedness is related to revolving loans 
decreased by 47% during the same timeframe.285 

Pawnshops 

Pawnbroking  agreements  are  common  among  consumers  in  some  Member  States.  In 
Greece, the number of pawnshops increased between 2008 and 2013.286 Italy has recently 
seen an increase in this activity by 20-30% following the lockdown as many individuals 
had  experienced  or  anticipated  a  decrease  in  their  income.287  According  to  a  review 
conducted by the UK Financial Conduct Authority, an estimated 350000 customers enter 
in pawnbroking agreements in the UK every year, based on the figures provided by the 
firms answering to their survey (which represent 70% of the total). 

Student loans 
Finally,  a  2018  survey  from  ING288  revealed  student  loans  are  commonly  used  in 
countries like Luxembourg (12% of the households’ debt portfolio), in the UK (8%) and 
the  Netherlands  (7%).  However,  in  other  Member  States  including  Central  and  Eastern 
Europe  region  this  type  of  credit  represents  a  very  small  fraction  of  households’  debt 
portfolio. This difference can be explained by, among other factors, the specific funding 
structure educational institutions in the continental Europe where most of the universities 
are financed directly by public funds (through taxes) which entails small/no charge fees 
for students.  

Auto loans 

283 ICF, 2020, Evaluation of  the CCD; BEUC, 2019, Review of the  Consumer Credit Directive  – BEUC 
Position;  El  Pais  [ES],  2019,  La  usura  de  las  tarjetas  ‘revolving’  estalla  en  los  tribunales;  Speaker 
representing a consumer organisation at the CCD event. 
284  The  specific  framework  includes:  harmonised  denomination  (“crédit  renouvelable”);  specific  selling 
rules,  i.e.  the  borrower  must  be  offered  the  choice  between  revolving  and  instalment  loan  whenever  the 
amount  of  the  operation  exceeds  EUR  1 000;  maximum  duration  of  36  months  when  the  amount  is  less 
than or equal to EUR 3 000 and of 60 months when the amount exceeds EUR 3 000; each installment must 
reimburse  a  predefined  fraction  of  the  initial  capital,  and  the  law  sets  a  minimum  amount  for  each 
installment; in case a renewable credit is not used by a customer for one year, the contract is automatically 
put on hold by the creditor and terminated after another year. LOI no 2010-737 du 1er juillet 2010 portant 
réforme du crédit à la consommation. 
285 National authority.  
286 CIVIC Consulting, 2013. 
287 ICF CCD Evaluation, 2020. 
288  ING  International  survey  February  2018  “Saving  comfort  –  a  path  to  happiness.  Examining  money 
choices in Europe, USA and Australia” – extracted from the report Finance Watch “Is the human dignity of 
individual debtors at risk?”, 2020d. The 12 European countries are : UK, NL, DE, SP, BE, AT, IT, FR, PL, 
CZ, RO, LU.  

133 

 
 
                                                           
According to the Eurofinas’ data,289 the share of auto loans for personal use (that includes 
leasing agreements) in all new loan agreements remained stable over the period 2012-19. 
In  2019,  it  represented  33%  of  consumer  credit  agreements  (and  25%  of  all  loans) 
granted by Eurofinas members. The data compiled from the Member States covered by 
the  study  revealed  that  auto  finance  is  a  widely  used  consumer  credit  product.  Similar 
trend  in  data  –  albeit  with  variations  across  countries  –  were  reported  by  Deloitte.  The 
share of consumer credit in the product mix290 allocated to the purchase of cars in 2018 
represented 22% in France and 33% in Germany.  

Figures  collected from Eurofinas members also  suggest  that the car lending market  has 
performed well in the recent years, showing rather healthy growth rates since 2012 (0). In 
2018,  sales  in  the  used  and  new  cars  segments  increased  by  10.8%  and  5.5% 
respectively.  

Figure 18: Consumer car finance (new lending) for used and new cars – annual growth rate in % 
(end of the year) 

Source: ICF, based on Eurofinas 2018, Facts and Figures. 
NB: Figures are adjusted to exclude the impact of exchange rate fluctuations.  

The  fast  expansion  of  this  segment  of  consumer  credit  was  also  noted  by  the  ECB  in 
2017.291 In a note analysing the trends in the consumer credit market, the ECB stated that 
recent developments in the consumer credit market were strongly driven by the purchase 
of new cars.  

Although the available data does not allow to gauge the way how the market will evolve 
over the next decade, it is expected that the COVID-19 pandemic will have a significant 

289 Eurofinas, Credit Facts and Figures. Available at: http://www.eurofinas.org/index.php?page=key-facts-
figures. 
290  Credit  cards,  personal  loans,  overfat  facilities,  PoS  finance,  motor  finance  and  others.  See  p.15  of 
Deloitte, 2019.  
291 ECB, 2017, Recent trends in consumer credit in the euro area available.  

134 

 
 
 
                                                           
impact  on  the  sector.  European  Automobile  Manufacturers  Association  expect  a  record 
25% fall in sales in 2020.292 

Leasing agreements 

Leasing is an alternative way of financing whereby a customer (the ‘Lessee’) purchases 
an  asset  from  the  seller  (the  “Lessor’)  in  return  for  a  contractually  agreed  series  of 
payments which usually include an element of interest. The lessor maintains ownership 
of  the  asset  while  the  lessee  enjoys  the  use  of  the  asset  for  the  duration  of  the  lease 
agreement,  usually  accompanied  by  an  option  to  buy  the  asset  at  the  end  of  the 
contract293.  

Currently,  only  those  leading  agreements  that  oblige  the  consumer  to  acquire  the  good 
upon expiration of the contract are covered by the Directive, as per Article 2(2)(d). 

Leasing agreements in  a consumer market  often span between 2 and 5  years. The have 
been used for a wide range of products with cars and home-appliances being particularly 
common products. In consumer’s goods market, they are commonly provided directly by 
the distributor of a good rather than by bank or other financial intermediary.   

Leasing agreements have seen rapid growth in the EU in recent  years. This is partly on 
the back of the growing popularity of leasing agreements used in the automotive sector294 
and  this  trend  is  expected  to  continue  with  vehicle  leasing  market  projected  to  grow  at 
CAGR  3%  (or  by  circa  EUR  50  billion)  between  2020-2024,  despite  the  impact  of  the 
pandemic295.  In some Member States, the leasing  market  has  grown particularly  fast in 
the last decade. For instance, between 2008 and 2019, France saw the number of leasing 
transactions increasing by 256%296 and in 2016 the value of approved leasing agreements 
for  purchase  of  cars  reached  EUR  500  million  and  surpassed  the  value  of  classic  car 
loans.297  In addition,  while between July 2019  and  July 2020 the value of  classic auto-
loans in France increased by 2% on the y-o-y basis, the value of leasing agreements for 
cars over the same period rose by 25%.298  

Even  in  cases  where  a  leasing  agreement  envisages  a  purchase  of  an  asset,  Finance 
Watch  estimates  that  hire  purchase  currently  represents  around  12%  of  the  total  credit 
provided to households, although it accounts for more than double of this percentage in 
New Member States.299  

Free interest rate loans 

292  European  Automobile  Manufacturers  Association,  2020,  EU  car  sales  forecast  2020:  record  drop  of 
25% expected this year, says ACEA.  
293 Deloitte, 2017. Banking and Financial Services – Finance Leasing.  
294 ICF, 2020, CCD Evaluation.  
295 Research and Markets, May 2020. Vehicle Leasing Market in Europe.  
296 Que Choisir [FR], 2019, Leasing, a Massive Degradation of Borrowers Rights.  
297 Challenges, 2017. Le leasing, le produit financier qui relance les ventes d’auto.   
298 Association Française des Société Financières, July 2020. Légère hausse de l’activité en juillet (+1.8%), 
mais d’importantes disparités sectorielles.  
299  This  could  be  both  linked  to  different  levels  of  household  indebtedness,  to  the  size  of  the  mortgage 
credit market (see housing loans section), as well as credit culture differences between older and newer EU 
Member States. 

135 

 
 
                                                           
Free interest rate loans are not captured within the scope of the Directive, as per Article 
2(2)(f).300 These are generally used to finance the purchase of products such as household 
appliances, in the form of point of sale financing, concluded between the consumer and 
the  retailer  selling  the  good,  with  the  latter  acting  either  as  a  credit  provider  or  credit 
intermediary.  The  decline  in  interest  rates  since  the  entry  in  force  of  the  Directive 
favoured the expansion of this business model as offering a “free credit” costs less to the 
credit provider. 

In  recent  years,  ‘Buy  Now  Pay  Later’  (BNPL)  products  have  emerged.  These  are 
interest free short term loans that allow consumers to delay paying for items or to spread 
the cost of purchases. Their business models rely on merchant fees paid by the retailer. 
BNPL providers such as Klarna,301 Scalapay, TwistoPay or Alma, offer their products on 
the merchant’s digital platforms to provide seamless consumer journeys or through apps 
to  be  used  for  payments  in  stores.  These  products  are  popular  among  younger 
consumers302  and  are  often  seen  by  consumers  with  a  poor  credit  history  or  thin  credit 
files  as  a  viable  alternative  to  more  traditional  forms  of  regulated  lending.  Some 
consumers  in  financial  distress  during  COVID-19  use  BNPL  products  to  manage  their 
finances. Many consumers seem not to realise that this product is credit. 303 

Interest free credit agreements can entail risks for consumers. In fact, although they may 
appear as having low or no costs linked to them (they are often presented as ‘0% interest 
rate’    offers),  the  underlying  business  model  for  offering  such  loans  is  often  based  on 
high fees for late or missed payments, aspects frequently ignored by consumers.304 305 

The risk lies in the fact that consumers are often poorly informed about the conditions of 
the  credit,306  which  are  also  often  very  strict,  and  that  they  promote  quick  decisions 
taking  advantage  of  behavioural  biases  (such  as  present  bias  because  the  benefit  of 
deferred payments are presented but not potential future implications)307. Such financial 
products  put  people  at  risk  of  taking  on  commitments  that  they  may  not  be  able  to 
honour.308  

The data available does not allow to estimate the exact extent to which interest free loans 
are used across the EU, but Eurofinas309 data on the magnitude of point of sale financing 
suggests that they became relatively common in the last decade. In 2019, this represented 
14%  of  the  volume  of  newly  granted  consumer  credit  from  Eurofinas  members.  An 

300 Depending on whether there are considered to be without ‘charges’ or ‘insignificant charges’. 
301 In December 2020, Klarna was Europe’s highest valued private fintech company. 
302 Data provided by some BNPL providers indicates that in the UK 25% of users are aged 18-24 and 50% 
are aged 25-36. UK FCA, 2021. 
303 UK FCA, 2021. 
304 ICF, 2020; EBA, 2019a. 
305 For ‘buy now pay later’ providers that charge late payment fees the revenue from such fees can make up 
a significant portion of the firms’ overall revenue. UK FCA, 2021. 
306 In case of low fees, for instance, they are usually mentioned by the retailer but not provided in an APR 
calculation. 
307 UK FCA, 2021. 
308 Eurofound, 2020a. 
309  Eurofinas  represents  specialised  consumer  credit  providers  in  Europe.  In  2019,  loans  granted  by 
Eurofinas members represented 45% of outstanding consumer credit in 14 Member States. 

136 

 
 
                                                           
indication  of  concern  at  national  level  around  this  kind  of  credit  agreements  is  the 
decision  of  certain  Member  States  (e.g.  Germany)  to  apply  some  of  the  Directive’s 
provisions such as the right of withdrawal to all consumer credit, regardless of whether 
an interest rate is charged.310  

Green loans 

Green loans were initially introduced as a government initiative that meant to encourage 
individuals  to  make  more  energy-saving  improvements  of  their  homes.  They  can  be 
used for energy efficient home renovation, insulation work, to purchase and install solar 
panels or installation of heat pumps, or for roofing costs.311 

While the definitions of green loan may still vary, one commonly accepted is that green 
loan is lending which is subject to certain environmental criteria.312 More specifically, a 
consumer’s  eligibility  for  green  loans  is  usually  tied  to  the  compliance  with  detailed 
technical eligibility criteria313 including minimum targets in energy savings achieved as a 
result of improvement works on a property.  

The underlying principle behind green loans is that their repayment is facilitated by the 
savings  in  energy  bills  generated  thanks  to  the  improvement  in  a  property  energy 
efficiency  parameter  that  was  in  turn  financed  (partly  or  in  full)  by  the  green  loan. 
Typically,  green  loans  can  be  either  a  stand-alone  product  or  built  in  the  mortgage 
product.  

The global lending volume in green loans has been rising rapidly. Only between 2014 
and  2018  it  increased  more  than  threefold  from  EUR  13.5  billion  in  2014  to  EUR  48 
billion  four  years  later,314  though  some  of  it  corresponds  to  the  corporate  rather  than 
consumer lending. In Europe, the green loan market as of mid-2018, and as estimated by 
Thomson Reuters, hovered around EUR 19 billion.315  

However, the demand for green loans is not geographically homogenous and variations 
between  different  Member  States  exist.  There  is  no  comprehensive  data  on  the 
outstanding  value  of  green  loans  held  by  consumers,  but  Germany,  France,  Italy  and 
Scandinavia  are  among  the  largest  markets  in  the  EU.  Cultural  and  social  habits  may 
explain  this  variation,  though  some  governments  have  also  been  also  more  pro-active 
than  others  in  promoting  green  loans.316  More  generally  though,  it  is  expected  that 
consumer’s  demand  for  green  loans  in  the  EU  will  see  a  rapid  rise,  irrespective  of  the 
temporary impact of COVID-19 pandemic. On the supply side, there has been a steady 
rise in number of retail banks across the EU offering green loans to consumers,317 a trend 

310 ICF, 2020; Finance Watch, 2018 and 2019. 
311 Financer.com, 2020. Green Loan Options.  
312 See for instance Green Loan Principles published by Loan Market Association.  
313 European Commission, 2017. Defining ‘green’ in the context of green finance.  
314 LBBW, 2020. Shades of green.  
315 Allen & Overy, June 2018. Sustainable lending: a new shade of green.  
316 Eurofinas, 2020. Green credit.  
317 See for instance, DB, February 2020. Deutsche Bank is the leading green consumer finance operator in 
Italy.  

137 

 
 
                                                           
that  is  expected  to  continue,  also  given  a  booming  value  of  available  public  funding 
directed towards green investment in the coming years.  

The  Commission  Renovation  Wave  Communication318  presents  a  strategy  to  make 
homes  for  consumers  fit  for  a  greener  and  digital  society,  including  strengthened 
information  tools  for  consumers.  It  stresses  that  the  Commission  will  strengthen  the 
access to attractive private financing through the Renewed Sustainable Finance Strategy.  

In spite of rapid growth of the market, green loans still account for only a fraction of the 
outstanding debt of households at the moment. There is no available data on the average 
value of a green loan but those will be typically higher than consumption credit and, in 
some cases, may exceed EUR 75 000. 

In  terms  of  the  costs  of  green  loans,  it  is  not  unusual  that  under  certain  conditions 
governments  may  offer  some  advantages  such  as  a  reduction  of  interest  (interest 
subsidy),  and/or  a  tax  cut  on  interest  paid  by  the  borrower.319  Maturities  of  such  loans 
will  be  also  relatively  long.  The  structure  of  this  product  may  also  differ.  Some  green 
loans  may  require  full  repayment  from  the  energy  savings  taking  place,  in  other  cases 
green  loans  may  provide  an  incentive  in  a  form  of  preferential  tax  treatment  of  an 
investment.  

In  its  recent  opinion  on  the  European  Green  Deal  and  green  loans  specifically,  BEUC 
argued that: “[…] Annual Percentage Rate for green loans should be much lower than for 
regular  loans.  These  products  should  be  conditional  on  achieving  energy  performance 
and comply with responsible lending principles, i.e. no aggressive marketing of loans to 
consumers  and  loan  underwriting  standards  based  on  the  strict  assessment  of  the 
borrower’s creditworthiness”.320 Consumer credit at value below EUR 200 

The evidence gathered suggests that credit below the minimum threshold of the Directive 
is  uncommon  in  many  Member  States,  but  not  in  others.  Among  the  stakeholders 
answering  to  the  survey,  around  a  half  of  respondents  across  all  stakeholder  groups 
agreed with this statement,321 while only stakeholders from nine countries disagreed (i.e. 
Bulgaria, Czech Republic, Cyprus, Finland, Poland, Portugal, Sweden and the UK). The 
low  number  of  such  contracts  in  some  Member  States  is  corroborated  by  national  data 
provided by  Belgium, which shows that the number of  agreements for consumer credit 
below EUR 213.19 is the lowest, by far, among all categories (187 contracts concluded in 
the  second  semester  of  2019,  while  the  average  for  all  categories  exceeds  28000 
agreements).322  The  low  number  of  small  loans  in  Belgium  is  attributed  to  the 
establishment of a lower cap for monthly fees that can be charged (from EUR 50 to EUR 
4.85),  which  seems  to  have  had  a  negative  impact  on  credit  providers  offering  payday 
loans.  Similarly,  financial  authorities  in  Sweden  and  Netherlands  has  decided  to  set  up 

318 COM(2020) 662final. 
319 Ibidem 
320 BEUC, March 2020. Consumers at the centre of the drive to sustainability.  
321  Survey  for  business  associations  (10  out  of  21  respondents),  consumer  organisations  (6  out  13 
respondents), national authorities (13 out of 37 respondents). 
322 
https://statbel.fgov.be/fr/themes/entreprises/credit-la-consommation#panel-12  

Available 

Nombre 

contrats 

conclus 

Statbel, 

2019. 

T4 

de 

at: 

138 

 
 
                                                           
interest rate caps and obliged foreign credit providers to comply with it, while in France 
and Italy, usury laws have prevented the development of this market segment.  

Views on recent trends of this type of credit differed slightly across stakeholder groups. 
If most industry representatives do not expect it to increase in the coming years, one third 
of national authorities and around half of consumer organisations disagree with them.323  

4.  Evolution of interest rates on consumer credit 

Interest  rates  on  consumption  loans  and  revolving  credit  and  overdrafts  have 
gradually  dropped  since  aftermath  of  the  crisis  (though,  not  immediately)  across  the 
whole  Eurozone  with  interests  rates  on  credit  for  consumption  and  revolving  credit 
oscillating around 5% in  2020, down from 7.8% in  2008 and 8% in  2010, respectively 
(0). This has been driven by, among other factors, an improvement in the macroeconomic 
environment  in  the  Eurozone  that  translated  also  into  reduction  in  unemployment  rates 
(and improvement in consumer credit profiles), as well as improvement in the liquidity 
conditions on the markets that were propped by the ECB Quantitative Easing operations 
which  in  turn  pushed  the  interest  rates  down.  Likewise,  consumers  in  non-Eurozone 
Member  States  have  also  enjoyed  a  steady  fall  in  interest  rates  on  consumer  credit 
products over the recent years, albeit the average cost of consumption loan or credit card 
in Poland or Romania still exceeds the interest rates on comparable products in most of 
the  Eurozone  countries.  Note  that  as  oppose  to  credit  for  consumption  and  revolving 
credit  and  overdraft  categories,  interest  rates  on  credit  cards  fell  only  to  a  very  limited 
extent.  In  the  EBA  2020/2021  Consumer  Trends  Report,  it  is  mentioned  that  several 
stakeholders reported that, because of the current economic scenario characterised by low 
interest  rates,  banks  are  currently  competing  for  market  share  and  running  aggressive 
marketing practices. This should draw more attention towards the topic of indebtedness 
responsible lending and creditworthiness assessment in the near future. 

Figure 19: Interest rates for consumption and revolving credit, Eurozone 

323 Survey question:  “Increase in consumer credit not covered by the  current  CCD (e.g. short-term  high-
cost credit below €200, zero interest rate loans)” : Credit providers (0 out of 14), Business Associations (2 
out of 21), Consumer organisation (5 out of 12) and National authorities (12 out of 37).  

139 

 
 
                                                           
Source: ICF, based on ECB data 
[MIR.M.U2.B.A25.I.R.A.2250.EUR.O;MIR.M.U2.B.A2Z1.A.R.A.2250.EUR.N]. 
Note: *data on revolving credit and overdrafts not available for 2008-2010. Value for every 
year: end of the month of June.  

5.  Share of banks and non-banks in consumer debt 

Following  the  Great  Financial  Crisis,  the  banking  sector  in  the  EU  saw  a  wave  of 
unprecedented  restructurings  involving  some  recapitalisations  and  resolutions  (e.g. 
particularly large in Greece, Spain, Ireland and Cyprus), gradual clean-up of the balance 
sheets  and  followed  by  increase  in  capital  buffers  driven  also  by  higher  capital 
requirements. As a result, number of credit institutions (CIs) in the EU-27 shrank from 
7,111 to 5,490 (or by 23%), according to the ECB data. Most of the CIs are conventional 
retail  banks,  though  in  some  countries  like  Austria,  Germany  and  Poland,  there  is  also 
considerable number of smaller cooperative and saving banks (0).  

Figure 20: Number of credit Institutions in the EU, 2010-2020 

140 

 
 
 
Source: ICF, based on data from ECB Statistical Data Warehouse 

The category of non-bank lenders includes a rage of entities from peer-to-peer lenders 
through national lending companies to small high street lending focusing on a particular 
type  of  consumers  or  regions.  By  definition,  and  unlike  banks,  they  are  not  allowed  to 
take  private  deposits  and  then  pass  some  of  those  funds  on  to  market  in  the  form  of 
consumer credit. They are also smaller than banks. The non-bank lenders can be subject 
to  different  regulations324  than  banks  and  due  to  their  way  of  operating  can  be  more 
flexible  in  their  approach  to  lending  including  tailoring  their  loan  products  to  suite 
customer  preferences.  Yet,  their  business  models  are  also  typically  more  vulnerable  to 
cyclical  changes  in  the  economy  (including  COVID-19  induced  shock  increasing 
consumer defaults) than banks. 

The survey conducted among national authorities, allowed us to collect evidences on the 
share  of  non-banks  credit  institutions  in  several  members  states.  The  data  gathered 
highlighted  the  consumer  credit  market  is  mainly  driven  by  banks.  However, 
consumer lending is provided extensively also by non‑ banking financial companies, 
with  peer-to-peer  lending  expected  to  increase  considerably  in  the  near  future  (see 
below).  In  Spain,  the  share  of  banks  amounts  75%  while  non-banks  credit  providers 
represent only 25%, as well in Slovakia where the banks made up 85% of the market and 
the non-banks 15%, and Romania, which has a credit market owned 88% by banks and 
12% by non-banks providers. It is worth nothing that according to a Lithuanian authority, 
the share of non-banks in the country is  around  the same as the share of banks.  Latvia 
stands  out,  with  a  volume  of  new  loans  to  consumers  higher  in  the  non-banking  sector 
than in the traditional banking one.  

324  For  instance,  in  some  Member  States  (e.g.  Poland)  non-bank  lenders  need  to  meet  certain  minimum 
requirements (e.g. minimum company’s capital) in order to register its operations with national supervisory 
authorities. Yet, those are far less demanding then requirements  stemming  from a banking license  in the 
EU.   

141 

 
 
 
                                                           
In addition, according to the ECB, the share non-bank lending to households in the euro 
area  grew  from  4.2%  in  2010  to  5.4%  in  2016,  though  with  wide  differences  among 
countries remaining in place (0). While these figures suggest that the lending market still 
remains  dominated  by  banks,  it  is  important  to  note  that  they  also  include  mortgages. 
Therefore,  the  share  of  non-bank  consumer  lending  should  be  expected  to  be  higher, 
especially  as  it  has  seen  a  dynamic  growth  over  the  recent  years.  Products  on  offer  at 
non-bank  lenders  can  be  different,  though  there  is  no  hard  data  available.  Interviews 
carried  out  for  the  study  supporting  the  impact  assessment  show  that  non-bank  lenders 
are more likely to service consumers that cannot be serviced by regular banks or are not 
commercially  interesting  for  banks  due  to  the  products  consumers  might  be  after.  It 
showed  that  non-bank  lenders  had  slimmer  operating  margins  and  did  offer  credit 
products  with  reduced  margins.  In  some  countries  these  included  short-term  high-cost 
credit. According to the Slovak Association of non-bank lenders (APSU), more than 20% 
of the loans provided by non-bank lenders in Slovakia is less than EUR 100.325 However, 
national legislation through interest rate caps meant a reduction of such loans in countries 
like Finland, Slovakia and Lithuania, making it difficult to operate for non-bank lenders. 

Figure 21: Share of non-banks in domestic long-term household lending (including mortgages) in 
selected euro areas countries (In percentage). 

ICF,  based  on  data 

sector  accounts  2010-2016 
Source: 
Notes: Non-bank lending refers to total economy lending minus loans from Monetary Financial 
Institutions and Other Financial Intermediaries (except investment funds). In the case of Austria, 
the high share of non-bank lending refers to the state and not to insurance companies.  

from  ECB  Quarterly 

Possible changes on the consumer credit market going forward 

This section outlines two specific factors that will shape the consumer credit market over 
the  next  years  namely,  impacts  of  COVID-19  and  changes  brought  by  the  process  of 

325 APSU, Clients of non-banking companies - Computer Assisted Web Interviewing, 2019. 

142 

 
 
 
                                                           
digitalisation in the financial sector. Both affect, inter alia, the baseline scenario used for 
the estimation of costs and benefits stemming any prospect CCD revisions.  

1.  Impact of COVID-19 

Ramifications  of  COVID-19  for  the  EU  economies  and  consumer  credit  markets  more 
specifically are inherently difficult to gauge. This is not only because the data on the type 
and  magnitude  of  this  shock  is  still  not  comprehensive,  but  also  because  the  crisis  is 
dynamic and its duration and level of impact hinges on a number of critical assumptions 
including  evolution  of  infection  rates,  the  toolbox  of  policy  responses  that  will  be 
deployed  by  the  EU  itself  and  its  Member  States  specifically  or  possible  economic 
distortion of the level playing field of the Internal Market, to mention only a few. 

So far among sectors of the economy that have been affected most during the initial stage 
of  COVID-19  crisis  have  been  those  that  rely  most  on  the  human  interaction  such  as 
tourism,  transport,  retail  and  hospitality.  The  fall  in  consumer  confidence  and 
consumption  during  the  peak  of  the  lockdown  in  most  of  the  EU  in  March,  April  and 
May  bounced  back  to  some  degree  since  then  but  some  lower  spending  will  continue 
even after lockdowns are relaxed e.g. due to consumer caution and structural changes in 
consumption  patterns326.  The  true  economic  impact  of  COVID-19  will  take  time  to 
emerge. For instance, bankruptcy numbers may start to rise only later with considerable 
implications for banks’ balance sheets,  albeit in  general European banks are way better 
prepared  than  during  the  past  crisis  -  so  far  capital  buffers  have  been  sizable327  and 
liquidity remains ample328 - and therefore implications for the supply of consumer credit 
may be less severe329. For the past few months, EU economies were also supported up by 
an  unprecedent  level  of  economic  support  packages.  In  the  EU  five  largest  economies, 
one in five employees has been on public temporary unemployment schemes where the 
state pays some share of wages330. It is only when this support is gradually withdrawn the 
wider cost of COVID-19 will appear. The initial data shows that low-paid workers rather 
than  ‘white-collar’  jobs  (who  can  work  from  home)  have  been  particularly  affected. 
Redundancies figures start to confirm that and signs of increasing challenges in repaying 
the credit may appear in this subset of consumer’s segment first331. The longer it will take 
to  wait  for  a  vaccine  or  effective  treatment,  the  more  pronounced  the  effect  on  the 
economy and hence consumer credit will be. 

One way of approaching the issue of potential impact of COVID-19 on the demand and 
supply  of  consumer  credit  is  to  look  at  relevant  theory  and  economic  and  financial 
literature focusing on the conventional response of consumer credit markets to economic 

326 IMF, April 2020, WEO projections.  
327  CET 1 ratio  at  almost  15%  in  December  2019  cf  9%  in  December  2009  according  to  the  latest  EBA 
stress-tests from Spring 2020 
328 LCR at 150% in December 2019. 
329 S&P, June 2020, Credit Conditions in Europe: Curve flattens, recovery unlocks.  
330 Economist, 2020. 
331  Finance  Watch,  2020b,  Coronavirus:  a  dangerous  wave  of  personal  over-indebtedness  is  on  its  way: 
here is how to avoid it.  

143 

 
 
                                                           
shocks such as recession, for instance in relation to Global and Financial Crisis (GFC),332 
as  well  as  some  relevant  data  analysis  drawing  on  key  lessons  from  the  past  financial 
crisis  in  terms  of  impacts  and  trends  that  shaped  consumer  credit  markets.  Besides, 
already available ‘early’ data on the impact of COVID-19 on the real economy and credit 
markets  specifically,  also  provides  some  useful  insights  for  the  development  of  the 
baseline scenario. 

Economic  and  financial  literature  on  impact  of  recession  on  consumer  credit 
markets 

In  terms  of  economic  and  financial  literature  focusing  on  the  conventional  response  of 
consumer credit markets to major past economic shocks, including the recent GFC, there 
are some general emerging findings. 

Generally,  economic  theory  suggests  that  negative  shocks  to  the  economy  may  follow 
different patterns (albeit of course there would be considerable variations depending on 
the nature of the shock). Firstly, a fall in  aggregate demand leads to  a fall in  profits of 
firms which then translates into an increase in number of firms struggling to repay their 
loans  (e.g.  business  NPLs  go  up).  Firms  respond  with  the  cuts  of  their headcounts  that 
subsequently  results  in  a  rise  in  unemployment.  This  in  turn  translates  into  a  rise  in 
number  of  consumers  who  also  struggle  to  meet  their  debt  repayment  obligations  in  a 
timely  manner,  or  pay  their  debt  all  together  (e.g.  consumer’s  credit  NPLs  goes  up). 
Consequently,  the  quality  of  loans’  portfolio  of  lenders  deteriorates.  Banks  may  also 
respond by tightening of conditions of consumer credit333 and increasing the interest rates 
to  price  in  the  elevated  level  of  risk  –  a  response  that  eventually  leads  to  reduction  in 
supply and demand for consumer credit.   

Numerous  studies  have  documented  that  recoveries  after  financial  crises  –  particularly 
after  credit  fuelled  booms  and  busts  –  are  often  weak  and  sluggish  as  they  give  rise  to 
creditless recoveries. Economic theory has long recognised that recoveries from financial 
boom-bust episodes are  weaker and take longer than other recoveries  as  borrowers and 
lenders’  over-leveraged  balance  sheets  need  time  to  adjust.334.  For  instance,  Abiad, 
Dell’Ariccia,  and  Li  (2011)335  found  that  about  one  in  five  recoveries  over  the  period 
1964–2007 were creditless and weaker than normal recoveries. Dahlhaus (2011)336 also 
found  that  the  incidence  of  creditless  recoveries  doubles  after  a  banking  or  currency 
crisis,  and  that  these  recoveries  are  weaker  when  major  balance  sheet  readjustment  is 
needed  after  a  shock.  In  this  respect,  the  difference  between  GFC  and  the  current 
COVID-19 induced crisis is clear, suggesting potentially quicker recovery following the 
latter. 

332 It should be noted that at this point in time, the COVID-19 crisis is very different to GFC, notably in 
relation to the pre-existing situation the circumstances leading to them as well as on the distribution of the 
impact among population groups (Interview with EU-level representative).  
333 Such as maximum loan size available, maturity or collateral requirements. 
334 IMF, 2017, Credit Growth and Economic Recovery in Europe after the Global Financial Crisis.  
335 Abiad, Dell/Ariccia and Li, 2011, What have we learnt about creditless recoveries.  
336 Dalhaus, 2011, Determinants of creditless recoveries.  

144 

 
 
                                                           
Furthermore,  Everaert  et  al.  (2015)  analysed  demand  and  supply  of  credit  in  selected 
Central,  Eastern,  and  South-eastern  European  (CESEE)  countries  before  and  after  the 
GFC. They found that the importance of demand and supply factors vary widely between 
countries.  IMF  (2015B)337  notes  that  recoveries  in  many  CESEE  countries  were  held 
back by weak corporate and household balance sheets. Gaspar et al. (2016)338 argued that 
a successful restart of credit flows calls for a concerted policy package that relieves the 
binding constraints on credit extension, often in a complementary manner. 

The  IMF  research  on  the  post  GFC  recoveries  in  Europe  revealed  that  a  10  percent 
increase in bank credit to the private sector is associated with a rise of 0.6–1 percent in 
real GDP growth and 2–2.5 percent in real private investment growth339. 

In  terms  of  demand  for  specific  consumer  credit  products  following  a  crisis,  the  data 
from the US consumer credit market from the midst of the 2008 crisis and ten years later 
shows relatively few changes. Credit cards remain the most ubiquitous credit vehicle, and 
while  originations  were  noticeably  lower  soon  after  the  GFC,  they  have  recovered  in 
recent years to 2008-levels as lenders have provided more access to credit. Furthermore, 
mortgage  origination  dropped  dramatically  during  the  last  decade,  whereas  both  auto 
loans and unsecured personal loans have grown significantly340. Also, delinquency rates 
increased swiftly during the first 2 years of the crisis, though at various rates across the 
products. As of end-2008, the highest delinquency rate was seen for unsecured personal 
loans  (4.54%)  and  mortgages  (3.87%),  while  those  for  credit  cards  (2.71%)  and  auto-
loans (1.26%) were lower341. 

The current  crisis  is  fundamentally different  from  the GFC since it did  not  originate in 
the financial sector. In the first months, the financial system was able to absorb part of 
the shock coming from the real sector. Banks did not reduce the availability of loans for 
companies and households, whose access to credit was eased by public measures as state 
guarantees  or  moratoria.  However,  the  drop  in  consumption  mechanically  reduced 
demand for consumer lending. As long as banks are not affected by contagion from the 
real sector, the credit offer should not be substantially reduced. 

Generally,  consumer  lending  is  procyclical  and  is  highly  positively  correlated  with 
households’  disposable  income.  The  literature  also  shows  that  the  higher  the  level  of 
households  indebtedness  on  the  onset  of  the  crisis  the  higher  is  the  credit  constraint 
following it.342  

Data on the impact of 2008 GFC on the consumer credit market 

In terms of the evolution of the consumer credit market following the previous GFC, the 
trends discussed under the above section on the  evolution  of the consumer credit show 
that it is likely that a number of key parameters such as volume of outstanding consumer 

337 IMF, 2015, Mind the credit gap.  
338 Gaspar et al, 2016. Macro-economic management when policy space is constrained. 
339 IMF, 2017. Credit Growth and Economic Recovery in Europe after the Global Financial Crisis 
340 GlobeNewsWire, 2018, Financial Crisis- 10 years later. Consumer Credit Marketon an upward curve.  
341 GlobeNewsWire, 2018, Financial Crisis- 10 years later. Consumer Credit Marketon an upward curve.  
342 ECB, June 2020, Indebtedness and spending: what happens when the music stops?  

145 

 
 
                                                           
credit,  share  of  consumer  credit  as  percentage  of  private  consumption  and  households 
indebtedness  level  will  follow  a  downward  trend  as  a  result  of  the  COVID-19  induced 
shock. The crucial question is how pronounced the decline will be and how long will it 
last (see discussion below).  

Most recent data on the impact of COVID-19 on the consumer credit market 

The most recent  data on the impact  of COVID-19 provides a handful of key indicators 
that have broken some ground in offering insights into the magnitude of the shock. 

For instance, the most recent ECB Bank Lending Survey (BLS) published in July 2020343 
indicates that crediting standards for consumer credit tightened already in Q1 2020 and 
deteriorated further in Q2 2020, mainly on account of precautionary savings344 and low 
spending possibilities during the strict lockdown period and worsening economic outlook 
affecting,  among  other  elements,  consumer  confidence,  borrowers’  creditworthiness  hit 
by  uncertainty  in  employment  situation.  In  Q2  2020,  net  26  per  cent  banks345  in  the 
Eurozone  reported  tightening  of  credit  standards  while  net  76  per  cent  observed  fall  in 
consumer credit demand (see 0). The rejection rate for consumer credit also increased by 
15 per cent in Q2 2020. Going forward, banks expect a continued net tightening of credit 
standards and a rebound in household loan demand in the third quarter of 2020.  

Figure 22: Net percentages of banks reporting a tightening of credit standards or an increase in 
loan demand, 2020.  

Source: ECB BLS, Q2 2020 

By end-March, delinquencies had not yet increased and very few loans were placed in the 
potentially  vulnerable  category.  All  Member  States  had  then  triggered  measures 
protecting households’ revenues such as short time working schemes and some Member 
States have included households in the scope of debt moratoria. Yet, most banks already 
set  aside  sizable  provisions  in  the  first  quarter,  anticipating  a  reduction  in  customer 

343 ECB, June 2020, Q2 Bank Lending Survey.  
344 European households have been saving up since the corona virus pandemic hit the economy. Yet, it is 
not  fully  clear  whether  the  money  represents  pent-up  consumer  demand  that  is  itching  to  be  spent  as 
lockdowns  are  lifted,  known  as  involuntary  savings,  or  a  safety  net  put  aside  by  households  to  insure 
against  uncertain  times  ahead,  referred  to  as  precautionary  savings.  See  for  instance,  Financial  Times,  5 
July, 2020. Soaring saving rates pose policy dilemma for world’s bankers.  
345 Relates to ‘net percentage’ – net difference between banks that reported tightening and easing of credit 
standards 

146 

 
 
 
                                                           
repayment  capacity,  but  the  wide  variability  in  the  size  of  upticks  in  provisioning 
suggests that there is more to come346.  

More generally, there has been consensus that the maximum impact of the pandemic on 
economic  activity  would  fall  in  the  second  quarter  of  2020  with  subsequent  quarters 
showing  some  signs  of  recovery347.  The  impact  on  delinquencies,  and  therefore  on  the 
capacity of banks to provide new loans, could be protracted if moratoria and guarantees 
were extended in the first months 2021. 

Impact of COVID-19 on the type of consumer credit products offered or purchased 

The  recent  McKinsey  report  estimates  that  the  demand  for  consumer  credit  in  2020  in 
Europe  may  fall  by  circa  22%  due  to  increase  in  discretionary  savings,  and  tighter 
consumer  credit  standards  and  subdued  demand  of  households  due  to  lock-downs  and 
consumption smoothing.348 

There  is  limited  disaggregated  data  on  how  the  demand  for  specific  types  of  consumer 
credit  products  may  react  as  a  result  of  the  crisis  caused  by  COVID-19,  though  some 
recent  data  from  the  US  shows  that  demand  for  credit  cards  (traditionally  the  most 
volatile part of consumer debt349) and consumer loans have been most severely hit so far 
(0). 

Figure 23: Household demand for consumer credit products, US market 

Source: CreditForecast.com, Moody’s Analytics 

Generally  though,  what  will  matter  most  for  the  developments  on  the  consumer  credit 
markets in the longer term corresponding to the time-frame used for the baseline scenario 
(2020-2030), is the type of economic rebound following the shock induced by COVID-
19, including GDP  growth  rates of the EU economies, that in  turn affect  the indicators 
such as unemployment rate, level of indebtedness of the EU households and supply  and 
demand for consumer  credit. Here, the current  literature points to  several type possible 
recoveries (0). In brief, the weaker the contraction in output and faster and more robust 
recovery  is,  the  more  contained  the  impact  of  COVID-19  would  be  (‘V-shaped 

346 S&P, June 2020, Credit Conditions in Europe: Curve flattens, recovery unlocks.  
347 ECB, August 2020, The macro-economic impact of the pandemic and the policy response.  
348 McKinsey, June 15. European Consumer Finance: Moving to next normal. 
349 Oliver Wyman, 2020, Consumer Credit in the time of COVID-19.  

147 

 
 
 
                                                           
recovery’). Conversely, deep recession and prolonged recovery spread over longer period 
of time (‘L-shape recovery’) would be more detrimental for the consumer credit markets. 

Figure 24: Potential patterns for Economic recover 

Source: Oliver Wyman, (Stress) Testing for Resilience, June 2020. 

The  most  recent  European  Commission  (EC)  Economic  Forecast350  and  the  IMF  WEO 
forecast351 provide some insight on the type of recovery currently expected. According to 
the EC Summer Economic Forecast (baseline scenario), the EU economy will shrink by 
8.3 per cent of GDP in 2020 but should then bounce back quite fast in the following year 
with  GDP  growth  rate  in  2021  reaching  5.8  per  cent.  The  respective  figures  for  the 
Eurozone  are  -8.7  per  cent  and  6.1  per  cent  in  2020  and  2021  respectively.  This 
projection  is  based  on  the  assumption  of  the  ‘lockdown’  (strict  containment  and  social 
distancing measures) across the EU oscillating around 8 weeks, some demand shortfalls 
still  continuing  in  2021  and  additional  deterioration  outside  of  the  EU  due  to  the 
differentiated  geographical  spread  of  the  pandemic  and  its  impact  on  the  international 
trade  but  it  does  not  factor  in  the  major  second  wave  of  infections  (under  baseline 
scenario)352.  The  latest  IMF  forecast  from  June  2020  projects  the  contraction  of  output 
for the Eurozone by -10.2 per cent in 2020 and then fairly swift recovery by 6 per cent in 
2021 (also under baseline scenario). Recent S&P forecast indicates that Germany and the 
Netherlands  are currently  expected to  recover to 2019 GDP levels  by early 2022 while 
Italy  would  regain  that  threshold  by  late  2020353.  The  most  recent  Morgan  Stanley 
forecast also points to sharp but rather short recession354. The recent ECB forecast for the 
Eurozone  suggests  that  its  economy  will  recover  to  the  pre-pandemic  level  by  Q4 
2022355.  Therefore,  all  those  projections  foresee  ‘a  swoosh-shaped  recovery’,  a  faster 

350 European Commission, July 2020, Summer Economic Forecast.  
351 IMF, July 2020, World Economic Outlook.  
352  European  Commission,  Spring  2020,  European  Economic  Forecast.  See  Box  1.1  The  impact  and 
recovery from COVID-19: a model based scenario analysis.  
353 S&P, June 2020, Credit Conditions in Europe: Curve flattens, recovery unlocks.  
354 Morgan Stanley, May 2020, The Coronavirus Recession: Sharper but Shorter.  
355 ECB, August 2020, The macro-economic impact of the pandemic and the policy response.  

148 

 
 
 
                                                           
path  compared  to  the  long  and  relatively  slow  one  of  a  ‘U-shape’  that  followed  the 
previous  GFC,  although  all  have  also  number  of  risks  that  may  affect  negatively  the 
actual outcomes and should be taken with caution356.   

Figure 25: Forecasted GDP growth rates by the EC and IMF 

Source: IMF and EC 

Overall, according to the recent EC European Economic Forecast from Spring 2020, the 
annual growth rate of credit to households in Eurozone in the 2020 will be -1.5 per cent, 
while it will stagnate at the EU-27 level. Growth in supply of credit to households would 
resume in 2021.357 

2.  Impact of digitalisation 

Until  now,  personal  loans  were  mainly  provided  by  traditional  operators  such  as  banks 
using  traditional  methods  to  grant  credit,  including  a  meeting  –  either  face-to-face  or 
online  -  between  the  consumer  and  the  credit  provider.  However,  the  digitalisation  has 
had a significant impact on the consumer credit market, notably through the introduction 
of  new  operators  with  more  innovative  business  models  to  compete  against  traditional 
credit providers, and through the digitalisation of business processes including expanding 
consumers’ access to credit.  

Impact of digitalisation on the market players 

According  to  a  recent  study  examining  the  digitalisation  of  the  marketing  and  distance 
selling  of  retail  financial  services,358  the  market  for  personal  loans  is  still  led  by 
traditional  operators.  The  study,  which  mapped  200  European  providers  of  financial 
services  and  products  found  that  71%  of  those  offering  personal  loans  were  traditional 
operators  (e.g.  banks),  while  29%  were  new  operators  (e.g.  FinTech  companies,  P2P 
lending platforms). There are signs, however, that digitalisation is already changing the 
landscape in the consumer credit market considerably. For instance, data from the World 
Bank and the European Central Bank point to a downsizing of banks in the euro area in 

356 See range of adverse scenarios for the EC and IMF projections. 
357 European Commission, April 2020, Spring Economic Forecast.  
358 ICF, 2020; LE et al., 2019.  

149 

 
 
 
                                                           
the  last  decade,  both  in  terms  of  number  of  branches  and  number  of  employees.  Since 
2008, the number of banks’ branches per 100 000 adults in the EU-28 has seen a steady 
downward  trend,  from  42  in  2008  to  26  in  2018  (a  decrease  of  38%)  (0).  Similarly, 
between 2009 and 2018, the number of employees was also  reduced, this time by 14% 
(0). Only part of it can be attributed to the major restraining that took place after GFC. 
According  to  further  data  of  the  European  Banking  Federation,359  the  number  of 
(domestic)  fell  to  about  163 000  by  the  end  of  2019.  Compared  to  the  previous  year, 
branches in the EU-28 decreased, at a steady pace, by 6%, or about 10 000 branches. 

Figure 26: Commercial bank branches (per 100 000 adults) in the EU-28 

Source: ICF, World Development Indicators database, 2019 

Figure 27: Number of employees in the credit institutions in the Euro area between 2008-2018, 
in millions 

359  EBF,  Facts  and  figures  –  Structure  of 
figures/structure-of-the-banking-sector/  

the  Banking  sector,  https://www.ebf.eu/facts-and-

150 

 
 
 
 
                                                           
Source: ICF, ECB-SDW 

Although  cross-border  activities  refer  to  operations  where  the  credit  provider  and  the 
consumer are located in different countries i.e. direct cross-border lending, the term may 
be  also  used  in  the  literature  and  by  stakeholders  to  refer  to  instances  where  a  credit 
provider  establishes  subsidiaries  or  branches  in  other  countries  to  target  consumers  in 
that market i.e. indirect cross-border lending. For the purposes of this impact assessment, 
‘cross-border lending’ should be understood to mean direct cross-border activities.360  

The European  Banking  Federation data361  show that  at  a  consolidated bank level,  there 
were 968 foreign bank branches in  the EU in 2019, of which 730  were from other  EU 
Member  States.  Germany  is  the  country  with  the  highest  number  of  foreign  branches 
from the other EU Member States, having 87 branches, followed by Spain with 78. The 
overall number of subsidiaries from other EU Member States was 287 in 2019. 

It  is  worth  stressing that the  concentration of banks has  considerably increased in  the 
EU over the last  years. The share of total assets of the five largest credit institutions, at 
EU  level  was  on  average  65%  at  the  end  of  2019.362  In  a  rather  concentrated  market, 
reducing obstacles to cross-border activity is necessary to improve competition. 

The  impact  of  digitalisation  is  also  evidenced  by  the  development  of  the  financial 
technology (fintech) consumer credit market.  Fintech companies are not new, but they 
have expanded significantly in the last decade and are expected to develop further in the 
future.  Although  there  are  no  consolidated  data  at  the  EU-level,  it  is  estimated  that  in 
2019  the  value  of  Fintech  transactions  –  of  which  credit  still  represents  only  a  minor 
share363  -  amounted  to  EUR  682  billion,  with  a  forecasted  growth  rate  of  13.3%  by 
2022.364  

In this regard, the CCD Evaluation found that while these types of companies have not 
had  a  significant  impact  on  the  performance  of  traditional  credit  providers,  they  have 
already shaped the consumer credit market in many ways, with the introduction of peer-
to-peer lending (P2PL) platforms being one of the most prominent developments. These 
online  platforms,  e.g.  Zopa  and  RateSetter  in  the  UK,  Auxmoney  in  Germany  and 
Bondora in Estonia, often tapp onto the segment of consumer that have been underserved 
by  banks.  They  mostly  act  as  credit  intermediaries,  seeking  to  match  individual 
borrowers with individual lenders. However, some of them (e.g. Auxmoney) also act as 
credit providers.  

Relevant in this regard is lending-based crowdfunding, which EBA defines as 'Open calls 
to the wider public by fund seekers through a third party, typically an on-line platform, to 

360 ECRI, 2015, Towards A Balanced Contribution of Household Credit to the Economy. 
361  EBF,  Facts  and  figures  –  Structure  of 
figures/structure-of-the-banking-sector/  
362https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr200608~4613968937.en.html#:~:text=The%2
0share%20of%20total%20assets,%2D3.1%25%20to%207.8%25, consulted on 25 February 2021. 
363 According to the EY FinTech Adoption Index 2017, the main product from Fintech companies and used 
by  consumers  are  payments  (50%  against  18%  in  2015)  while  loans  represent  only  10%  of  their 
transactions (against 6% in 2015).  
364 ICF, 2020; LE et al., 2019.   

the  Banking  sector,  https://www.ebf.eu/facts-and-

151 

 
 
                                                           
raise funds for a project or for personal purposes, in the form of a loan agreement, with a 
promise to repay with (or in certain cases without) interest. The fund raisers may include 
individuals, start-up companies or existing SMEs that are seeking an alternative means of 
funding, rather than the traditional credit market.365 

Although  the  current  total  is  unknown,  the  size  of  the  sector  is  not  insignificant,  with 
P2PL comprising more than 50% of the alternative financing market366 itself and valued 
at  EUR  7.7  billion  in  2016  (up  from  EUR  1.1  billion  in  2013).  Another  report  showed 
that  in  2015  peer-to  peer  consumer  lending  had  a  market  share  of  36%  in  2015,  worth 
EUR 366 million.367  

In addition,  in  2017, the total  value of P2PL market  in  Europe was EUR 3.8 billion,368 
and  expected  to  expand  in  the  future,  thanks  to  the  ever-growing  digitalisation  of  the 
sector. Thus, consumer P2PL accounts for 33% of the alternative financing market  and 
operate in many Member States369, albeit with marked differences between the countries. 
The  biggest  alternative  financing  markets  are  in  France  (EUR  444  million),  Germany 
(EUR  322  million)370  and  the  Netherlands  (EUR  194  million),  with  others  (Finland, 
Spain, Italy) experiencing significant booms.371  

Indeed,  their  current  cumulative  market  share  remains  limited,372  as  reflected  in  the 
findings  of  the  CCD  Evaluation,  with  only  2%  of  consumers  consulted  declaring  that 
they  had  taken  their  loan  through  a  platform  of  private  individuals.373  A  survey 
conducted by the European Commission in 2017374, also suggests that consumers seem to 
hold  less  trust  in  these  platforms  than  traditional  credit  providers  such  as  banks.  The 
survey  revealed  that  peer-to-peer  consumer  complaints  linked  to  peer-to-peer  platforms 
concerned mainly a lack of awareness about the authorisation or registration status of the 
providers  and  whether  they  are  obliged  to  provide  the  same  level  of  protection  as 
traditional credit providers. Consumers also seemed to worry about transparency of fees 
and  costs  and  the  assessment  of  borrowers’  creditworthiness.  While  there  are  no 
comprehensive  data  on  the  scale  of  the  problems  faced  by  individuals  obtaining  credit 
through such platforms,  evidence from several  Member States confirms that consumers 
are reporting issues. In a study carried out in 2016, the Financial Ombudsperson Service 
in the UK found that consumer complaints about these platforms had risen significantly, 
with  some  consumers  reporting  having  been  unaware  of  the  fact  they  were  borrowing 
through a peer-to-peer lending platform or being unsure about possible recourse in case 

365 EBA, Opinion on lending-based crowdfunding, EBA/Op/2015/03, 26 February 2015. 
366 Alternative financing market is defined as “any investment other than a stock, bond, or cash”.  
367 See: https://ec.europa.eu/info/sites/info/files/180308-proposal-crowdfunding-impact-assessment_en.pdf 
368 ICF, 2020; LE et al., 2019. 
369 In 2019, the EESC carried out a survey of consumer credit, with half of the respondents confirming that 
these instruments are used in their Member State (EESC, 2019. Evaluation of the CCD). 
370 Note that these figures include also micro/small enterprise lending, not only consumer credit. 
371 ICF, 2020; Jørgensen, 2018. 
372 The Evaluation of the CCD found that only 2%.  
373 ICF, 2020. 
374  European  Commission,  2017,  Exploratory  study  of  consumer  issues  in  online  peer-to-peer  platform 
markets.  

152 

 
 
                                                           
of  problems.  Austria  (2009)  and  Denmark  (2014)  have  each  sanctioned  a  peer-to-peer 
lending platform for failure to follow the rules in place.375 

The total amount and number of loans approved via these platforms has been growing at 
a steady pace and is expected to grow further in the coming years. Recent data shows that 
the  value  of  peer-to-peer  consumer  lending  transactions  in  Europe  (excluding  the  UK) 
has increased sharply between 2014 and 2018 reaching EUR 4.2 billion (0). 

Figure 28: Peer-to-peer consumer and business lending transaction value in Europe (excluding 
the UK) from 2014 to 2018, in USD million 

Source: ICF, based on Statista data 2014-2018 

A recent report estimated the global peer-to-peer market to be at USD 120 billion in 2020 
(around 4 million EUR in 2017 for the EU market), with a forecasted value of USD 1.4 
trillion by 2027 (estimation revised)376. The same report also estimated that the consumer 
credit  market  will  reach  USD  218  billion  by  2027,  with  a  projected  42.2%  compound 
annual  growth  rate  (CAGR).  From  a  European  market  perspective,  the  website 
Finanso.se377  claimed  that  the  P2P  lending  sector  is  expected  to  increase  by  12.2%  in 
2020 to  reach around USD 6.5 billion in  terms  of transaction value  and then double to 
reach USD 7.1 billion in 2023. Although, these estimations have not taken into account 
the COVID 19 impact, it is safe to assume that this segment of consumer credit market 
will be impacted e.g. due to rise in default rates.  

The  growth  that  the  fintech  sector  is  expected  to  have  in  the  coming  years  is  also 
reflected  in  the  opinion  of  traditional  lenders  (including  banks)  consulted  in  the  2017 
PwC  global  fintech  survey,  which  showed  that  89%  of  respondents  considered  their 
businesses at risk of losing revenue in favour of fintech companies.378 

375 ICF, 2020. 
376 Report Linker, 2020, Global Peer-to-peer Lending Industry.  
377 Finanse.se, 2020, “European Business P2P Lending Industry to Reach $ 6.5bn Value This Year”. 
378 PWC, 2017, “Redrawing the lines: FinTech’s growing influence on Financial Services”. 

153 

 
 
 
                                                           
The role of fintech companies in the consumer credit market goes beyond the provision 
of credit. In many cases, rather than competing with traditional credit providers, fintech 
companies  are  providing  services  to  them  allowing  them  to  take  advantage  of 
technological advances. Examples of this are companies like Kreditech or CreamFinance, 
which use alternative data analytics to segment and score consumers, targeting those with 
thin credit files. Recent  surveys showed that partnering up with fintechs is increasingly 
common among traditional credit providers such as banks. In the 2017 PwC survey, the 
share of respondents who believed that this practice is becoming more common ranged 
from  36%  in  Denmark  to  70%  in  Germany,  and  at  least  two  thirds  of  EU  respondents 
stated that this type of partnerships would be more common in the three years to come. 
Similarly, in a recent EY survey, 50.9% of European banks indicated they had chosen to 
cooperate  with  fintech  companies  to  drive  innovation  in  their  businesses,379  a  trend 
confirmed  by  a  report  published  in  2018  by  the  European  Credit  Research  Institute 
(ECRI).380 This may suggest that traditional lenders like banks may in fact benefit from 
the fast growth of fintech, rather than loss rapidly significant share of the market. 

Big Techs such as Google, Facebook, Alibaba or Amazon, who are already offering their 
own version of mobile wallets, might enter the EU consumer lending market as well. In 
the US, financing is available to Amazon users through a store card. Amazon launched 
small business lending for its sellers in 2011. In China Alibaba is already issuing loans, 
and it has issued nearly USD 100 billion of loans over the five years to 2018.381 

Impact  of  digitalisation  on  ease  of  access  to  consumer  credit  and  creditworthiness 
assessment 

Digitalisation  has  also  impacted  the  way  that  consumers  access  credit  and  the  business 
processes  employed by  credit providers  (both traditional and new) to  engage with  their 
customers.  This  is  particularly  relevant  with  regards  the  use  of  online  communication 
channels by consumers and credit providers and the growing use of big data and artificial 
intelligence  by  credit  providers  to  accelerate  and  facilitate  certain  processes  e.g. 
creditworthiness assessment. 

Concerning  the  use  of  online  methods,  a  survey  carried  out  by  Roland  Berger  and  the 
European Federation of Finance House Associations (Eurofinas)382 in 2019 found that a 
majority  of  respondents  (80%)  believed  that  the  digital  transformation  of  the  European 
consumer finance market would be the most important technological trend in the future 
and that the use of online services will be the trend that will affect consumer behaviour 
the  most  (72%).  Indeed,  various  studies383  have  confirmed  that  the  use  of  online  sales 
channels  has  been  on  the  rise,  also  among  traditional  credit  providers.  Although 

379 ICF, 2020; LE et al., 2019; EY survey (2017). Unleashing the potential of FinTech in banking. 
380  ECRI,  2018,  Consumer  Credit,  Digitalisation  and  Behavioural  Economics:  Are  new  protection  rules 
needed?  
381 Institute of International Finance, 2018, A new kind of conglomerate: Bigtech in China. 
382  Eurofinas  and  Roland  Berger,  2018,Future  of  European  Consumer  Finance  Survey,  2018.  NB: 
Executives  from  92  companies  in  13  European  countries,  spanning  various  business  models  from  bank 
subsidiaries to niche players, were surveyed 
383 ICF, 2020; LE et al., 2019.  

154 

 
 
                                                           
 
disaggregated  data  on  the  trends  in  the  use  of  these  channels  by  credit  providers 
specifically  is  not  available,  trends  in  the  wider  financial  services  market  are  useful  to 
understand the recent evolution. For instance, online banking penetration in the EU rose 
steadily between 2008 and 2017 (0). 

Figure 29: Online banking penetration in the EU, 2007-2019, (in %). 

Source:  ICF,  based  on  EUROSTAT,  Individuals  using  the  internet  for  internet  banking,  %  of 
individuals 
74.  
NB: Within the last 3 months before the survey. internet banking includes electronic transactions 
with a bank for payment etc. or for looking up account information. 

aged 

from 

16 

to 

This  trend  is  confirmed  by  a  2019  study  that  estimated  that  for  overall  sales  channels 
used in financial services, 70% of providers used both online and offline channels, 26% 
online (desktop, mobile) and only 4% online only via desktop.384 

As  regards  the  use  of  big  data  and  automated  decision-making  tools,  digitalisation  is 
quickly  improving  the  process  of  collecting  and  analysis  of  consumer’s  information. 
Using  big  data  to  carry  out  CWAs  is  common  among  certain  non-traditional  operators 
such  as  peer-to-peer  lending  platforms,385  but  this  practice  is  not  restricted  to  new 
operators. Banks are using the services of firms such as FriendlyScore, CrediSafe or Big 
Data  Scoring  in  an  attempt  to  improve  the  quality  and  acceptance  rates  through 
alternative  data  analysis.386  Moreover,  the  EBA  report  on  big  data  and  advanced 
analytics, which relied on results from the risk assessment questionnaire 2019,387 shows 
that 34% of respondents declared using or launched big data for risk scoring (0).  

Figure 30: Current use of big data analytics for risk scoring in 2019 (EU), in %  

384 ICF, 2020; LE et al., 2019.  
385 ICF, 2020; EBA, EIOPA, and ESMA, 2016. 
386 ICF, 2020; BEUC, 2017.  
387 EBA, 2020a. Results from the EBA risk assessment questionnaire 2019 (for the purposes of which, 'Big 
data  analytics'  was defined as the use of advanced analytic techniques  such as  machine  learning, against 
very large, diverse data sets from different sources, and in different sizes). 

155 

 
 
 
                                                           
Source: ICF, based on EBA risk assessment questionnaire (spring 2019) 
Note: For the 2019 edition, 62 banks and 18 market analysts have responded to the 
questionnaire.  

In  the  field  of  credit  scoring,  breaches  to  fundamental  rights  can  happen  for  various 
reasons. The machine may be calibrated to process data in a way that does not reflect the 
true  capacity  of  an  individual  to  repay  a  debt.  For  example,  in  April  2019,  the  Finnish 
Data Protection Ombudsman ordered financial credit company Svea Ekonomi to correct 
its creditworthiness assessment practices, stating that an upper age limit is not acceptable 
as a factor, since age does not describe solvency or willingness to pay. The system may 
be trained on data that is not accurate, thereby breaching one of the key data protection 
principles. Then again, the system may become too sophisticated for humans to provide 
an  intelligible  description  of  how  the  result  affecting  the  consumer  has  been  reached 
(algorithms referred to as ‘black boxes’).388 

Impact of digitalisation on consumer behaviour and preferences 

Between  2014  and  2019,  the  proportion  of  Internet  users  in  the  EU  who  purchased  or 
ordered goods or services online for private use grew from 63% to 71%.389 Digitalisation 
has  an  impact  on  the  behaviour  of  consumers  as  well,  which  prefer  fast  end-to-end 
processes. Consumers seeking to obtain a personal loan seem to place greater emphasis 
on  factors  like  fast  end-to-end  processes  or  the  actual  conditions  of  the  loan  over  the 
location of the branch.390  

Flexibility  guaranteed  by  certain  credit  products  in  particular  sold  online  can  be 
beneficial but can also play to the disadvantage of consumers, who have continued access 
to  credit  as  long  as  they  make  minimal  repayments,  due  to  certain  behavioural  biases 

388 Frederik Zuiderveen Borgesius (Council of Europe Study), 2018, Discrimination, artificial intelligence, 
and algorithmic decision-making. 
389  European  Commission,  2020,  Communication:  New  Consumer  Agenda.  Strengthening  consumer 
resilience for sustainable recovery, COM(2020) 696 final. 
390 ECRI, 2018a. 

156 

 
 
 
                                                           
observed  on  consumers,  notably:  i)  optimism  bias,  whereby  individuals  overestimate 
their  ability  to  maintain  a  zero  balance;  ii)  myopia,  whereby  consumer  prioritise  the 
short-term benefits of a credit transaction over its detrimental future impact on personal 
finances;  and  iii)  cumulative  cost  neglect,  whereby  consumers  dismiss  the  cumulative 
effect of a large number of small credit options).391  

Moreover,  digitalisation  has  impacted  information  disclosure.  Lengthy  and  complex 
pre-contractual information appears not to be entirely effective in helping consumers to 
understand and compare offers, especially on digital tools. This is due to various factors:  

  Information  overload:  behavioural  insights  confirmed  that  consumers  tend  not  to 
read  and  properly  process  large  amounts  of  information392  and  may  experience 
information  overload  when  reading  through  complex  information  such  as  a  loan 
offer, which in  turn lead to  status  quo biases (consumer just ‘going along’ with  the 
default  offer).393  Related  to  this  issue,  is  the  fact  that  reviewing  a  loan  offer  on  a 
mobile phone can be even more challenging. It can take over 30 swipes to cover the 
pre-contractual information required under the Directive on a mobile phone.394 In this 
light, the application of the SECCI in the digital context is raising challenges. 

  Complexity of the information provided: some of the elements that are included in 
advertisements  and  pre-contractual  information  are  too  complex  for  average 
consumers  to  understand  (example:  the  calculation  of  the  annual  percentage  rate  of 
charge).  The  low  level  of  financial  literacy  in  some  Member  States  and/or  among 
certain population groups exacerbates this problem.395 In fact, individuals with lower 
levels of financial literacy tend to borrow at higher rates.396 

  Practical limits to the rational consumer concept: behavioural economics insights 
show 
that  even  when  consumers  are  presented  with  adequate  and  easily 
understandable  information,  they  are  still  at  risk  of  making  harmful  financial 
decisions due to certain psychological factors and cognitive biases often imbedded in 
the way information is presented. 

Since the share of individuals using the Internet for online banking grew considerably in 
the  last  years,  reaching  61.4%  in  2018,  digital  and  financial  literacy  can  help  to 
empower consumers purchasing financial services online.397 

When compared to other regions, the EU ranks very high in terms of level of financial 
literacy,  reaching  50%  in  2014  (with  important  variations  among  countries).  Despite 
ranking comparatively high, this figure means that at least half of the EU population (i.e. 
209 million potential consumers over 18, assuming that the rate remains unchanged) lack 

391 ICF, 2020. BEUC, 2019b. 
392 Dutch Authority for the Financial Markets (AFM), 2019. 
393 Danish Competition and Consumer Authority, 2018a. 
394 ICF, 2020. 
395See Annex 6 Market developments – Impact of digitalisation. 
396 Uuriintuya Batsaikhan and Maria Demertzis, 2018. 
397 LE et al., 2019.  

157 

 
 
                                                           
the  financial  knowledge  to  really  understand  the  information  disclosed  before  the 
signature of the contract.398 

The outbreak of the COVID 19 pandemic accelerates the digital transformation of 
the market 

The outbreak of the pandemic has heavily impacted the sector of consumer credit. 2019 
Roland  Berger  survey399  shows  that  credit  providers  declared  (at  95%)  expecting  a 
growth in volumes of 5%, while financial margins will decline or at best remain stable. 
However,  recent  surveys  show  new  trends  in  the  market,  like  the  recent  McKinsey’s 
modelling  of  COVID-19’s  impact  survey400,  the  retail  banking  in  Western  Europe  will 
face  revenues  drop  from  16  to  44  percent.  Indeed,  households  may  re-evaluate  their 
willingness to take financial risk leading to a decrease of the demand for consumer credit. 
On  the  other  hand,  lenders’  risk  appetites  and  effort  to  reduce  costs  may  be  observed 
among some main lenders.  

However,  the  lockdown  and  then  the  social  distancing  measures  have  provided  further 
incentives  to  advance  the  digitalisation  in  the  sector.  Remote  operating  models  and 
infrastructure  modernisation  will  thus  accelerate  the  digitalisation  of  the  market.  The 
McKinsey’s survey pointed out that consumers’ banking preferences are rapidly evolving 
toward a greater use of digital tools. For example, in Italy, Spain, and the US, 15 to 20% 
of  customers  surveyed  expect  to  increase  their  use  of  digital  channels,  even  after  the 
pandemic is over, and 65 to 85% of respondents in Western countries have preference for 
handling  everyday transactions digitally. Consequently, McKinsey’s predicts, this trend 
will be translated into 25% reduction of branches in the retail banking while call-centres 
will experience a string growth. In that context, the EBA warned recently, however, that 
banks renewed efforts to ramp up digitalization and shift to cashless transactions during 
pandemic could also create new conduct risks401.  

At the product level, the recent McKinsey report foresees migration to digital and remote 
channels  to  pick  up  momentum  not  only  in  markets  where  digital  penetration  still  has 
plenty of room to grow (e.g. Southern Europe, Germany) but also in those that are more 
digitally  mature  (e.g.  Sweden).  For  financial  services  providers,  efficient  and  smooth 
digital distribution engine may become an element in the battle to retail and gain market 
share. For example, McKinsey expects the digital channel to grow as the conduit for the 
sale of credit cards and personal loans by between 9 and almost 40 percentage points in 
2020 compared to 2019, depending on the region (0)402. 

Figure 31: Digital sales penetration, 2015-2020 

398 Bruegel and Standard & Poor’s, 2014, Global FinLit Survey data. 
399  Roland  Berger,  2019,  article  on  the  survey  “Consumer  credit:  Europe's  consumer  finance  players  see 
growth potential – and risks”. 
400 Mc Kinsey, 2020, Reshaping retail banking for the next normal.  
401 S&P Global, September 2020. Coronavirus loan moratoriums could be bank misconduct ‘hotspot’, EBA 
warns. 
402 McKinsey, June 2020, European consumer finance: Moving to ‘next normal’.  

158 

 
 
                                                           
Source: ICF, based on data from Finalta by McKinsey 

159 

 
 
 
 
Annex 7: Glossary 

Alternative  categories of data  –  means personal  data obtained by some data controllers 
(credit  lenders,  credit  bureaus)  in  order  to  perform  the  consumer’s  creditworthiness 
assessment,  which  cover  information  wider  than  the  traditional  data  that  concern  the 
consumer’s economic and financial situation (for example, the use of social media data). 

Ancillary service - means a service offered to the consumer in conjunction with the credit 
agreement.403 

Annual  percentage  rate  of  charge  (APR)  -  the  total  cost  of  the  credit  to  the  consumer, 
expressed  as  an  annual  percentage  of  the  total  amount  of  credit,  where  applicable 
including the costs referred to in Article 19(2) of the Directive.404 

Automated  decision-making  -  the  process  of  making  a  decision  by  automated  means 
without any human involvement. These decisions can be based on factual data, as well as 
on digitally created profiles or inferred data.405 

Bank  -  A  financial  institution  one  of  whose  principal  activities  is  to  take  deposits  and 
borrow  with  the  objective  of  lending  and  investing  and  which  is  within  the  scope  of 
banking or similar legislation.406 

Borrower  -  a  person,  firm  or  institution  that  obtains  a  loan  from  a  lender  in  order  to 
finance consumption or investment.407  

Borrowing rate - the interest rate expressed as a fixed or variable percentage applied on 
an annual basis to the amount of credit drawn down.408 

Consumer - a natural person who, in transactions covered by the Directive, is acting for 
purposes which are outside his trade, business or profession.409 

Consumer detriment - Consumer detriment consists of harm (loss of welfare) suffered by 
consumers,  whether  financial  or  non-financial,  in  the  marketplace.  Personal  consumer 
detriment – as opposed to structural consumer detriment attributable to market failure or 
regulatory  failure  –  refers  to  negative  outcomes  for  individual  consumers,  relative  to 
reasonable  expectations.  The  revealed  personal  consumer  detriment  pools  negative 
outcomes for individual consumers which they become aware of following the purchase 

403 Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property. 
404 Consumer Credit Directive. 
405  ICO,  Guide  to  the  General  Data  Protection  Regulation  (GDPR)  -  Automated  decision-making  and 
profiling. 
406 IASCF, Key term list; Commission Regulation (EC) No 1126/2008 (international accounting standards) 
407 Collins Dictionary of Economics, 4th ed. 2005.   
408 Consumer Credit Directive. 
409 Consumer Credit Directive. 

160 

 
 
 
 
 
 
 
 
 
                                                           
or  use  of  a  good  or  service,  measured  relative  to  what  would  reasonably  have  been 
expected, given the type of transaction.410 

Consumer Credit  -  loans granted to  households, which in  the case of these transactions 
are  acting  for  purposes  outside  their  business  and  profession.  Mortgage  loans  for 
financing house building or buying (amongst others bridging loans) are excluded. It is the 
intention that consumer credit relates exclusively to credits used for buying goods and/or 
services which are consumed by the households individually.411  

Creditor - a natural or legal person who grants or promises to grant credit in the course of 
his trade, business, or profession;412 

Credit  Agreement  -  an  agreement  whereby  a  creditor  grants  or  promises  to  grant  to  a 
consumer  credit  in  the  form  of  a  deferred  payment,  loan  or  other  similar  financial 
accommodation, except for agreements for the provision on a continuing basis of services 
or for the supply of goods of the same kind, where the consumer pays for such services 
or goods for the duration of their provision by means of instalments;413 

Credit Card - A card entitling the owner to use funds from the issuing company up to a 
certain limit. The holder of a credit card may use it to buy a good or service. When one 
does this, the issuing company effectively gives the card holder a loan for the amount of 
the good or service, which the holder is expected to repay. 414 

Credit intermediary - a natural or legal person who is not acting as a creditor and who, in 
the  course  of  his  trade,  business  or  profession,  for  a  fee,  which  may  take  a  pecuniary 
form or any other agreed form of financial consideration:  
-  presents or offers credit agreements to consumers; 

-  assists  consumers  by  undertaking  preparatory  work  in  respect  of  credit 

agreements other than as referred to in (I); or 

-  concludes credit agreements with consumers on behalf of the creditor;415 

Credit  institution  -  an  undertaking  the  business  of  which  is  to  take  deposits  or  other 
repayable funds from the public and to grant credits for its own account;416 

in 

the 

Study 

detriment 

consumer 

on  measuring 

410 
https://ec.europa.eu/info/publications/study-measuring-consumer-detriment-european-union_en.  
411 Eurostat, "European System  of Accounts  - ESA 1995", Office  for Official Publications of the European 
Communities, Luxembourg, 1996. 
412 Consumer Credit Directive. 
413 Consumer Credit Directive. 
414 Farlex Financial Dictionary, 2012. 
415 Consumer Credit Directive. 
416 Regulation (EU) no 575/2013 of the European parliament and of the council of 26 June 2013 on prudential 
requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012. 

European 

Union, 

2017, 

161 

 
 
 
 
 
 
 
 
                                                           
Credit  line  -  a  fixed  amount  or  limit  of  credit  which  is  established  for  a  customer  or 
borrower by a business or bank. It is the amount of outstanding credit which may not be 
exceeded at any time;417 

Credit provider – see Lender 

Creditworthiness assessment - evaluation of the prospect for the debt obligation resulting 
from the credit agreement to be met.418 

Credit rollover – extending the loan’s due date by paying an additional fee. Loan rollover 
is common with short-term payday loans. 

Cross-selling  practice  -  offering  of  a  financial  service  together  with  another  service  or 
product as part of a package or as a condition for the same agreement or package. 

Crowdfunding  -  is  the  practice  of  funding  a  project  or  venture  by  raising  monetary 
contributions from a large number of people. It is often performed via internet-mediated 
registries that facilitate money collection for the borrower (lending) or issuer (equity).419 

Crypto-assets - is a digital representation of value or rights which may be transferred and 
stored electronically, using distributed ledger technology or similar technology.420 

Dynamic  pricing  -  a  customer  or  user  billing  mode  in  which  the  price  for  a  product 
frequently rotates based on market demand, growth, and other trends.421 

Durable  medium  -  any  instrument  which  enables  the  consumer  to  store  information 
addressed personally to him in a way accessible for future reference for a period of time 
adequate  for  the  purposes  of  the  information  and  which  allows  the  unchanged 
reproduction of the information stored.422 

End-to-end process - end-to-end describes a process that takes a system or service from 
beginning to end and delivers a complete functional solution, usually without needing to 
obtain anything from a third party.423 

Financial literacy - the ability to understand basic principles of business and finance.424 

417 Webster; Collin & Joliffe, Dict. of Accounting, Collin Publ., 1992. 
418  Directive  2014/17/EU  of  the  European  Parliament  and  of  the  Council  of  4  February  2014  on  credit 
agreements for consumers relating to residential immovable property. 
419 European Banking Authority, Glossary for financial innovation. 
420 Proposal for a Regulation of the European Parliament and of the Council on Markets in Crypto-assets, and 
amending Directive (EU) 2019/1937. 
421 Techopedia Dictionary, https://www.techopedia.com/definition/29600/dynamic-pricing  
422 Consumer Credit Directive. 
423 Investopedia, 2020, Will Kenton. 
424 Cambridge Business English Dictionary, 2011. 

162 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Fintech - technologically enabled financial innovation that could result in new business 
models,  applications,  processes,  or  products  with  an  associated  material  effect  on 
financial markets and institutions and the provision of financial services.425 

Full  harmonisation  (maximum  harmonisation)  -  In  the  case  of  full  harmonisation 
Member States must implement the EU measures but may not enact or retain any rules 
which depart from them. 426 

Household  -  group  of  persons  who  share  the  same  living  accommodation,  who  pool 
some,  or  all,  of  their  income  and  wealth  and  who  consume  certain  types  of  goods  and 
services collectively, mainly housing and food.427 

Implementation - the process of making sure that the provisions of EU legislation can be 
fully  applied.  For  EU  Directives,  this  is  done  via  transposition  of  its  requirements  into 
national law, for other EU interventions such as Regulations or Decisions other measures 
may  be  necessary  (e.g.  in  the  case  of  Regulations,  aligning  other  legislation  that  is  not 
directly touched upon but affected indirectly by the Regulation with the definitions and 
requirement  of  the  Regulation).  Whilst  EU  legislation  must  be  transposed  correctly  it 
must also be applied appropriately to deliver the desired policy objectives.428 

Interest rate cap or ceiling - The maximum interest rate that may be charged on a contract 
or agreement.429 

Lender  -  individual,  group  or  financial  institution  that  makes  funds  or  other  assets 
available  to  another  with  the  expectation  that  they  will  be  returned,  in  addition  to  any 
interest and/or fees.430 

Linked credit agreement - a credit agreement where 

- 

- 

the credit in question serves exclusively to finance an agreement for the supply of 
specific goods or the provision of a specific service, and 

those two agreements form, from an objective point of view, a commercial unit; a 
commercial unit shall be deemed to exist where the supplier or service provider 
himself finances the credit for the consumer or, if it is financed by a third party, 
where  the  creditor  uses  the  services  of  the  supplier  or  service  provider  in 
connection with the conclusion or preparation of the credit agreement, or where 

425 European Banking Authority, Glossary for financial innovation. 
426 European Parliamentary Research Service, 2015, Competence in private law - The Treaty framework for a 
European private law and challenges for coherence. 
427 Eurostat's Concepts and Definitions Database (CODED). 
428 European Commission (2017), Better Regulation Guidelines, Glossary. 
429 Farlex Financial Dictionary, 2012. 
430 Investopedia, 2019, Adam Barone. 

163 

 
 
 
 
 
 
 
 
                                                           
the specific goods or the provision of a specific service are explicitly specified in 
the credit agreement.431 

Mortgage loan - consumer real estate credit, usually extended on a long-term basis with 
the mortgaged property as security.432 

in  general, 

Non-banks  – 
these  are  non-monetary  financial  corporations.  More 
specifically, they include insurance corporations and pension funds, financial auxiliaries, 
and other financial intermediaries.433 

Non-credit institution - any creditor that is not a credit institution.434 

Overdraft facility - an explicit credit agreement whereby a creditor makes available to a 
consumer funds which exceed the current balance in the consumer's current account.435 

Over-indebtedness  -  relates  to  situation  when  a  household  is  unable  to  meet  the  debt 
repayment  obligations  but  also  other  payments  such  as  rent,  utility  bills,  healthcare  or 
insurance bills or taxes and/or fines. In this context, over-indebtedness does not mean an 
occasionally  missed  payment  but  rather  more  structural  payment  problems  e.g.  several 
months of missed debt repayment obligations. Some differences in interpretation of the 
concept across the Member States exist. 

Overrunning - means a tacitly accepted overdraft whereby a creditor makes available to a 
consumer funds which exceed the current balance in  the  consumer's current  account  or 
the agreed overdraft facility;436 

Pawnbroker  -  an  individual  or  business  (pawnshop  or  pawn  shop)  that  offers  secured 
loans to people, with items of personal property used as collateral.437 

Peer-to-peer  (P2P)  lending  -  enables  individuals  to  obtain  loans  directly  from  other 
individuals,  cutting  out  the  financial  institution  as  the  middleman.  P2P  lending  is  also 
known as social lending or crowdlending.438 

Peer-to-peer (P2P) lending platform - is a publicly accessible internet-based information 
system operated or managed by a peer-to-peer provider. 

Payday  loan  -  A  short-term  loan  expected  to  be  repaid  before  the  borrower's  next  pay 
day.439  

431 Consumer Credit Directive. 
432 American State Bank, Banking Glossary. 
433 European Central Bank, 2016, Bank lending survey for the euro area, Glossary. 
434  Directive  2014/17/EU  of  the  European  Parliament  and  of  the  Council  of  4  February  2014  on  credit 
agreements for consumers relating to residential immovable property. 
435 Consumer Credit Directive. 
436 Consumer Credit Directive. 
437 Wikipedia. 
438 Investopedia, 2019, Julia Kagan, https://www.investopedia.com/terms/p/peer-to-peer-lending.asp  

164 

 
 
 
 
 
 
 
 
 
 
                                                           
Payment Protection Insurance (PPI) - An insurance policy that makes loan payments on 
behalf of the policyholder in the event of financial hardship.440 

Personal loan - credit granted to a private person for non-commercial purposes solely on 
the basis of that person's creditworthiness, income, and financial circumstances.441 

Product bundling or Bundling practice - the offering or the selling of a credit agreement 
in a package with other distinct financial products or services where the credit agreement 
is also made available to the consumer separately but not necessarily on the same terms 
or conditions as when offered bundled with the ancillary services.442 

Revolving credit - credit that is automatically renewed as debts are paid off.443 

Right  of  withdrawal  -  consumer's  right  to  terminate  a  contract  without  reason  within  a 
specified time period, provided certain conditions are fulfilled.444 

SECCI (Standard  European  Consumer  Credit  Information)  -  a  standardised  form 
designed to show exactly what a finance agreement contains. The form will include key 
details such as type of credit, Annual Percentage Rate (APR), number and frequency of 
payments, and total amount owed.445 

Short-term high-cost credit - the practice of lending to consumers: i) amounts of money 
that are small relative to other forms of credit in the market, ii) for short periods of time 
(most commonly for durations of under 12 months), iii) at a rate that is considered to be 
high  compared  with  other  credit  products  available  to  consumers  in  their  jurisdiction 
(FinCoNet, 2017). 

Stakeholder  -  any  individual  citizen  or  an  entity  impacted,  addressed,  or  otherwise 
concerned by an EU intervention.446 

Stakeholder consultation  - a formal process  of  collecting input and views from  citizens 
and  stakeholders  on  new  initiatives  or  evaluations/  fitness  checks,  based  on  specific 
questions  and/or  consultation  background  documents  or  Commission  documents 

439 Farlex Financial Dictionary, 2012. 
440 Farlex Financial Dictionary, 2012. 
441 Dictionary of Banking, UBS 1998 – 2019. 
442  Directive  2014/17/EU  of  the  European  Parliament  and  of  the  Council  of  4  February  2014  on  credit 
agreements for consumers relating to residential immovable property. 
443 Oxford Dictionary of English, Oxford University Press 2018. 
444  IATE  EU  terminology  database,  COM-Terminology  Coordination,  based  on:  European  Commission,  
Rights & principles applicable when you buy goods or services online. 
445 Credit Plus, 2019, Glossary, available at https://www.creditplus.co.uk/car-finance-glossary/secci/  
446 European Commission (2017), Better Regulation Guidelines, Glossary. 

165 

 
 
 
 
 
 
 
 
 
 
 
                                                                                                                                                                            
launching  a  consultation  process  or  Green  Papers.  When  consulting,  the  Commission 
proactively seeks evidence (facts, views, opinions) on a specific issue. 447 

Sweeps - a sweep is an exercise to enforce EU law. It is led by the EU and carried out by 
national  enforcement  authorities  who  conduct  simultaneous,  coordinated  checks  for 
breaches  in  consumer  law  in  a  particular  sector.  The  national  enforcement  authorities 
then  contact  operators  about  suspected  irregularities  and  ask  them  to  take  corrective 
action. 

Transposition - describes the process of incorporating the rights and obligations set out in 
an EU Directive into national legislation, thereby giving legal force to the provisions of 
the Directive. The Commission may take action if a Member State fails to transpose EU 
legislation and/or to communicate to the Commission what measures it has taken. In case 
of no or partial transposition, the Commission can open formal infringement proceedings 
and eventually refer the Member State to the European Court of Justice.448 

Tying practice - the offering or the selling of a credit agreement in a package with other 
distinct financial products or services where the credit agreement is not made available to 
the consumer separately.449 

447 European Commission (2017), Better Regulation Guidelines, Glossary. 
448 European Commission (2017), Better Regulation Guidelines, Glossary. 

449 Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property. 

166 

 
 
 
 
 
                                                           
Annex 8: Mapping of national measures to support borrowers amid the COVID-19 crisis 

Measures taken by Member States to alleviate the consequences of the first COVID-19 wave on citizens with a consumer credit (June 2020): 

MEASURES 

Deferral of 
repayments 
for consumer 
credits and 
credit cards 

Clear and 
comprehensive 
information 
about the 
implications of 
specific 
COVID-19 
measures for 
the credit 

Strengthened 
support to 
over-indebted 
consumers 
struggling to 
repay their 
debt (e.g. 
through debt 
advice) 

Suspension or 
deferral of debt 
collection 
activities 

Ensuring that 
the credit 
scoring of 
consumers’ 
applying to 
temporary 
COVID-19 
measures is not 
automatically 
affected by 
them 

Temporary 
waiving of fees 
and charges 
related to 
credit (e.g. fees 
on late or 
missed 
payments) 

Measures to 
ensure a fast 
procedure   of 
COVID-19 
related 
requests 

Enhanced 
monitoring by 
the competent 
authorities of 
any new fees 
and charges for 
consumers 
related to the 
exceptional 
measures 

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Annex 9: Approach to monetisation of cost benefits 

Detailed description of the approach to the assessment of costs and benefits 

This annex provides a description of the approach to assess the main benefits and costs to 
consumers,  financial  providers  and  public  authorities  that  can  be  attributed  to  the 
Consumer Credit Directive (‘CCD’) under the baseline scenario, and then against baseline 
scenario  for  selected  policy  measures.  Under  the  baseline  scenario,  both  approaches  to 
costs  and  benefits  respectively,  are  consistent  with  those  applied  under  the  CCD 
Evaluation with some further augmenting taking place to cater for the new time frame of 
the  baseline  (2021-30)  and  factors  such  as  COVID-19  pandemic.  For  the  assessment  of 
costs  and  benefits  against  baseline  scenario,  combination  of  qualitative  and  quantitative 
approaches was used.  

Benefits (baseline scenario) 

According to its two main objectives the CCD should bring the following benefits: 

  ensure a better protection of the EU consumers which in turn leads to a lower consumer 
detriment (possible due to a lower incidence rate of problems and a lower magnitude) 
and to an increase in demand for consumer credit; 

  enhancing  a  level  playing  field  potentially  leading  to  an  increase  in  cross-border 

transaction of consumer credit. 

The research conducted as part of the CCD Evaluation showed that the CCD had an impact 
on  increasing  consumer  protection.  On  the  other  hand,  the  evaluation  did  not  find  hard 
evidence that changes in the demand or supply of consumer credit products can be directly 
attributed to CCD (including cross-border activities). Consequently, the same assumption 
is used as part of the study supporting the impact assessment, and the impact of the CCD 
on the reduction of consumer personal detriment only will be quantified.  

Consumer personal detriment 

Personal  detriment  refers  to  loss  of  welfare  experienced  by  individuals  due  to  problems 
that  occur  after  the  purchase  and  that  were  not  expected  (based  on  reasonable 
expectations).  Personal  detriment  includes  financial  and  non-financial  losses  (e.g.  time 
losses, psychological detriment). 

The CCD Evaluation found that due to various factors, consumer detriment was reduced in 
most of the EU 28 Member States since 2010. It assumed, based on discussions with the 
team  of  evaluation  experts,  that  22.5%  of  that  change  could  be  attributed  to  CCD  (i.e. 
incremental effect of CCD).  

Other key factors that have played a role in reducing consumer detriment since 2008 were 
also considered and their relative weight was gauged: 

-  Development and trends of the credit sector itself: 25%; 
-  More  stringent  legislation  in  some  MS,  and  improved  enforcement  (so  government-

induced): 15%; 
Increase in sector compliance over time: 10%; 

- 

169 

 
 
- 
- 

Increase in financial literacy among consumers: 5%; 
Increase  in  consumer  awareness  of  APR,  SECCI  and  contractual  terms  in  terms  of 
consumer credit (as unchanged for 10 years now): 10%; 

-  National-level campaigns in boosting consumer awareness: 5%; 
-  Other legislation and other factors: 7.5%. 

This  estimate  of  the  detriment  attributed  to  the  CCD  and  other  factors  is  in  itself 
moderately  robust.  The  first  step  in  assessing  the  weight  included  listing  the  factors  that 
played  a  role  in  reducing  detriment.  The  second  step  was  a  qualitative  assessment 
(narrative,  description)  and  quantitative  assessment  (rating)  of  its  importance.  On  this 
basis,  the  above  percentages  were  derived  by  ranking  these  factors.  The  data  was, 
nonetheless, moderately robust because there was a fairly high probability that a Directive 
in  a  policy  area  was  never  the  only  or  deciding  factor  for  attribution  of  change,  and 
therefore the weighting would not be considered to exceed 30-40%. At the same time, the 
pace of changes in the sector (supply) and demand-driven changes have further reduced the 
unique role of the CCD. It was also derived to be unlikely for the value of the attribution to 
the CCD to be below 10-15% following the qualitative and quantitative assessment of the 
key  elements  above  (and  confirmed  by  stakeholder  consultations,  which  led  to  the 
conclusion that  the CCD has  a non-negligible attribution, rated to  be above 15-20%  as a 
result).  In  any  case,  any  attribution  of  20%  to  30%  all  generated  positive  consumer 
detriment. The initial consideration of a range of benefit of 20% to 30% show this. For the 
CCD  Evaluation  this  was  specified  to  be  a  conservative  estimate  of  22.5%  (at  the  lower 
end of this range), consistently showing benefits to be similar to or outweigh costs across 
the entire range of 20-30%.  

For the period 2021-2030 covering the baseline scenario, it appears reasonable to assume 
that the impact of the CCD has been decreasing over time e.g. many effects stemming 
from the introduction of the CCD may have already accrued over the first 10 years leaving 
gradually  smaller  scope  for  equally  meaningful  improvements  driven  directly  by  the 
Directive. For that reason, it is assumed that the value is lower in view of this trend, and 
based on a reasoned guesstimate, set at 15% (as opposed to 22.5%).  

Below  the  approach  to  calculate  the  changes  in  consumer  detriment  and  the  incremental 
effect of CCD with year 2021 as a starting point is described. 

Step 1. Estimate the average magnitude of consumer financial detriment per problem 

The estimation of the average magnitude of the consumer financial detriment suffered by 
an  individual  due  to  a  problem  (e.g.  magnitude  of  the  financial  detriment  per  problem) 
applied as part of the CCD Evaluation (2020) relied on the estimate reported in the CIVIC 
(2017) for the consumer detriment for “Loans, credit and credit cards” as of 2017, and for 
the following countries: UK, Poland, France and Italy.450 This data was then extrapolated 

450 The main aim of CIVIC study’s was to develop a simple, consistent state-of-the-art methodology in order 
to  identify,  measure  and  quantify  the  incidence  and  magnitude  of  consumer  detriment  in  any  kind  of 
consumer  market.  It  focused  on  6  markets  (including  the  ‘loans,  credit  and  credit  cards‘  market)  and  on  4 

170 

 
 
                                                           
 
for each of the EU 28 countries, and until the year 2018. For the baseline scenario (2021-
2030)  under  the  supporting  study,  2018  data  points  (the  latest  available)  for  each  of  the 
EU-27 Member States are assumed as the starting point for the year 2021, and then values 
are  kept  constant.  While  in  practice  there  could  be  a  number  of  factors  affecting  the 
magnitude of financial detriment per problem over the reference period of 2021-2030 (e.g. 
impact  of digitalisation, increase/  decrease in  use of products  involving different  level  of 
risks, changes in financial literacy of consumers etc), reliable capturing and projection of 
all these factors and accounting for their different level of impact on consumer detriment 
(changing  over  the  time  and  across  Member  States)  is  not  feasible.  Hence,  a  simplifying 
assumption of a constant rate is applied.  

Magnitude of financial detriment per problem, 2017  

Member State 

Magnitude, in EUR  

Used  to  extrapolate  for  EU  countries  in 
the following regions 

France 

Italy 

Poland 

UK 

108 

187 

176 

144 

Western Europe 

Southern Europe 

Eastern Europe 

Northern Europe 

Furthermore, the magnitude of financial detriment per problem over the period 2010-2018, 
as  assessed  by  the  CCD  Evaluation  (2020),  drew  also  on  the  Consumer  Markets 
Scoreboard data on “Extent of detriment suffered as a result of problems experienced with 
products/services  or  supplier/retailer”.451  For  the  baseline  scenario  under  the  supporting 
study, the data on the extent of detriment per Member State as of 2018 used in the CCD 
Evaluation  was  subsequently  used  as  the  starting  point  for  the  year  2021.  For  the  period 
2021-2030,  it  is  assumed  that  the  extent  of  detriment  suffered  as  a  result  of  a  problem 
reduces by 0.3 point per annum, except Estonia where the score has been assumed to stay 
constant given already very low base value in 2020. This trend is in line with reduction of 
the extent of detriment applied under Evaluation 2019.  

Severity of consumer problems in the period 2021-2030 (scale 0-10, where 0 is low severity and 10 
high severity) 

Member 
State 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Austria 

4.31 

4.01 

3.71 

3.41 

3.11 

2.81 

2.51 

2.21 

1.91 

1.61 

Belgium 

4.31 

4.01 

3.71 

3.41 

3.11 

2.81 

2.51 

2.21 

1.91 

1.61 

Bulgaria 

6.46 

6.16 

5.86 

5.56 

5.26 

4.96 

4.66 

4.36 

4.06 

3.76 

Croatia 

5.18 

4.88 

4.58 

4.28 

3.98 

3.68 

3.38 

3.08 

2.78 

2.48 

countries, ensuring very large sample sizes for both the  face-to-face and the online surveys, resulting in an 
overall sample size of 16 000 respondents. 
451 By assuming that the magnitude changed proportionally to the extent of detriment. 

171 

 
 
                                                                                                                                                                                
Member 
State 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Cyprus 

5.38 

5.08 

4.78 

4.48 

4.18 

3.88 

3.58 

3.28 

2.98 

2.68 

Czech 
Republic 

5.29 

4.99 

4.69 

4.39 

4.09 

3.79 

3.49 

3.19 

2.89 

2.59 

Denmark 

4.19 

3.89 

3.59 

3.29 

2.99 

2.69 

2.39 

2.09 

1.79 

1.49 

Estonia 

1.13 

1.23 

1.23 

1.23 

1.23 

1.23 

1.23 

1.23 

1.23 

1.23 

Finland 

3.35 

3.05 

2.75 

2.45 

2.15 

1.85 

1.55 

1.25 

0.95 

0.65 

France 

5.85 

5.55 

5.25 

4.95 

4.65 

4.35 

4.05 

3.75 

3.45 

3.15 

Germany 

5.14 

4.84 

4.54 

4.24 

3.94 

3.64 

3.34 

3.04 

2.74 

2.44 

Greece 

5.31 

5.01 

4.71 

4.41 

4.11 

3.81 

3.51 

3.21 

2.91 

2.61 

Hungary 

5.65 

5.35 

5.05 

4.75 

4.45 

4.15 

3.85 

3.55 

3.25 

2.95 

Ireland 

4.26 

3.96 

3.66 

3.36 

3.06 

2.76 

2.46 

2.16 

1.86 

1.56 

Italy 

5.22 

4.92 

4.62 

4.32 

4.02 

3.72 

3.42 

3.12 

2.82 

2.52 

Latvia 

5.49 

5.19 

4.89 

4.59 

4.29 

3.99 

3.69 

3.39 

3.09 

2.79 

Lithuania 

6.94 

6.64 

6.34 

6.04 

5.74 

5.44 

5.14 

4.84 

4.54 

4.24 

Luxembourg  5.76 

5.46 

5.16 

4.86 

4.56 

4.26 

3.96 

3.66 

3.36 

3.06 

Malta 

8.27 

7.97 

7.67 

7.37 

7.07 

6.77 

6.47 

6.17 

5.87 

5.57 

Netherlands  4.12 

3.82 

3.52 

3.22 

2.92 

2.62 

2.32 

2.02 

1.72 

1.42 

Poland 

5.28 

4.98 

4.68 

4.38 

4.08 

3.78 

3.48 

3.18 

2.88 

2.58 

Portugal 

5.08 

4.78 

4.48 

4.18 

3.88 

3.58 

3.28 

2.98 

2.68 

2.38 

Romania 

6.83 

6.53 

6.23 

5.93 

5.63 

5.33 

5.03 

4.73 

4.43 

4.13 

Slovakia 

3.61 

3.31 

3.01 

2.71 

2.41 

2.11 

1.81 

1.51 

1.21 

0.91 

Slovenia 

4.55 

4.25 

3.95 

3.65 

3.35 

3.05 

2.75 

2.45 

2.15 

1.85 

Spain 

6.12 

5.82 

5.52 

5.22 

4.92 

4.62 

4.32 

4.02 

3.72 

3.42 

Sweden 

3.46 

3.16 

2.86 

2.56 

2.26 

1.96 

1.66 

1.36 

1.06 

0.76 

Source: extrapolation based on Consumer Markets Scoreboard and results of the CCD Evaluation 
(2019) 

This  then  allowed  to  estimate  the  magnitude  of  the  financial  detriment  per  consumer  for 
each EU-27 Member States.  

Magnitude of financial detriment 2021-2030, in EUR 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Austria 

 93.2  

 86.7  

 80.2  

 73.7  

 67.2  

 60.7  

 54.2  

 47.7  

 41.3  

 34.8  

Belgium 

 76.5  

 71.2  

 65.8  

 60.5  

 55.2  

 49.8  

 44.5  

 39.2  

 33.9  

 28.5  

172 

 
 
 
2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Bulgaria 

 128.7  

 122.7    116.8    110.8    104.8    98.8  

 92.9  

 86.9  

 80.9  

 74.9  

Croatia 

 192.9  

 181.7    170.5    159.4    148.2    137.0    125.8    114.7    103.5    92.3  

Cyprus 

 164.0  

 154.8    145.7    136.5    127.4    118.2    109.1    99.9  

 90.8  

 81.6  

Czech 
Republic 

 129.3  

 122.0    114.6    107.3    100.0    92.6  

 85.3  

 77.9  

 70.6  

 63.3  

Denmark 

 119.6  

 111.0    102.5    93.9  

 85.4  

 76.8  

 68.2  

 59.7  

 51.1  

 42.6  

Estonia 

 96.3  

 104.5    104.5    104.5    104.5    104.5    104.5    104.5    104.5    104.5  

Finland 

 38.1  

 34.7  

 31.2  

 27.8  

 24.4  

 21.0  

 17.6  

 14.2  

 10.8  

 7.4  

France 

 102.1  

 96.8  

 91.6  

 86.4  

 81.1  

 75.9  

 70.7  

 65.4  

 60.2  

 55.0  

Germany 

 91.0  

 85.7  

 80.3  

 75.0  

 69.7  

 64.4  

 59.1  

 53.8  

 48.5  

 43.2  

Greece 

 141.1  

 133.1    125.1    117.2    109.2    101.3    93.3  

 85.3  

 77.4  

 69.4  

Hungary 

 134.6  

 127.4    120.3    113.1    106.0    98.8  

 91.7  

 84.5  

 77.4  

 70.2  

Ireland 

 125.6  

 116.8    107.9    99.1  

 90.3  

 81.4  

 72.6  

 63.8  

 54.9  

 46.1  

Italy 

 154.7  

 145.8    136.9    128.0    119.1    110.3    101.4    92.5  

 83.6  

 74.7  

Latvia 

 153.5  

 145.1    136.7    128.3    119.9    111.5    103.1    94.8  

 86.4  

 78.0  

Lithuania 

 129.3  

 123.7    118.1    112.5    106.9    101.4    95.8  

 90.2  

 84.6  

 79.0  

Luxembourg   158.2  

 149.9    141.7    133.5    125.2    117.0    108.8    100.5    92.3  

 84.1  

Malta 

 146.3  

 141.0    135.7    130.4    125.1    119.8    114.5    109.2    103.9    98.6  

Netherlands 

 163.1  

 151.2    139.4    127.5    115.6    103.8    91.9  

 80.0  

 68.2  

 56.3  

Poland 

 177.8  

 167.7    157.6    147.5    137.4    127.3    117.2    107.1    97.1  

 87.0  

Portugal 

 166.1  

 156.3    146.5    136.7    126.9    117.0    107.2    97.4  

 87.6  

 77.8  

Romania 

 142.7  

 136.5    130.2    123.9    117.7    111.4    105.1    98.9  

 92.6  

 86.3  

Slovakia 

 188.6  

 172.9    157.3    141.6    126.0    110.3    94.6  

 79.0  

 63.3  

 47.6  

Slovenia 

 119.6  

 111.7    103.8    95.9  

 88.0  

 80.1  

 72.3  

 64.4  

 56.5  

 48.6  

Spain 

 148.8  

 141.5    134.2    126.9    119.6    112.3    105.0    97.7  

 90.4  

 83.1  

Sweden 

 134.4  

 122.8    111.1    99.5  

 87.8  

 76.2  

 64.6  

 52.9  

 41.3  

 29.6  

Source: own calculations based on MMS and Civic (2017) and further extrapolation for the period 
2021-2030 

Step 2. Estimate the average time loss per problem 

The  estimation  of  the  time  loss  per  problem,  as  part  of  the  CCD  Evaluation,  was  done 
based on the data reported in CIVIC (2017). The number of hours for the period 2010-2018 
was  extrapolated  using  the  data  from  Consumer  Markets  Scoreboard  on  “Extent  of 
detriment  suffered  as  a  result  of  problems  experienced  with  products/services  or 

173 

 
 
 
supplier/retailer”.452 For the period 2021-2030, the latest  data point from  2018 is  used as 
starting point for the year 2021, and then kept constant for the remaining period 2021-30. 

The  estimation  of  time  losses  and  then  monetisation  of  time  losses  (i.e.  by  using  hourly 
earnings  for  monetising  time  losses)  followed  the  methodology  for  measuring  consumer 
detriment  developed  by  CIVIC  (2017)  for  DG  JUST  –  “(…)  a  detailed  step-by-step 
operational  guidance  to  guide  scientifically  sound  and  resource  efficient  assessments  of 
personal consumer detriment in markets across the EU”. The methodology covers financial 
detriment, time loss and psychological detriment. 

According  to  the  CIVIC  study,  time  losses  for  2016  were  estimated  based  on  statements 
from  consumers  collected  through  surveys  of  consumers.  In  the  CCD  Evaluation,  ICF 
extrapolated  those  time  losses  to  other  years  based  on  the  data  on  incidence  rates  of 
consumer complaints from the “markets scoreboards”. The underlying assumption was that 
time losses are proportionate to the incidence rate of problems. The supporting study uses 
the values for 2018, as estimated as part of the CCD Evaluation (2020), and assumes those 
for  the  starting  year  2021.  From  then  onwards,  the  underlying  assumption  for  the  period 
2021-30 is that the time losses per problem stay constant.  

Time losses 2021-2030 (number of hours per problem) 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Austria 

Belgium 

Bulgaria 

Croatia 

Cyprus 

Czech 
Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

4.6 

4.7 

6.8 

5.5 

5.7 

5.6 

4.5 

1.4 

3.7 

6.2 

5.5 

5.7 

6.0 

4.6 

5.6 

4.6 

4.7 

6.8 

5.5 

5.7 

5.6 

4.5 

1.4 

3.7 

6.2 

5.5 

5.7 

6.0 

4.6 

5.6 

4.6 

4.7 

6.8 

5.5 

5.7 

5.6 

4.5 

1.4 

3.7 

6.2 

5.5 

5.7 

6.0 

4.6 

5.6 

4.6 

4.7 

6.8 

5.5 

5.7 

5.6 

4.5 

1.4 

3.7 

6.2 

5.5 

5.7 

6.0 

4.6 

5.6 

4.6 

4.7 

6.8 

5.5 

5.7 

5.6 

4.5 

1.4 

3.7 

6.2 

5.5 

5.7 

6.0 

4.6 

5.6 

4.6 

4.7 

6.8 

5.5 

5.7 

5.6 

4.5 

1.4 

3.7 

6.2 

5.5 

5.7 

6.0 

4.6 

5.6 

4.6 

4.7 

6.8 

5.5 

5.7 

5.6 

4.5 

1.4 

3.7 

6.2 

5.5 

5.7 

6.0 

4.6 

5.6 

4.6 

4.7 

6.8 

5.5 

5.7 

5.6 

4.5 

1.4 

3.7 

6.2 

5.5 

5.7 

6.0 

4.6 

5.6 

4.6 

4.7 

6.8 

5.5 

5.7 

5.6 

4.5 

1.4 

3.7 

6.2 

5.5 

5.7 

6.0 

4.6 

5.6 

4.6 

4.7 

6.8 

5.5 

5.7 

5.6 

4.5 

1.4 

3.7 

6.2 

5.5 

5.7 

6.0 

4.6 

5.6 

452

 By assuming that the time losses changed proportionally to the extent of detriment. 

174 

 
 
 
                                                           
2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Latvia 

Lithuania 

5.8 

7.3 

Luxembourg  6.1 

Malta 

8.7 

Netherlands  4.5 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

5.6 

5.4 

7.2 

3.9 

4.9 

6.5 

3.8 

5.8 

7.3 

6.1 

8.7 

4.5 

5.6 

5.4 

7.2 

3.9 

4.9 

6.5 

3.8 

5.8 

7.3 

6.1 

8.7 

4.5 

5.6 

5.4 

7.2 

3.9 

4.9 

6.5 

3.8 

5.8 

7.3 

6.1 

8.7 

4.5 

5.6 

5.4 

7.2 

3.9 

4.9 

6.5 

3.8 

5.8 

7.3 

6.1 

8.7 

4.5 

5.6 

5.4 

7.2 

3.9 

4.9 

6.5 

3.8 

5.8 

7.3 

6.1 

8.7 

4.5 

5.6 

5.4 

7.2 

3.9 

4.9 

6.5 

3.8 

5.8 

7.3 

6.1 

8.7 

4.5 

5.6 

5.4 

7.2 

3.9 

4.9 

6.5 

3.8 

5.8 

7.3 

6.1 

8.7 

4.5 

5.6 

5.4 

7.2 

3.9 

4.9 

6.5 

3.8 

5.8 

7.3 

6.1 

8.7 

4.5 

5.6 

5.4 

7.2 

3.9 

4.9 

6.5 

3.8 

5.8 

7.3 

6.1 

8.7 

4.5 

5.6 

5.4 

7.2 

3.9 

4.9 

6.5 

3.8 

The consumer detriment resulting from time losses is monetised using the latest available 
Eurostat  data  on  the  mean  hourly  earnings  for  each  country  in  2014453  which  was  then 
adjusted  by  inflation  rates  over  the  period  2014-2019  observed  in  each  of  the  EU-27 
Member States in order to derive the current level of earnings, see table below.  

Monetised time losses per country, in millions of euros 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Austria 

73.0 

73.0 

73.0 

73.0 

73.0 

73.0 

73.0 

73.0 

73.0 

73.0 

Belgium 

89.7 

89.7 

89.7 

89.7 

89.7 

89.7 

89.7 

89.7 

89.7 

89.7 

Bulgaria 

12.2 

12.2 

12.2 

12.2 

12.2 

12.2 

12.2 

12.2 

12.2 

12.2 

Croatia 

29.1 

29.1 

29.1 

29.1 

29.1 

29.1 

29.1 

29.1 

29.1 

29.1 

Cyprus 

50.4 

50.4 

50.4 

50.4 

50.4 

50.4 

50.4 

50.4 

50.4 

50.4 

Czech 
Republic 

28.4 

28.4 

28.4 

28.4 

28.4 

28.4 

28.4 

28.4 

28.4 

28.4 

Denmark 

123.5  123.5  123.5  123.5  123.5  123.5  123.5  123.5  123.5  123.5 

Estonia 

8.3 

8.3 

8.3 

8.3 

8.3 

8.3 

8.3 

8.3 

8.3 

8.3 

Finland 

69.5 

69.5 

69.5 

69.5 

69.5 

69.5 

69.5 

69.5 

69.5 

69.5 

France 

100.2  100.2  100.2  100.2  100.2  100.2  100.2  100.2  100.2  100.2 

Germany 

93.7 

93.7 

93.7 

93.7 

93.7 

93.7 

93.7 

93.7 

93.7 

93.7 

453 Eurostat dataset: earn_ses_pub2s. 

175 

 
 
 
 
                                                           
2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Greece 

47.5 

47.5 

47.5 

47.5 

47.5 

47.5 

47.5 

47.5 

47.5 

47.5 

Hungary 

25.0 

25.0 

25.0 

25.0 

25.0 

25.0 

25.0 

25.0 

25.0 

25.0 

Ireland 

95.2 

95.2 

95.2 

95.2 

95.2 

95.2 

95.2 

95.2 

95.2 

95.2 

Italy 

75.0 

75.0 

75.0 

75.0 

75.0 

75.0 

75.0 

75.0 

75.0 

75.0 

Latvia 

21.3 

21.3 

21.3 

21.3 

21.3 

21.3 

21.3 

21.3 

21.3 

21.3 

Lithuania 

25.3 

25.3 

25.3 

25.3 

25.3 

25.3 

25.3 

25.3 

25.3 

25.3 

Luxembourg  124.9  124.9  124.9  124.9  124.9  124.9  124.9  124.9  124.9  124.9 

Malta 

80.8 

80.8 

80.8 

80.8 

80.8 

80.8 

80.8 

80.8 

80.8 

80.8 

Netherlands  78.1 

78.1 

78.1 

78.1 

78.1 

78.1 

78.1 

78.1 

78.1 

78.1 

Poland 

26.5 

26.5 

26.5 

26.5 

26.5 

26.5 

26.5 

26.5 

26.5 

26.5 

Portugal 

29.9 

29.9 

29.9 

29.9 

29.9 

29.9 

29.9 

29.9 

29.9 

29.9 

Romania 

17.2 

17.2 

17.2 

17.2 

17.2 

17.2 

17.2 

17.2 

17.2 

17.2 

Slovakia 

19.1 

19.1 

19.1 

19.1 

19.1 

19.1 

19.1 

19.1 

19.1 

19.1 

Slovenia 

38.8 

38.8 

38.8 

38.8 

38.8 

38.8 

38.8 

38.8 

38.8 

38.8 

Spain 

68.5 

68.5 

68.5 

68.5 

68.5 

68.5 

68.5 

68.5 

68.5 

68.5 

Sweden 

75.4 

75.4 

75.4 

75.4 

75.4 

75.4 

75.4 

75.4 

75.4 

75.4 

Step 3. Estimate rate of problems per purchase 

The calculation of the problem rate for the period 2021-2030 uses the latest data point (for 
year 2018) on problem rate, as estimated by the CCD Evaluation. The extrapolation for the 
period  2021-30  was  then  done  based  on  trend  analysis  relying  on  clustering  of  Member 
States depending on the past rates of decline in the problem rate.454 This is shown below. 

Rate of problems 2021-2030 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Austria 

4.8% 

4.8% 

4.8% 

4.8% 

4.8% 

4.8% 

4.8% 

4.8% 

4.8% 

4.8% 

Belgium 

7.2% 

7.2% 

7.2% 

7.2% 

7.2% 

7.2% 

7.2% 

7.2% 

7.2% 

7.2% 

Bulgaria 

13.3%  12.8%  12.3%  11.8%  11.2%  10.7%  10.2%  9.7% 

9.2% 

8.6% 

Croatia 

7.9% 

7.9% 

7.9% 

7.9% 

7.9% 

7.9% 

7.9% 

7.9% 

7.9% 

7.9% 

Cyprus 

11.5%  11.0%  10.5%  10.0%  9.5% 

8.9% 

8.4% 

7.9% 

7.4% 

6.8% 

454 EU-27 were classified in 3 groups depending on the cumulative rate of decline in the problem observed 
between 2010-18. Group A: <= 5.99%, Group B: 6-9.99%, and Group C: >= 10%. For the period 2020-30, 
countries  from  Group  C  were  assumed  to  continue  to  experience  the  reduction  in  problem  year  with  0.5% 
reduction pa while the problem rate for countries in Group A and B was assumed to remain constant over the 
whole baseline scenario.  

176 

 
 
 
 
                                                           
2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

14.5%  14.0%  13.4%  12.9%  12.4%  11.9%  11.4%  10.8%  10.3%  9.8% 

Czech 
Republic 

Denmark 

7.5% 

7.5% 

7.5% 

7.5% 

7.5% 

7.5% 

7.5% 

7.5% 

7.5% 

7.5% 

Estonia 

0.2% 

0.2% 

0.2% 

0.2% 

0.2% 

0.2% 

0.2% 

0.2% 

0.2% 

0.2% 

Finland 

3.2% 

3.2% 

3.2% 

3.2% 

3.2% 

3.2% 

3.2% 

3.2% 

3.2% 

3.2% 

France 

2.2% 

2.2% 

2.2% 

2.2% 

2.2% 

2.2% 

2.2% 

2.2% 

2.2% 

2.2% 

Germany 

3.2% 

3.2% 

3.2% 

3.2% 

3.2% 

3.2% 

3.2% 

3.2% 

3.2% 

3.2% 

Greece 

10.1%  9.6% 

9.1% 

8.6% 

8.0% 

7.5% 

7.0% 

6.5% 

5.9% 

5.4% 

Hungary 

5.0% 

5.0% 

5.0% 

5.0% 

5.0% 

5.0% 

5.0% 

5.0% 

5.0% 

5.0% 

Ireland 

6.1% 

6.1% 

6.1% 

6.1% 

6.1% 

6.1% 

6.1% 

6.1% 

6.1% 

6.1% 

Italy 

7.4% 

7.4% 

7.4% 

7.4% 

7.4% 

7.4% 

7.4% 

7.4% 

7.4% 

7.4% 

Latvia 

3.5% 

3.5% 

3.5% 

3.5% 

3.5% 

3.5% 

3.5% 

3.5% 

3.5% 

3.5% 

Lithuania 

4.7% 

4.7% 

4.7% 

4.7% 

4.7% 

4.7% 

4.7% 

4.7% 

4.7% 

4.7% 

Luxembourg  1.9% 

1.9% 

1.9% 

1.9% 

1.9% 

1.9% 

1.9% 

1.9% 

1.9% 

1.9% 

Malta 

7.1% 

7.1% 

7.1% 

7.1% 

7.1% 

7.1% 

7.1% 

7.1% 

7.1% 

7.1% 

Netherlands  3.5% 

3.5% 

3.5% 

3.5% 

3.5% 

3.5% 

3.5% 

3.5% 

3.5% 

3.5% 

Poland 

9.5% 

9.5% 

9.5% 

9.5% 

9.5% 

9.5% 

9.5% 

9.5% 

9.5% 

9.5% 

Portugal 

9.9% 

9.4% 

8.8% 

8.3% 

7.8% 

7.3% 

6.8% 

6.2% 

5.7% 

5.2% 

Romania 

10.7%  10.2%  9.6% 

9.1% 

8.6% 

8.1% 

7.6% 

7.0% 

6.5% 

6.0% 

Slovakia 

11.2%  10.7%  10.2%  9.7% 

9.1% 

8.6% 

8.1% 

7.6% 

7.1% 

6.5% 

Slovenia 

3.3% 

3.3% 

3.3% 

3.3% 

3.3% 

3.3% 

3.3% 

3.3% 

3.3% 

3.3% 

Spain 

18.0%  17.4%  16.9%  16.4%  15.9%  15.3%  14.8%  14.3%  13.8%  13.3% 

Sweden 

5.4% 

5.4% 

5.4% 

5.4% 

5.4% 

5.4% 

5.4% 

5.4% 

5.4% 

5.4% 

Step 4. Estimate the market penetration 

The  number  of  purchases  of  consumer  credit  products  for  the  staring  year  2021  was 
derived  based  on  the  latest  available  estimate  for  the  year  2018,  as  per  the  CCD 
Evaluation.  The  latter  was  extrapolated  for  the  whole  interval  2010-2018  based  on  the 
Eurobarometer data (2003, 2011, 2016) on the percentage of respondents who purchased at 
least  one  loan,  debit  or  credit  card.  For  the  period  2021-30,  gauging  the  level  of  market 
penetration is inherently difficult. This is also because it is likely to be driven be numerous 
factors that include: impact of COVID-19 and subsequent pace of economic recovery (and 
hence  unemployment  rate  and  degree  of  tightening  of  credit  conditions,  among  others), 
monetary  policies  pursued  by  ECB  and  central  banks  from  non-Eurozone  countries  (and 
hence  prevailing  interest  rates)  or/and  the  impact  of  technological  changes  on  the  access 

177 

 
 
 
and  demand  for  credit  (e.g.  digitalisation).  Moreover,  the  Eurobarometer  data  used  to 
define the baseline scenario for the period 2010-2018 points to rather puzzling findings – 
market  penetration  of  credit  in  many  EU  Member  States  kept  increasing  after  the  Great 
Financial  Crisis  (GFC)  until  2014-15,  and  then  once  the  recovery  gained  full  speed  it 
started  decreasing.  Typically,  empirical  data  from  the  past  economic  crises  shows  the 
opposite.  Therefore,  consistent  with  approach  to  some  other  assumptions,  the  market 
penetration for the period 2021-30 is assumed to stay constant. 

Market penetration of consumer credit 2021-2030 (in %) 

Austria 

Belgium 

Bulgaria 

Croatia 

Cyprus 

2021  2022  2023  2024  2025  2026  2027  2028  2029  2030 

55.0 

55.0 

55.0 

55.0 

55.0 

55.0 

55.0 

55.0 

55.0 

55.0 

24.6 

24.6 

24.6 

24.6 

24.6 

24.6 

24.6 

24.6 

24.6 

24.6 

22.0 

22.0 

22.0 

22.0 

22.0 

22.0 

22.0 

22.0 

22.0 

22.0 

33.0 

33.0 

33.0 

33.0 

33.0 

33.0 

33.0 

33.0 

33.0 

33.0 

25.0 

25.0 

25.0 

25.0 

25.0 

25.0 

25.0 

25.0 

25.0 

25.0 

Czech Republic 

21.6 

21.6 

21.6 

21.6 

21.6 

21.6 

21.6 

21.6 

21.6 

21.6 

Denmark 

25.3 

25.3 

25.3 

25.3 

25.3 

25.3 

25.3 

25.3 

25.3 

25.3 

Estonia 

Finland 

France 

31.2 

31.2 

31.2 

31.2 

31.2 

31.2 

31.2 

31.2 

31.2 

31.2 

25.8 

25.8 

25.8 

25.8 

25.8 

25.8 

25.8 

25.8 

25.8 

25.8 

66.0 

66.0 

66.0 

66.0 

66.0 

66.0 

66.0 

66.0 

66.0 

66.0 

Germany 

53.7 

53.7 

53.7 

53.7 

53.7 

53.7 

53.7 

53.7 

53.7 

53.7 

Greece 

33.3 

33.3 

33.3 

33.3 

33.3 

33.3 

33.3 

33.3 

33.3 

33.3 

Hungary 

15.7 

15.7 

15.7 

15.7 

15.7 

15.7 

15.7 

15.7 

15.7 

15.7 

Ireland 

Italy 

Latvia 

24.4 

24.4 

24.4 

24.4 

24.4 

24.4 

24.4 

24.4 

24.4 

24.4 

32.4 

32.4 

32.4 

32.4 

32.4 

32.4 

32.4 

32.4 

32.4 

32.4 

29.5 

29.5 

29.5 

29.5 

29.5 

29.5 

29.5 

29.5 

29.5 

29.5 

Lithuania 

19.1 

19.1 

19.1 

19.1 

19.1 

19.1 

19.1 

19.1 

19.1 

19.1 

Luxembourg 

52.0 

52.0 

52.0 

52.0 

52.0 

52.0 

52.0 

52.0 

52.0 

52.0 

Malta 

27.5 

27.5 

27.5 

27.5 

27.5 

27.5 

27.5 

27.5 

27.5 

27.5 

Netherlands 

25.5 

25.5 

25.5 

25.5 

25.5 

25.5 

25.5 

25.5 

25.5 

25.5 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

18.1 

18.1 

18.1 

18.1 

18.1 

18.1 

18.1 

18.1 

18.1 

18.1 

20.9 

20.9 

20.9 

20.9 

20.9 

20.9 

20.9 

20.9 

20.9 

20.9 

23.9 

23.9 

23.9 

23.9 

23.9 

23.9 

23.9 

23.9 

23.9 

23.9 

20.5 

20.5 

20.5 

20.5 

20.5 

20.5 

20.5 

20.5 

20.5 

20.5 

20.7 

20.7 

20.7 

20.7 

20.7 

20.7 

20.7 

20.7 

20.7 

20.7 

178 

 
 
 
Spain 

Sweden 

2021  2022  2023  2024  2025  2026  2027  2028  2029  2030 

21.7 

21.7 

21.7 

21.7 

21.7 

21.7 

21.7 

21.7 

21.7 

21.7 

27.0 

27.0 

27.0 

27.0 

27.0 

27.0 

27.0 

27.0 

27.0 

27.0 

The total number of purchases of consumer credit per country was obtained by multiplying 
the market penetration by the population of each EU 27 country. 

Step 5. Calculate the personal consumer detriment (financial and time loss) for the period 
2021-2030 

To calculate the consumer financial detriment, the rate of problems was multiplied by the 
total number of purchases and by the magnitude of a problem for each country. The results 
are presented below. 

Consumer financial detriment, 2021-2030, in EUR mln 

MS 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Austria 

 19.56  

 19.43  

 19.48  

 19.53  

 19.59  

 19.64  

 19.69  

 19.75  

 19.80  

 19.85  

Belgium 

 13.44  

 13.39  

 13.42  

 13.45  

 13.48  

 13.51  

 13.54  

 13.57  

 13.60  

 13.62  

Bulgaria 

 23.63  

 22.57  

 21.52  

 20.49  

 19.47  

 18.47  

 17.48  

 16.51  

 15.55  

 14.60  

Croatia 

 17.91  

 17.90  

 17.94  

 17.98  

 18.02  

 18.06  

 18.10  

 18.14  

 18.18  

 18.23  

Cyprus 

 3.74  

 3.61  

 3.48  

 3.34  

 3.20  

 3.06  

 2.91  

 2.76  

 2.61  

 2.46  

Czech 
Republic 

 38.59  

 37.27  

 35.95  

 34.63  

 33.31  

 31.98  

 30.66  

 29.33  

 28.00  

 26.67  

Denmark 

 11.37  

 11.40  

 11.43  

 11.46  

 11.49  

 11.52  

 11.54  

 11.57  

 11.60  

 11.63  

Estonia 

 0.08  

 0.08  

 0.08  

 0.08  

 0.08  

 0.08  

 0.08  

 0.08  

 0.08  

 0.08  

Finland 

 1.51  

 1.51  

 1.51  

 1.51  

 1.51  

 1.51  

 1.51  

 1.51  

 1.51  

 1.51  

France 

 81.47  

 81.66  

 81.85  

 82.03  

 82.22  

 82.41  

 82.60  

 82.78  

 82.97  

 83.16  

Germany 

 115.52    115.57    115.61    115.66    115.70    115.75    115.79    115.83    115.88    115.92  

Greece 

 46.76  

 44.30  

 41.86  

 39.43  

 37.03  

 34.64  

 32.27  

 29.92  

 27.58  

 25.26  

Hungary 

 9.01  

 9.00  

 8.98  

 8.97  

 8.96  

 8.94  

 8.93  

 8.91  

 8.90  

 8.88  

Ireland 

 7.50  

 7.57  

 7.65  

 7.73  

 7.81  

 7.89  

 7.97  

 8.05  

 8.14  

 8.22  

Italy 

 198.39    198.28    198.16    198.05    197.94    197.82    197.71    197.60    197.48    197.37  

Latvia 

 2.63  

 2.60  

 2.57  

 2.54  

 2.52  

 2.49  

 2.46  

 2.44  

 2.41  

 2.38  

Lithuania 

 2.75  

 2.73  

 2.71  

 2.69  

 2.67  

 2.64  

 2.62  

 2.60  

 2.58  

 2.56  

Luxembourg  0.85  

 0.85  

 0.86  

 0.87  

 0.88  

 0.89  

 0.90  

 0.91  

 0.92  

 0.93  

Malta 

 1.27  

 1.27  

 1.27  

 1.27  

 1.27  

 1.27  

 1.27  

 1.27  

 1.27  

 1.27  

Netherlands   21.83  

 21.90  

 21.97  

 22.04  

 22.11  

 22.18  

 22.25  

 22.32  

 22.39  

 22.47  

179 

 
 
 
MS 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Poland 

 100.28    100.04    99.79  

 99.54  

 99.30  

 99.05  

 98.81  

 98.57  

 98.32  

 98.08  

Portugal 

 32.84  

 31.13  

 29.43  

 27.73  

 26.05  

 24.36  

 22.69  

 21.02  

 19.36  

 17.70  

Romania 

 62.61  

 59.22  

 55.88  

 52.60  

 49.36  

 46.16  

 43.02  

 39.92  

 36.87  

 33.87  

Slovakia 

 21.85  

 20.87  

 19.90  

 18.92  

 17.95  

 16.97  

 16.00  

 15.03  

 14.05  

 13.08  

Slovenia 

 1.50  

 1.50  

 1.51  

 1.51  

 1.51  

 1.51  

 1.51  

 1.51  

 1.51  

 1.51  

Spain 

 243.44    237.27    231.06    224.81    218.52    212.19    205.82    199.42    192.97    186.48  

Sweden 

 17.28  

 17.41  

 17.53  

 17.66  

 17.79  

 17.92  

 18.05  

 18.18  

 18.31  

 18.44  

To calculate the total cost corresponding to the time losses the monetised time losses per 
problem were multiplied by the total number of problems (i.e. rate of problems by the total 
number of purchases) for each country, see table below. 

Total time losses in EUR mln, 2021-2030 

MS 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Austria 

14.2 

14.3 

14.3 

14.3 

14.4 

14.4 

14.5 

14.5 

14.5 

14.6 

Belgium 

14.7 

14.7 

14.7 

14.8 

14.8 

14.8 

14.9 

14.9 

14.9 

15.0 

Bulgaria 

Croatia 

Cyprus 

Czech 
Republic 

2.0 

2.6 

1.1 

7.7 

2.0 

2.6 

1.0 

7.5 

1.9 

2.6 

1.0 

7.2 

1.8 

2.6 

0.9 

6.9 

1.7 

2.6 

0.9 

6.6 

1.6 

2.6 

0.8 

6.4 

1.5 

2.6 

0.8 

6.1 

1.4 

2.6 

0.8 

5.8 

1.3 

2.6 

0.7 

5.5 

1.2 

2.6 

0.7 

5.3 

Denmark 

11.0 

11.0 

11.0 

11.1 

11.1 

11.1 

11.2 

11.2 

11.2 

11.2 

Estonia 

Finland 

0.0 

2.5 

0.0 

2.5 

0.0 

2.5 

0.0 

2.5 

0.0 

2.5 

0.0 

2.5 

0.0 

2.5 

0.0 

2.5 

0.0 

2.5 

0.0 

2.5 

France 

76.2 

76.4 

76.6 

76.7 

76.9 

77.1 

77.3 

77.5 

77.6 

77.8 

Germany 

112.4  112.5  112.5  112.6  112.6  112.7  112.7  112.7  112.8  112.8 

Greece 

14.1 

13.3 

12.6 

11.8 

11.0 

10.3 

1.6 

5.4 

1.6 

5.4 

1.6 

5.5 

1.6 

5.5 

1.6 

5.6 

1.6 

5.6 

9.5 

1.6 

5.7 

8.8 

1.6 

5.8 

8.1 

1.6 

5.8 

7.3 

1.6 

5.9 

90.9 

90.8 

90.8 

90.7 

90.7 

90.6 

90.6 

90.5 

90.5 

90.4 

0.3 

0.5 

0.6 

0.7 

9.8 

0.3 

0.5 

0.7 

0.7 

9.8 

0.3 

0.5 

0.7 

0.7 

9.9 

0.3 

0.5 

0.7 

0.7 

9.9 

180 

0.3 

0.5 

0.7 

0.7 

9.9 

0.3 

0.5 

0.7 

0.7 

0.3 

0.5 

0.7 

0.7 

0.3 

0.5 

0.7 

0.7 

0.3 

0.5 

0.7 

0.7 

10.0 

10.0 

10.0 

10.1 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

0.3 

0.5 

Luxembourg  0.6 

Malta 

0.7 

Netherlands  9.8 

 
 
MS 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Poland 

14.1 

14.1 

14.0 

14.0 

13.9 

13.9 

13.9 

13.8 

13.8 

13.8 

Portugal 

Romania 

Slovakia 

Slovenia 

5.3 

6.8 

2.0 

0.5 

5.0 

6.4 

1.9 

0.5 

4.7 

6.1 

1.8 

0.5 

4.4 

5.7 

1.7 

0.5 

4.1 

5.3 

1.6 

0.5 

3.9 

5.0 

1.5 

0.5 

3.6 

4.6 

1.4 

0.5 

3.3 

4.3 

1.3 

0.5 

3.0 

3.9 

1.2 

0.5 

2.7 

3.6 

1.1 

0.5 

Spain 

104.2  101.4  98.7 

95.9 

93.1 

90.4 

87.5 

84.7 

81.9 

79.0 

Sweden 

9.0 

9.1 

9.1 

9.2 

9.3 

9.3 

9.4 

9.5 

9.5 

9.6 

Step 6. Calculate the net benefit of CCD in terms of personal consumer detriment 

The  net  benefit  of  CCD  in  a  given  year  has  been  assumed  to  be  15%  of  the  difference 
between  the  financial  detriment  on  that  year  and  the  financial  detriment  at  the  baseline 
(beginning of 2021). The below table shows the reduction of financial consumer detriment 
per Member State using the 15% figure. 

Reduction of financial consumer detriment due to CCD 2021-2030, EUR mln 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030  NPV  in 

EUR 
mln 

Austria 

0.224 

0.419 

0.615 

0.812 

1.011 

1.210 

1.411 

1.612 

1.815 

2.019 

8.5 

Belgium 

0.147 

0.283 

0.419 

0.556 

0.693 

0.831 

0.969 

1.109 

1.248 

1.389 

5.8 

Bulgaria 

0.330 

0.642 

0.938 

1.217 

1.480 

1.727 

1.959 

2.176 

2.377 

2.564 

11.8 

Croatia 

0.158 

0.309 

0.461 

0.613 

0.767 

0.920 

1.075 

1.230 

1.386 

1.543 

6.5 

Cyprus 

0.052 

0.102 

0.150 

0.195 

0.239 

0.281 

0.320 

0.358 

0.393 

0.425 

1.9 

Czech 
Republic 

0.531 

1.040 

1.526 

1.990 

2.431 

2.850 

3.246 

3.619 

3.970 

4.297 

19.6 

Denmark 

0.117 

0.235 

0.353 

0.472 

0.591 

0.712 

0.832 

0.954 

1.076 

1.199 

5.0 

Estonia 

0.003 

0.002 

0.002 

0.002 

0.002 

0.002 

0.002 

0.002 

0.002 

0.002 

0.0 

Finland 

0.020 

0.040 

0.060 

0.080 

0.099 

0.119 

0.139 

0.159 

0.179 

0.199 

0.8 

France 

0.607 

1.217 

1.831 

2.446 

3.065 

3.687 

4.311 

4.939 

5.569 

6.202 

25.8 

Germany 

1.013 

2.027 

3.042 

4.057 

5.073 

6.090 

7.108 

8.127 

9.146 

10.166  42.6 

Greece 

0.772 

1.500 

2.183 

2.823 

3.419 

3.973 

4.485 

4.955 

5.383 

5.771 

27.1 

Hungary 

0.075 

0.150 

0.224 

0.298 

0.372 

0.446 

0.520 

0.593 

0.666 

0.739 

3.1 

Ireland 

0.067 

0.136 

0.206 

0.278 

0.352 

0.427 

0.504 

0.582 

0.662 

0.744 

3.0 

Italy 

1.741 

3.480 

5.217 

6.952 

8.685 

10.416  12.145  13.872  15.597  17.321  72.9 

Latvia 

0.026 

0.052 

0.077 

0.101 

0.125 

0.149 

0.172 

0.195 

0.217 

0.238 

1.0 

181 

 
 
 
2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030  NPV  in 

EUR 
mln 

Lithuania 

0.022 

0.043 

0.064 

0.085 

0.105 

0.125 

0.145 

0.165 

0.184 

0.203 

0.9 

Luxembourg  0.005 

0.011 

0.017 

0.022 

0.028 

0.034 

0.040 

0.047 

0.053 

0.060 

0.2 

Malta 

0.007 

0.014 

0.021 

0.028 

0.036 

0.043 

0.050 

0.057 

0.064 

0.071 

0.3 

Netherlands  0.226 

0.454 

0.684 

0.915 

1.147 

1.381 

1.617 

1.854 

2.092 

2.332 

9.7 

Poland 

0.899 

1.794 

2.685 

3.572 

4.454 

5.331 

6.205 

7.074 

7.940 

8.801 

37.2 

Portugal 

0.551 

1.071 

1.559 

2.017 

2.443 

2.839 

3.204 

3.539 

3.844 

4.119 

19.4 

Romania 

0.941 

1.829 

2.664 

3.450 

4.185 

4.872 

5.511 

6.104 

6.651 

7.153 

33.4 

Slovakia 

0.412 

0.801 

1.165 

1.505 

1.822 

2.114 

2.383 

2.627 

2.848 

3.044 

14.4 

Slovenia 

0.015 

0.030 

0.044 

0.059 

0.074 

0.089 

0.104 

0.119 

0.134 

0.149 

0.6 

Spain 

2.763 

5.439 

8.027 

10.527  12.938  15.259  17.488  19.626  21.671  23.622  105.3 

Sweden 

0.202 

0.407 

0.615 

0.826 

1.041 

1.259 

1.479 

1.704 

1.931 

2.162 

8.9 

EU 27 

11.927  23.525  34.849  45.900  56.679  67.187  77.425  87.395  97.097  106.532  466.0 

In the same vein, the net benefits of CCD in terms of savings in time losses was assumed 
to  be  15%  reduction  of  the  total  monetised  time  losses  (i.e.,  monetised  time  losses  per 
problem  multiplied  by  the  number  of  problems)  in  the  period  2021-2030  (i.e.,  difference 
between  the  values  for  a  given  year  and  the  baseline).  The  below  table  shows  the  total 
savings per Member State. 

Total savings in time losses, in million euros, 2021-2030  

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030  NPV  in 

EUR 
mln 

Austria 

2.13 

2.14 

2.15 

2.15 

2.16 

2.16 

2.17 

2.18 

2.18 

2.19 

17.51 

Belgium 

2.20 

2.21 

2.21 

2.22 

2.22 

2.23 

2.23 

2.24 

2.24 

2.25 

18.03 

Bulgaria 

0.31 

0.29 

0.28 

0.26 

0.25 

0.24 

0.22 

0.21 

0.20 

0.19 

2.02 

Croatia 

0.38 

0.38 

0.38 

0.39 

0.39 

0.39 

0.39 

0.39 

0.39 

0.39 

3.14 

Cyprus 

0.16 

0.15 

0.15 

0.14 

0.13 

0.13 

0.12 

0.11 

0.11 

0.10 

1.07 

Czech 
Republic 

1.16 

1.12 

1.08 

1.04 

1.00 

0.96 

0.91 

0.87 

0.83 

0.79 

8.02 

Denmark 

1.65 

1.65 

1.66 

1.66 

1.67 

1.67 

1.67 

1.68 

1.68 

1.69 

13.51 

Estonia 

0.00 

0.00 

0.00 

0.00 

0.00 

0.00 

0.00 

0.00 

0.00 

0.00 

0.01 

Finland 

0.38 

0.38 

0.38 

0.38 

0.38 

0.38 

0.38 

0.38 

0.38 

0.38 

3.08 

France 

11.43 

11.46 

11.49 

11.51 

11.54 

11.57 

11.59 

11.62 

11.64 

11.67 

93.63 

182 

 
 
 
 
2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030  NPV  in 

EUR 
mln 

Germany 

16.87 

16.87 

16.88 

16.88 

16.89 

16.90 

16.90 

16.91 

16.92 

16.92 

137.01 

Greece 

2.12 

2.00 

1.89 

1.77 

1.66 

1.54 

1.43 

1.32 

1.21 

1.10 

13.30 

Hungary 

0.24 

0.24 

0.24 

0.24 

0.24 

0.24 

0.24 

0.24 

0.24 

0.23 

1.92 

Ireland 

0.80 

0.81 

0.82 

0.83 

0.84 

0.85 

0.85 

0.86 

0.87 

0.88 

6.81 

Italy 

13.63 

13.62 

13.61 

13.61 

13.60 

13.59 

13.58 

13.58 

13.57 

13.56 

110.29 

Latvia 

0.05 

0.05 

0.05 

0.05 

0.05 

0.05 

0.05 

0.05 

0.05 

0.05 

0.40 

Lithuania 

0.08 

0.08 

0.08 

0.08 

0.07 

0.07 

0.07 

0.07 

0.07 

0.07 

0.60 

Luxembourg  0.10 

0.10 

0.10 

0.10 

0.10 

0.10 

0.10 

0.10 

0.10 

0.11 

0.81 

Malta 

0.10 

0.10 

0.10 

0.10 

0.10 

0.10 

0.10 

0.10 

0.10 

0.10 

0.82 

Netherlands  1.47 

1.47 

1.48 

1.48 

1.49 

1.49 

1.50 

1.50 

1.50 

1.51 

12.06 

Poland 

2.11 

2.11 

2.10 

2.10 

2.09 

2.09 

2.08 

2.08 

2.07 

2.07 

16.96 

Portugal 

0.79 

0.75 

0.71 

0.66 

0.62 

0.58 

0.54 

0.49 

0.45 

0.41 

4.98 

Romania 

1.03 

0.97 

0.91 

0.85 

0.80 

0.74 

0.69 

0.64 

0.59 

0.54 

6.43 

Slovakia 

0.29 

0.28 

0.27 

0.25 

0.24 

0.22 

0.21 

0.20 

0.18 

0.17 

1.91 

Slovenia 

0.07 

0.07 

0.07 

0.07 

0.07 

0.07 

0.07 

0.07 

0.07 

0.07 

0.56 

Spain 

15.62 

15.21 

14.80 

14.39 

13.97 

13.55 

13.13 

12.71 

12.28 

11.85 

112.64 

Sweden 

1.35 

1.36 

1.37 

1.38 

1.39 

1.40 

1.41 

1.42 

1.43 

1.44 

11.27 

EU 27 

76.52 

75.88 

75.24 

74.59 

73.94 

73.30 

72.65 

72.01 

71.36 

70.71 

598.81 

Costs (baseline scenario) 

The costs of the CCD for creditors and public administrators (both, national and EU-level) 
are related to compliance, monitoring and enforcement and can be subdivided into: one-off 
costs and ongoing costs. The one-off costs relate to costs that credit providers and public 
administrators  incurred  when  the  CCD  was  implemented.  Ongoing  costs  are  costs  that 
providers  and  public  administrators  have  continued  to  face  after  the  introduction  of  the 
CCD. Note that for the baseline scenario, only ongoing costs are relevant as one-off costs 
related to the introduction of the CCD and its transposition had been already incurred back 
in 2010s.  

183 

 
 
 
The  methodology  proposed  to  estimate  the  costs  for  providers  and  public  administrators 
reflects the approach used in the CCD Evaluation that in turn drew on Europe Economics 
study (2007).455 

Costs for public administrations 

The recurrent costs of public administrations related to the implementation of the CCD are 
related to the monitoring of compliance of credit providers with the Directive, reporting 
and  enforcement  of  the  Directive  (e.g.  sweeps,  investigations).  The  methodology  and 
assumptions followed to calculate these costs are summarised in the below table. 

Approach to recurrent costs of public administrations 

Recurrent cost 

Methodology 

Assumptions 

Monitoring 

Enforcement 

Reporting 

Maintaining database 

Unit cost = No. of days per 
person X Average daily wages 
for the public sector X No. of 
persons involved 

Total cost = Unit cost X 28 
Member States 

Total cost = Unit cost X 28 
Member States 

1 official per MS 

1 to 2 days per official per 
month to monitor compliance 
(e.g. scanning websites of 
banks) 

Average daily wage for the 
public sector per country from 
Eurostat 

Unit cost = No. of days per 
person X Average daily wages 
for the public sector X No. of 
persons involved 

2 official per MS 

1 to 2 days per official per 
month 

Total cost = Unit cost X 28 
Member States 

Average daily wage for the 
public sector per country from 
Eurostat 

Unit cost = No. of days per 
person X Average daily wages 
for the public sector X No. of 
persons involved 

1 official per MS 

2 to 3 days per official per 
year 

Total cost = Unit cost X 28 
Member States 

Average daily wage for the 
public sector per country from 
Eurostat 

Unit cost = No. of days per 
person X Average daily wages 
for the public sector X No. of 
persons involved 

Total cost = Unit cost X 28 
Member States 

1 official per MS 

1 to 2 days per month 

Average daily wage for the 
public sector per country from 
Eurostat 

455  Europe  Economics.,  2007.  An  analysis  of  the  issue  of  consumer  detriment  and  the  most  appropriate 
methodologies 
europa. 
eu/consumers/strategy/docs/study_consumer_detriment. pdf. 

SANCO. 

http://ec. 

estimate 

URL: 

DG 

it. 

to 

184 

 
 
                                                           
Costs for financial providers 

The  recurrent  costs  of  the  financial  providers  to  comply  with  the  CCD  depend  on  their 
level  of  compliance  with  the  Directive  and  their  need  to  adjust  their  operations  to  the 
Directive  (which  in  some  cases  was  not  necessary  as  the  credit  providers  were  already 
operating  in  line  with  the  key  requirements  of  the  Directive).  See  the  below  table  for  a 
description of the approach followed to calculate these costs. 

Approach to calculate recurrent costs of financial providers 

Recurrent cost 

Methodology 

Assumptions 

Compliance with 
advertisement requirements 

Unit cost = Extra cost of 
advertisement x number of 
advertisements per year 

Total costs = Unit cost x 
Number of credit institutions 

Extra cost per advertisement = 
€5 - €10 

Number of advertisements per 
year = 365 

Compliance with Pre-
contractual 
information/SECCI 
requirements 

Compliance with credit 
worthiness assessment 
requirements 

1 member of the front desk 

0.1 hours per person 

Unit cost = No. of days per 
person X Average daily wages 
for the financial sector X No. 
of persons involved 

Total cost = Unit cost X No. of 
credit requests X percentage of 
credit request done in person 

Unit costs = No. of days per 
person X Average daily wages 
for the financial sector X No. 
of persons involved (the unit 
cost depends on the level of 
burden) 

For 15% of the credit request a 
creditworthiness was not done 
before CCD and due to CCD 
this was reduced to 10% 

1 staff member 

0.05-0.10 days per request in 
countries depending on their 
level of burden 

Total cost = Unit cost X No. of 
credit requests for which a 
credit worthiness would not 
been done in the absence of 
CCD 

In  addition,  in  order  to  estimate  recurrent  costs  of  financial  providers  under  baseline 
scenario, the impact assessment supporting study had to also estimate several variables that 
characterise the population of the financial provides over the period 2021-2030 including: 

-  number of credit institution operating in each Member State; 
- 
- 
-  number of consumers’ requests for loans. 

size of the workforce in credit institutions; 
average daily wage for the employees in credit institutions; 

Those were derived using historical values and trends (e.g. ECB data on number of credit 
institutions and workforce employed, Eurostat data on wages in financial sector, the data 

185 

 
 
on  number  of  loan  requests  used  in  the  2019  CCD  Evaluation),  and  subject  to  some 
specific adjustment related to the impact of COVID-19.  

Regarding  number  of  credit  institutions  operating  in  each  Member  State  over  the  period 
2020-2030  (though,  baseline  considers  2021-2030),  it  was  assumed  that  the  impact  of 
COVID-19 may be more moderate than the impact observed in the aftermath of the Great 
Financial Crisis (GFC). This is because capital positions and liquidity in the banking sector 
across the EU were much better shortly after the breakout of pandemic than in the period 
following  the  GFC,  and  hence  the  impact  of  COVID-19  on  banks,  including  credit 
origination and supply on the one hand and solvency & liquidity on the other, may not be 
as pronounced and as long as in case of GFC. In short, the impact of COVID-19 in terms 
of reducing the number of CIs in a given Member State was assumed to be half as strong as 
GFC,  and  regional  differences  were  also  taken  into  account  by  clustering  countries  into 
four  groups  depending  on  the  COVID-19  magnitude  of  shock,  assumed  based  on  values 
observed in the aftermath of the GFC.  

Reduction in number of CIs, annual rate following 2010-2013 (GFC – historical data) & assumed 
annual rate following COVID-19 shock.  

Annual  rate  of  change 
2010-13 

Annual rate of change 
2020-23 
as 
assumption 

used 

CEE Region (PL, HU, CZ, SI, SK, BG, RO, HR) -1.1% 

Baltic States (LT, LV, ET) 

37.6% 

Southern  Eurozone Member  States  (PT,  ES,  IT, 
MT, CY, EL)  

-6.5% 

Core Eurozone (DE, FR, BE, NL, LU, IE, AT) 

-2.3% 

Scandinavia (FI, SE, DK) 

-1.7% 

-0.6% 

0.0% 

-3.2% 

-1.2% 

-0.8% 

Note: Outlier data for Baltic States for 2010-2013 reflects changes in the methodology. 

The table below shows final baseline projection for the period 2020-2030. 

Number of CIs, 2020-2030 

2020  2021  2022  2023  2024  2025  2026  2027  2028  2029  2030 

Austria 

516 

510 

504 

498 

498 

498 

498 

498 

498 

498 

498 

Belgium 

Bulgaria 

Croatia 

Cyprus 

Czechia 

Denmark 

Estonia 

83 

25 

24 

28 

58 

99 

38 

82 

25 

24 

27 

57 

98 

38 

81 

25 

24 

26 

57 

98 

38 

80 

24 

23 

25 

57 

97 

38 

80 

24 

23 

25 

57 

97 

38 

80 

24 

23 

25 

57 

97 

38 

80 

24 

23 

25 

57 

97 

38 

80 

24 

23 

25 

57 

97 

38 

80 

24 

23 

25 

57 

97 

38 

80 

24 

23 

25 

57 

97 

38 

80 

24 

23 

25 

57 

97 

38 

186 

 
 
  
 
Finland 

239 

237 

235 

233 

233 

233 

233 

233 

233 

233 

233 

France 

401 

397 

392 

388 

388 

388 

388 

388 

388 

388 

388 

Germany 

1513  1496  1479  1462  1462  1462  1462  1462  1462  1462  1462 

Greece 

Hungary 

34 

46 

33 

45 

32 

45 

31 

45 

31 

45 

31 

45 

31 

45 

31 

45 

31 

45 

31 

45 

31 

45 

Ireland 

308 

305 

301 

298 

298 

298 

298 

298 

298 

298 

298 

Italy 

Latvia 

Lithuania 

469 

454 

439 

425 

425 

425 

425 

425 

425 

425 

425 

54 

83 

54 

83 

54 

83 

54 

83 

54 

83 

54 

83 

54 

83 

54 

83 

54 

83 

54 

83 

54 

83 

Luxembourg  126 

124 

123 

121 

121 

121 

121 

121 

121 

121 

121 

Malta 

24 

Netherlands  92 

23 

91 

23 

90 

22 

89 

22 

89 

22 

89 

22 

89 

22 

89 

22 

89 

22 

89 

22 

89 

Poland 

623 

620 

616 

613 

613 

613 

613 

613 

613 

613 

613 

Portugal 

146 

141 

137 

132 

132 

132 

132 

132 

132 

132 

132 

Romania 

Slovakia 

Slovenia 

75 

27 

17 

74 

27 

17 

74 

27 

17 

73 

26 

17 

73 

26 

17 

73 

26 

17 

73 

26 

17 

73 

26 

17 

73 

26 

17 

73 

26 

17 

73 

26 

17 

Spain 

190 

184 

178 

172 

172 

172 

172 

172 

172 

172 

172 

Sweden 

153 

151 

150 

149 

149 

149 

149 

149 

149 

149 

149 

In  terms  of  the  Size  of  the  workforce  in  CIs,  similar  assumption  was  made:  COVID-19 
impact of half magnitude of the one following GFC, contained over the period 2020-2023, 
after which workforce level stays constant over the period 2024-2030 (see below). 

Workforce in CIs, 2020-2030 

2020 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Austria 

 71,154    70,830    70,508    70,187    70,187    70,187    70,187    70,187    70,187    70,187    70,187  

Belgium 

 50,106    49,878    49,651    49,425    49,425    49,425    49,425    49,425    49,425    49,425    49,425  

Bulgaria 

 28,079    27,921    27,764    27,607    27,607    27,607    27,607    27,607    27,607    27,607    27,607  

Croatia 

 19,453    19,343    19,234    19,126    19,126    19,126    19,126    19,126    19,126    19,126    19,126  

Cyprus 

 8,498  

 8,442  

 8,387  

 8,332  

 8,332  

 8,332  

 8,332  

 8,332  

 8,332  

 8,332  

 8,332  

Czechia 

 39,514    39,292    39,070    38,850    38,850    38,850    38,850    38,850    38,850    38,850    38,850  

Denmark 

 40,790    40,159    39,537    38,925    38,925    38,925    38,925    38,925    38,925    38,925    38,925  

Estonia 

 5,303  

 5,183  

 5,066  

 4,951  

 4,951  

 4,951  

 4,951  

 4,951  

 4,951  

 4,951  

 4,951  

Finland 

 20,598    20,279    19,965    19,656    19,656    19,656    19,656    19,656    19,656    19,656    19,656  

187 

 
 
 
France 

 397,557   395,749   393,948   392,156   392,156   392,156   392,156   392,156   392,156   392,156   392,156  

Germany 

 575,964   573,344   570,736   568,139   568,139   568,139   568,139   568,139   568,139   568,139   568,139  

Greece 

 36,487    36,248    36,011    35,775    35,775    35,775    35,775    35,775    35,775    35,775    35,775  

Hungary 

 39,436    39,214    38,993    38,773    38,773    38,773    38,773    38,773    38,773    38,773    38,773  

Ireland 

 27,692    27,566    27,441    27,316    27,316    27,316    27,316    27,316    27,316    27,316    27,316  

Italy 

 278,944   277,119   275,306   273,505   273,505   273,505   273,505   273,505   273,505   273,505   273,505  

Latvia 

 6,759  

 6,606  

 6,457  

 6,311  

 6,311  

 6,311  

 6,311  

 6,311  

 6,311  

 6,311  

 6,311  

Lithuania 

 10,101    9,873  

 9,650  

 9,432  

 9,432  

 9,432  

 9,432  

 9,432  

 9,432  

 9,432  

 9,432  

Luxembour
g 

 26,214    26,095    25,976    25,858    25,858    25,858    25,858    25,858    25,858    25,858    25,858  

Malta 

 5,141  

 5,108  

 5,074  

 5,041  

 5,041  

 5,041  

 5,041  

 5,041  

 5,041  

 5,041  

 5,041  

Netherland
s 

 69,682    69,365    69,049    68,735    68,735    68,735    68,735    68,735    68,735    68,735    68,735  

Poland 

 159,972   159,071   158,175   157,284   157,284   157,284   157,284   157,284   157,284   157,284   157,284  

Portugal 

 50,726    50,394    50,064    49,737    49,737    49,737    49,737    49,737    49,737    49,737    49,737  

Romania 

 52,807    52,509    52,214    51,920    51,920    51,920    51,920    51,920    51,920    51,920    51,920  

Slovakia 

 19,284    19,175    19,067    18,960    18,960    18,960    18,960    18,960    18,960    18,960    18,960  

Slovenia 

 9,499  

 9,446  

 9,392  

 9,340  

 9,340  

 9,340  

 9,340  

 9,340  

 9,340  

 9,340  

 9,340  

Spain 

 172,312   171,185   170,065   168,952   168,952   168,952   168,952   168,952   168,952   168,952   168,952  

Sweden 

 43,810    43,132    42,464    41,806    41,806    41,806    41,806    41,806    41,806    41,806    41,806  

For  the  variable  average  daily  wage  for  the  employees  in  CIs,  the  Eurostat  data  on  the 
average wage of the financial sector employee was used as starting point for the year 2020, 
and  then  kept  constant  for  the  period  2020-2030  across  all  Member  States  (see  below 
table), consistent with a simplified approach to assumptions taken in the supporting study. 

Average daily wage for the financial sector employee, in EUR 

2020 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Austria 

156 

156 

156 

156 

156 

156 

156 

156 

156 

156 

156 

Belgium 

176 

176 

176 

176 

176 

176 

176 

176 

176 

176 

176 

Bulgaria 

Croatia 

22 

58 

22 

58 

22 

58 

22 

58 

22 

58 

22 

58 

22 

58 

22 

58 

22 

58 

22 

58 

22 

58 

Cyprus 

117 

117 

117 

117 

117 

117 

117 

117 

117 

117 

117 

Czechia 

51 

51 

51 

51 

51 

51 

51 

51 

51 

51 

51 

Denmark 

258 

258 

258 

258 

258 

258 

258 

258 

258 

258 

258 

188 

 
 
 
Estonia 

63 

63 

63 

63 

63 

63 

63 

63 

63 

63 

63 

Finland 

180 

180 

180 

180 

180 

180 

180 

180 

180 

180 

180 

France 

170 

170 

170 

170 

170 

170 

170 

170 

170 

170 

170 

Germany 

155 

155 

155 

155 

155 

155 

155 

155 

155 

155 

155 

Greece 

Hungary 

83 

53 

83 

53 

83 

53 

83 

53 

83 

53 

83 

53 

83 

53 

83 

53 

83 

53 

83 

53 

83 

53 

Ireland 

217 

217 

217 

217 

217 

217 

217 

217 

217 

217 

217 

Italy 

129 

129 

129 

129 

129 

129 

129 

129 

129 

129 

129 

Latvia 

52 

Lithuania  40 

52 

40 

52 

40 

52 

40 

52 

40 

52 

40 

52 

40 

52 

40 

52 

40 

52 

40 

52 

40 

Luxembour
g 

228 

228 

228 

228 

228 

228 

228 

228 

228 

228 

228 

Malta 

92 

92 

92 

92 

92 

92 

92 

92 

92 

92 

92 

Netherlands 157 

157 

157 

157 

157 

157 

157 

157 

157 

157 

157 

Poland 

Portugal 

57 

78 

Romania 

32 

Slovakia 

Slovenia 

52 

82 

57 

78 

32 

52 

82 

57 

78 

32 

52 

82 

57 

78 

32 

52 

82 

57 

78 

32 

52 

82 

57 

78 

32 

52 

82 

57 

78 

32 

52 

82 

57 

78 

32 

52 

82 

57 

78 

32 

52 

82 

57 

78 

32 

52 

82 

57 

78 

32 

52 

82 

Spain 

101 

101 

101 

101 

101 

101 

101 

101 

101 

101 

101 

Sweden 

196 

196 

196 

196 

196 

196 

196 

196 

196 

196 

196 

Finally,  for  the  variable  number  of  consumer  requests  per  loan,  the  assumed  values  also 
take  into  account  the  impact  of  COVID-19  e.g.  fall  in  credit  demand  following  the 
recessionary shock, higher reliance on discretionary savings and consumption smoothing. 
More  specifically,  in  line  with  the  estimates  of  the  McKinsey  Report  on  the  impact  of 
COVID-19 on consumer finance in 2020, the reduction of number of requests by 22% in 
2020  followed  by  recovery  to  pre-COVID-19  level  from  2021  onwards  is  assumed  (see 
below table).  

Number of requests for loans, 2020-2030 

2020 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

Austria 

Belgium 

1,648,26
3  

2,113,15
8  

2,113,15
8  

2,113,15
8  

2,113,15
8  

2,113,15
8  

2,113,15
8  

2,113,15
8  

2,113,15
8  

2,113,15
8  

2,113,15
8  

1,773,75

2,274,04

2,274,04

2,274,04

2,274,04

2,274,04

2,274,04

2,274,04

2,274,04

2,274,04

2,274,04

189 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6  

6  

6  

6  

6  

6  

6  

6  

6  

6  

6  

Bulgaria 

1,628,13
6  

2,087,35
4  

2,087,35
4  

2,087,35
4  

2,087,35
4  

2,087,35
4  

2,087,35
4  

2,087,35
4  

2,087,35
4  

2,087,35
4  

2,087,35
4  

Croatia 

 455,111   455,111   455,111   455,111   455,111   455,111   455,111   455,111   455,111   455,111  

354986,
6  

Cyprus 

Czechia 

Denmark 

270630,
6  

346962,
3  

346962,
3  

346962,
3  

346962,
3  

346962,
3  

346962,
3  

346962,
3  

346962,
3  

346962,
3  

346962,
3  

2,121,76
1  

2,720,20
7  

2,720,20
7  

2,720,20
7  

2,720,20
7  

2,720,20
7  

2,720,20
7  

2,720,20
7  

2,720,20
7  

2,720,20
7  

2,720,20
7  

2,373,36
6  

3,042,77
7  

3,042,77
7  

3,042,77
7  

3,042,77
7  

3,042,77
7  

3,042,77
7  

3,042,77
7  

3,042,77
7  

3,042,77
7  

3,042,77
7  

Estonia 

 264,735   264,735   264,735   264,735   264,735   264,735   264,735   264,735   264,735   264,735  

206493,
3  

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

1,648,29
5  

2,113,19
9  

2,113,19
9  

2,113,19
9  

2,113,19
9  

2,113,19
9  

2,113,19
9  

2,113,19
9  

2,113,19
9  

2,113,19
9  

2,113,19
9  

14,072,7
19  

18,041,9
48  

18,041,9
48  

18,041,9
48  

18,041,9
48  

18,041,9
48  

18,041,9
48  

18,041,9
48  

18,041,9
48  

18,041,9
48  

18,041,9
48  

11,975,8
18  

15,353,6
13  

15,353,6
13  

15,353,6
13  

15,353,6
13  

15,353,6
13  

15,353,6
13  

15,353,6
13  

15,353,6
13  

15,353,6
13  

15,353,6
13  

1,084,47
7  

1,390,35
5  

1,390,35
5  

1,390,35
5  

1,390,35
5  

1,390,35
5  

1,390,35
5  

1,390,35
5  

1,390,35
5  

1,390,35
5  

1,390,35
5  

1,263,80
0  

1,620,25
7  

1,620,25
7  

1,620,25
7  

1,620,25
7  

1,620,25
7  

1,620,25
7  

1,620,25
7  

1,620,25
7  

1,620,25
7  

1,620,25
7  

1,264,03
7  

1,620,56
1  

1,620,56
1  

1,620,56
1  

1,620,56
1  

1,620,56
1  

1,620,56
1  

1,620,56
1  

1,620,56
1  

1,620,56
1  

1,620,56
1  

4,390,71
8  

5,629,12
5  

5,629,12
5  

5,629,12
5  

5,629,12
5  

5,629,12
5  

5,629,12
5  

5,629,12
5  

5,629,12
5  

5,629,12
5  

5,629,12
5  

190 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
220080,
4  

282154,
4  

282154,
4  

282154,
4  

282154,
4  

282154,
4  

282154,
4  

282154,
4  

282154,
4  

282154,
4  

282154,
4  

Lithuania 

201422,
7  

258234,
2  

258234,
2  

258234,
2  

258234,
2  

258234,
2  

258234,
2  

258234,
2  

258234,
2  

258234,
2  

258234,
2  

Luxembourg  

153996,
4  

197431,
3  

197431,
3  

197431,
3  

197431,
3  

197431,
3  

197431,
3  

197431,
3  

197431,
3  

197431,
3  

197431,
3  

Malta 

68733,3
2  

88119,6
4  

88119,6
4  

88119,6
4  

88119,6
4  

88119,6
4  

88119,6
4  

88119,6
4  

88119,6
4  

88119,6
4  

88119,6
4  

Netherlands   

2,441,93
9  

3,130,69
1  

3,130,69
1  

3,130,69
1  

3,130,69
1  

3,130,69
1  

3,130,69
1  

3,130,69
1  

3,130,69
1  

3,130,69
1  

3,130,69
1  

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

5,992,40
6  

7,682,57
2  

7,682,57
2  

7,682,57
2  

7,682,57
2  

7,682,57
2  

7,682,57
2  

7,682,57
2  

7,682,57
2  

7,682,57
2  

7,682,57
2  

1,190,18
5  

1,525,87
8  

1,525,87
8  

1,525,87
8  

1,525,87
8  

1,525,87
8  

1,525,87
8  

1,525,87
8  

1,525,87
8  

1,525,87
8  

1,525,87
8  

2,782,36
6  

3,567,13
6  

3,567,13
6  

3,567,13
6  

3,567,13
6  

3,567,13
6  

3,567,13
6  

3,567,13
6  

3,567,13
6  

3,567,13
6  

3,567,13
6  

855349,
4  

1,096,60
2  

1,096,60
2  

1,096,60
2  

1,096,60
2  

1,096,60
2  

1,096,60
2  

1,096,60
2  

1,096,60
2  

1,096,60
2  

1,096,60
2  

178319,
5  

228614,
7  

228614,
7  

228614,
7  

228614,
7  

228614,
7  

228614,
7  

228614,
7  

228614,
7  

228614,
7  

228614,
7  

5,359,65
2  

6,871,34
9  

6,871,34
9  

6,871,34
9  

6,871,34
9  

6,871,34
9  

6,871,34
9  

6,871,34
9  

6,871,34
9  

6,871,34
9  

6,871,34
9  

3,555,43
5  

4,558,25
0  

4,558,25
0  

4,558,25
0  

4,558,25
0  

4,558,25
0  

4,558,25
0  

4,558,25
0  

4,558,25
0  

4,558,25
0  

4,558,25
0  

Final costs for public administration and financial providers 

The  tables  below  summarise  the  recurring  costs  related  to  CCD  for  public 
administration and financial providers over the baseline period. 

Summary recurring costs for Public Administration 2020-2030  

191 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030  NPV(@4%) 

 49,677   49,677   49,677   49,677   49,677   49,677   49,677   49,677   49,677   49,677   369,366  

RCPA.1  Monitoring 
compliance 

RCPA.2  Reporting  to 
EU 

 6,900    6,900    6,900    6,900    6,900    6,900    6,900    6,900    6,900    6,900    51,301  

RCPA.3  Enforcemen

 99,354   99,354   99,354   99,354   99,354   99,354   99,354   99,354   99,354   99,354   738,731  

t  costs  e.g. 
sweeps, 
investigatio
ns 

RCPA.4  Maintaining 

 49,677   49,677   49,677   49,677   49,677   49,677   49,677   49,677   49,677   49,677   369,366  

database 

Grand total   

 1,528,764  

205,608  

205,608  

205,608  

205,608  

205,608  

205,608  

205,608  

205,608  

205,608  

205,608  

Summary recurring costs related to the CCD, for Financial providers, 2020-2030  

2020  2021  2022  2023  2024  2025  2026  2027  2028  2029  2030  NPV(@4%) 

RCI.1 Additional  cost  of 
advertisements 
to 
comply 
these  new 
requirements  

14,830
,989  

RCI.2 Additional  costs  of 
staff  to  provide  Pre-
contractual 
information/SECCI 

73,705
,943  

RCI.3 Additional  cost  of 
carrying  out  credit 
worthiness 
assessment 

84,074
,625  

14,635
,108  

14,442
,955  

14,442
,955  

14,442
,955  

14,442
,955  

14,442
,955  

14,442
,955  

14,442
,955  

14,442
,955  

108,48
2,876  

73,705
,943  

73,705
,943  

73,705
,943  

73,705
,943  

73,705
,943  

73,705
,943  

73,705
,943  

73,705
,943  

73,705
,943  

532,43
6,487  

84,074
,625  

84,074
,625  

84,074
,625  

84,074
,625  

84,074
,625  

84,074
,625  

84,074
,625  

84,074
,625  

84,074
,625  

607,33
7,699  

 14,830,989  

 73,705,943  

 84,074,625  

Grand total 

13809
9538 

17261
1557 

17241
5676 

17222
3523 

17222
3523 

17222
3523 

17222
3523 

17222
3523 

1,72E
+08 

17222
3523 

17222
3523 

1,248,257,063 

Costs and benefits of selected measures, assessment against the baseline 

Costs stemming from over 40 different measures were assessed for the impact assessment 
supporting study, albeit to different degree of detail. Out of the measures considered, more 
detailed costs estimation for EU and national administration, and the industry was provided 
for a number of specific measures (see ‘Results of the quantification of certain measures’).  

Due to, inter alia, lack of data, large number of measures and their heterogeneity, it was not 
feasible  to  derive  the  quantification  of  the  benefits  for  all  the  assessed  ones.  Instead,  a 

192 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
qualitative assessment for a number of specific measures (the same ones for which detailed 
costs estimates were provided) was conducted. 

More specifically, in the context of quantification of benefits for each of the measures, the 
following pre-assessment was conducted: 

-  Overview of issues faced by consumers; 
-  Type of potential benefits brought by an option. 

Based on this pre-assessment, each of the measures was assigned the strength in terms of 
incremental  increase  of  the  CCD’s  effectiveness,  should  it  be  implemented.  Note  that 
under the baseline scenario for the period 2021-2030, the overall CCD effectiveness  was 
assumed at 15%. Here, it is assumed that an introduction of each of the following measures 
would  increase  the  overall  effectiveness  of  the  CCD  to  the  degree  outlined  in  the  below 
table. 
Effectiveness of each measures – assumed strength/ contribution to the CCD, in percentage points 

Measure 

Assumed increase in 
CCD effectiveness 
attributed to the 
option (only) 

Revised CCD 
effectiveness 
(total) 

2.1 

2.2 

Remove 
thresholds 

the  minimum  and  maximum 

Include some of the currently excluded loans 
within its scope of application  

4% 

11% 

19% 

26% 

2.3/2.7 

2.4 

2.5 

3a.15 

terms  which  affect 

Provide  a  more  detailed  definition  of  some 
key 
its  scope  of 
application  e.g.  ‘credit  provider’,  ‘credit 
intermediary’ and more detailed definition of 
some  key  terms  related  to  the  obligations 
contained  in  the  Directive  e.g.  ‘sufficient 
timely  manner’, 
a 
information’, 
‘prominently’, ‘adequate explanations’ 

‘in 

Reduce  the  amount  of  information  to  be 
in  advertising 
provided 
focusing on key information, especially when 
provided through certain channels (radio) 

to  consumers 

Present  key  pre-contractual  information  in  a 
more  prominent  way  (without  reducing  the 
amount 
to 
information 
consumers at pre-contractual stage) 

provided 

of 

to 

request  and 

Include  a  provision  establishing  the  right  of 
consumers 
receive  an 
explanation  on  how  and  on  what  basis  a 
decision  on 
their  creditworthiness  was 
reached 

193 

3.5% 

18.5% 

2% 

17% 

1% 

16% 

2% 

17% 

 
 
 
3a.17 

3a.7 

3a.9 

3b.6 

3b.9 

Establish an obligation on the Commission to 
regularly  assess  the  financial  education  / 
digital  literacy  initiatives  implemented  in 
Member  States  and  identify  best  practices, 
and to publish the findings 

Establish an obligation upon credit providers 
inform  consumers  whether  advisory 
to 
services are or can be provided 

Prohibit product-tying practices 

Prohibit unsolicited sale of credit  

Establish  an  obligation  upon  creditors  to 
inform  low-scoring  consumers  whether  debt 
advice  services  are  available  (provided  that 
these  services  do  not  influence  the  credit 
ranking of the consumer) 

0.5% 

15.5% 

0.3% 

2% 

3.5% 

15.3% 

17.0% 

18.5% 

2% 

17% 

194 

 
 
 
 
 
Results of the quantification of certain measures 

Cost assessment of specific policy measures 

The specific measures for which there was enough quantitative evidence to determine their 
impact with regard to the baseline have been subject to a quantitative analysis of their costs 
and benefits. In total, the following measures have been subject to this analysis: 

  Removing  the  minimum  and  maximum  thresholds  (Measure  2.1),  included  in 

 

Policy options 2, 3a and 3b. 
Including  some  of  the  currently  excluded  loans  within  its  scope  of  application 
(Measure 2.2), included in Policy options 2, 3a and 3b. 

  Amending  the  definition  of  some  key  terms  which  affect  its  scope  of  application 
(Measure  2.3),  included  in  Policy  options  2,  3a  and  3b,  and  provide  a  more  detailed 
definition  of  some  key  terms  related  to  obligations  contained  in  the  Directive 
(Measure 2.7), included in Policy option 2. Measure 2.3 and 2.7 are assessed together. 
  Reduce  the  amount  of  information  to  be  provided  to  consumers  in  advertising 
focusing  on  key  information,  especially  when  provided  through  certain  channels 
(radio only) (Measure 2.4), included in policy option 2 and 3b. 

  Present  key  pre-contractual  information  in  a  more  prominent  way  (without 
reducing  the  amount  of  information  provided  to  consumers  at  pre-contractual  stage) 
(Measure 2.5), included in policy option 2. 

  Establish an obligation upon credit providers to inform consumers whether advisory 
services are or can be provided (Measure 3a.7), included in Policy options 3a and 3b. 
  Prohibit  product-tying  practices  (Measure  3a.9),  included  in  Policy  option  3a  and 

 

3b. 
Include  a  provision  establishing  the  right  of  consumers  to  request  and  receive  an 
explanation  on  how  and  on  what  basis  a  decision  on  their  creditworthiness  was 
reached (Measure 3a.15), included in Policy options 3a and 3b. 

  Establish  an  obligation  on  the  Commission  to  regularly  assess  the  financial 
education  /  digital  literacy  initiatives  implemented  in  Member  States  and  identify 
best practices, and to publish the findings (Measure 3a.17), included in Policy option 
3a. 

  Prohibit unsolicited sale of credit (Measure 3b.6), included in Policy option 3b. 
  Establish an obligation upon credit providers to inform low-scoring consumers that 
debt advice services are available (Measure 3b.9), included in Policy option 3b. 

The tables below show a summary of the total costs related to Consumer Credit Directive 
(CCD)  implementation  plus  costs  for  each  policy  measure  listed  above  and  the  costs 
differentials of additional policy measures compared to the baseline (Option 0), or in other 
words a cost of implementing a measure irrespective of all other Directive’s related costs. 

Cost  items  considered  are  broken  down  into  two  main  categories:  personnel  cost  and 
investment in infrastructure including IT (see Description of the approach to monetisation 
of cost benefits below).  

195 

 
 
Both tables show the costs for the whole period 2021-2030, in EUR and net present value 
terms, and aggregated for all EU-27 Member States. In addition, the table presents also the 
disaggregation by the main types of costs (personal costs and investment in infrastructure 
including IT) that would have to be incurred by each of the specific stakeholder. 

Overall, for the vast majority of options the bulk of the costs related to a measure would be 
borne by the Industry. Costs for the EU institutions and MS public authorities are in most 
cases negligible and relate to tasks such as the revision of the Directive by the European 
Commission, its transposition into national laws by Member States public authorities and 
incremental  costs  associated  with  increased  monitoring,  reporting  and  enforcement 
activities born by the Member State public authorities.  

By way of example, according to the estimations from the model, the implementation and 
enforcement  of  the  measure  2.2  over  the  period  2021-2030  would  cost  over  EUR  750 
million (costs spread across all EU 27 MSs and all three stakeholders), or around 35% of 
the total costs related to the implementation and enforcement of the whole Directive over 
the same period. Credit institutions would born 99.9% of the costs. However it is important 
to stress that those could eventually be passed on to consumers. Importantly, these figures 
represent  a  minimum  estimate  since  the  model  captures  only  the  costs  related  to  the 
expansion  of  the  scope  of  the  Directive  to  overdraft  facility  product  (rather  than  wider 
range of products), and only for banks. Costs that would be potentially borne by non-bank 
lenders  as  a  result  of  extension  of  the  scope  to  products  such  as  zero-interest  loans  and 
leasing agreements, that are rarely provided by banks, are not considered here, albeit they 
would  not  be  negligible.  And  indeed,  the  same  caveat  applies  to  all  other  measures  and 
their costs estimates (as well as to the benefits calculation). Only costs incurred by  banks 
have been captured by the model. This is an important caveat as for number of options the 
costs borne by non-bank lenders would be high as well.456      

456  For  instance,  the  extension  of  the  Directive’s  scope  to  low  value  loans  below  EUR  200  would  have 
probably higher impact on non-bank lenders who are typically more likely to provide small value loans than 
banks.  

196 

 
 
 
 
 
                                                           
Table 19 Total costs [in EUR, npv] 

Option 0  Measure 

2.1 

Measure 
2.2 

Measures 
2.3 / 2.7 

Measure 
2.4 

Measure 
2.5 

Measure 
3a.7 

Measure 
3a.9 

Measure 
3a.15 

Measure 
3a.17 

Measure 
3b.6 

Measure 
3b.9 

Policy option 

0 

2, 3a, 3b 

2, 3a, 3b 

2, 3a, 3b / 
2 

2, 3b 

2 

3a, 3b 

3a, 3b 

3a, 3b 

3a 

3b 

3b 

EC [DG JUST/ FISMA] 

Investment in 
infrastructure 
including IT 

Personnel cost 

Total 

0 

0 

0 

0 

2,596 

2,596 

0 

0 

0  

0 

0 

30,288 

21,635 

 7,788  

 9,736  

6,750 

30,288 

21,635 

 7,788  

 9,736  

6,750 

0 

7,788 

7,788 

0 

0 

0 

0 

12,981 

1,005,171  21,635 

10,817 

12,981 

1,005,171  21,635 

10,817 

Member States 

Investment in 
infrastructure 
including IT 

496,771 

537,064 

637,795 

617,649 

 496,771  

 496,771   516,917 

537,064 

512,888 

496,771 

557,210 

516,917 

Personnel cost 

1,559,309  1,697,725  2,037,793  1,971,570 

 1,644,561    1,644,561   1,634,488  1,709,666  1,619,452  1,559,309  1,853,488  1,706,868 

Total 

2,056,080  2,234,788  2,675,588  2,589,219 

 2,141,332    2,141,332   2,151,405  2,246,730  2,132,340  2,056,080  2,410,698  2,223,785 

Investment in 
infrastructure 
including IT 

0 

20,316,42
3 

60,167,86
9 

60,949,27
0 

0 

0 

0 

0 

19,535,02
2 

0 

19,535,02
2 

10,158,21
2 

Industry 

Personnel cost 

1,397,437,
812 

1,540,353,
018 

2,088,163,
128 

1,725,575,
192 

1,405,672,
919  

1,406,502,
504  

1,404,170,
159 

1,421,933,
272 

1,469,134,
730 

1,397,437,
812 

1,415,391,
629 

1,528,647,
783 

Total 

1,397,437,
812 

1,560,669,
441 

2,148,330,
997 

1,786,524,
462 

1,405,672,
919  

1,406,502,
504  

1,404,170,
159 

1,421,933,
272 

1,488,669,
753 

1,397,437,
812 

1,434,926,
651 

1,538,805,
994 

197 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Overall Total 

1,399,493,
892 

1,562,725,
521 

2,150,387,
077 

1,789,135,
315 

1,407,822,
039  

1,408,653,
571  

1,406,328,
314 

1,424,187,
791 

1,490,815,
073 

1,400,499,
062 

1,437,358,
984 

1,541,040,
597 

Share of EC [DG 
JUST/ FISMA] 

0,0% 

Share of MS costs  0,1% 

0,0% 

0,1% 

0,0% 

0,1% 

0,0% 

0,1% 

0.0% 

0.2% 

0.0% 

0.2% 

0,0% 

0,2% 

0,0% 

0,2% 

0,0% 

0,1% 

0,1% 

0,1% 

0,0% 

0,2% 

0,0% 

0,1% 

Share of Industry 
costs 

ICF, 2020 

99,9% 

99,9% 

99,9% 

99,9% 

99.8% 

99.8% 

99,8% 

99,8% 

99,9% 

99,8% 

99,8% 

99,9% 

Note 1: Incremental costs of each option vs baseline start in 2021 already [not 2020, given that any changes won't take place this year anymore] 
Note 2: The model does not reflect any costs that would be incurred by non-bank lenders [it captures only CIs with respect to Industry costs]. For some 
measures, those could constitute very substantial share of costs incurred by the industry. 

Table 20 Increase in costs cf Baseline [in EUR, npv] 

Measure 2.1  Measure 2.2  Measures 

Measure 2.4  Measure 2.5  Measure 

Policy 
option(s) 

2, 3a, 3b 

2, 3a, 3b 

2, 3a, 3b / 2  2, 3b 

2.3 / 2.7 

0 

Investment in 
infrastructure 
including IT 

0 

0 

0  

2 

0 

from Option 0 to: 

Measure 
3a.9 

Measure 
3a.15 

Measure 
3a.17 

Measure 
3b.6 

Measure 
3b.9 

3a, 3b 

3a, 3b 

3a 

3b 

3b 

3a.7 

3a, 3b 

EC [DG JUST/ FISMA] 

0 

0 

0 

0 

0 

0 

Personnel cost  2,596 

Total 

2,596 

30,288 

30,288 

21,635 

21,635 

 7,788  

 7,788  

 9,736  

 9,736  

6,750 

6,750 

7,788 

7,788 

12,981 

12,981 

1,005,171 

21,635 

1,005,171 

21,635 

10,817 

10,817 

198 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
40,293 

141,024 

120,878 

0  

0 

20,146 

40,293 

16,117 

Member States 

Investment in 
infrastructure 
including IT 

Personnel cost  138,416 

478,484 

412,261 

 85,252  

 85,252  

75,179 

150,357 

60,143 

Total 

178,708 

619,508 

533,139 

 85,252  

 85,252  

95,325 

190,650 

76,260 

Industry 

0 

0 

0 

60,439 

20,146 

294,179 

147,559 

354,618 

167,705 

20,316,423 

60,167,869 

60,949,270 

0  

0 

0 

0 

19,535,022 

0 

19,535,022 

10,158,212 

Investment in 
infrastructure 
including IT 

Personnel cost  142,915,207  690,725,317  328,137,380 

 8,235,107  

 9,064,692  

6,732,347 

24,495,461 

71,696,919 

Total 

163,231,630  750,893,186  389,086,650 

 8,235,107  

 9,064,692  

6,732,347 

24,495,461 

91,231,941 

0 

0 

17,953,817 

131,209,971 

37,488,840 

141,368,183 

Overall Total  163,412,934  751,542,982  389,641,424 

 8,328,147  

 9,159,679  

6,834,422 

24,693,899 

91,321,182 

1,005,171 

37,865,092 

141,546,706 

0,0% 

0,0% 

0,0% 

0.1% 

0.1% 

0,1% 

0,0% 

0,0% 

100,0% 

0,1% 

0,0% 

0,1% 

0,1% 

0,1% 

1.0% 

0.9% 

1,4% 

0,8% 

0,1% 

0,0% 

0,9% 

0,1% 

99,9% 

99,9% 

99,9% 

98.9% 

99.0% 

98,5% 

99,2% 

99,9% 

0,0% 

99,0% 

99,9% 

11,7% 

35% 

21,8% 

0.6% 

0.7% 

0,5% 

1,7% 

6,1% 

0,1% 

2,6% 

9,2% 

Share of EC 
[DG JUST/ 
FISMA] 

Share of MS 
costs 

Share of 
Industry costs 

All costs as % 
increase cf 
baseline 

ICF calculations, 2020 

199 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assessment of the benefits of specific measures 

Table below illustrates the quantification of benefits brought by each measure in the form 
of reduction in consumers’ financial detriment457 and reduction in monetised time losses 
that  would  have  otherwise  occurred  had  a  given  option  not  been  implemented.  Figures 
are  presented  in  EUR  and  net  present  value  terms,  for  all  EU  27  MSs,  and  the  period 
2021-2030.  Note  that  similarly  to  the  estimation  of  specific  costs,  the  model  does  not 
capture  the  consumer  benefits  that  could  be  generated  as  a  result  of  a  given  measure 
implemented  by  non-bank  lenders.  Those  could  be  very  significant  for  some  specific 
measures (e.g. scope extension). 

The  magnitude  of  increased  CCD  effectiveness  associated  to  each  measure  was  an 
informed judgment made by the study team based on the desk research, legal analysis, 
consultation exercises conducted for the impact assessment supporting study,458  as well 
as on the results of the tasks performed for the Directive’s Evaluation.    

Overall, measure 2.2 would generate relatively highest benefits. This is also the function 
of  its  scope  (overdraft  facilities  are  one  of  the  most  prevalent  financial  products)  and 
consumer detriment that partial exclusion of the overdraft facility from the Directive has 
caused.  In  this  case  though,  the  benefits  are  also  proportionate  to  high  costs  that  this 
option  would  imply.  Likewise,  measure  2.1  would  be  also  likely  to  generate  high 
benefits.  Measure  2.3/2.7  would  have  a  very  positive  impact,  due  to  the  higher  legal 
clarity  of  the  text  from  amending  the  definitions  of  key  terms  and  also  due  to  the 
expected decrease in consumer detriment - as it would create a more certain framework 
for  the  application  of  consumers  rights  and  facilitate  law  enforcement.  Measure  3b.6 
stood  out  in  terms  of  the  scale  of  potential  benefits:  it  would  not  be  very  costly  for 
industry  but  it  would  be  particularly  beneficial  for  consumers,  who  would  not  end  up 
with  unsuitable  pre-approved  credit  products  or  with  a  unilateral  increase  in  the  upper 
limit of their credit line, which might  lead to  overspending.  Measure 3b.9 has  a slight 
negative net benefit, but a positive impact in terms of reduction of consumer detriment, 
because  the  early  detection  mechanism  is  considered  to  be  a  very  effective  tool  to 
redirect  consumers  to  debt  advice  services  and  avoid  the  detriment  stemming  from  the 
worsening of financial difficulties. 

457 See also Annex 9: Detailed description of the approach to the assessment of costs and benefits 
458 See supporting study Annex 10: Results of the quantification of measures. 

200 

 
 
 
                                                           
Table 21 Reduction in consumers’ financial detriment and monetised time losses thanks to a given measure, in EUR and net present value terms, for EU 27 
MSs, and time period 2021-2030. 

Measure - 
number 

Revised CCD 
effectiveness 
(total) 

Assumed 
increase in 
CCD 
effectiveness 
attributed to 
the measures 
(only) 

Baseline 

Total 
reduction in 
consumers' 
financial 
detriment 
[EUR mln] 

After implementation 

Total 
reduction in 
consumers' 
time losses 
[EUR mln] 

Total 
reduction in 
consumers' 
financial 
detriment 
[EUR mln] 

Total 
reduction in 
consumers' 
time losses 
[EUR mln] 

Incremental 
reduction in 
consumers' 
financial 
detriment 
[EUR mln] 

Incremental 
reduction in 
consumers' 
time losses 
[EUR mln] 

2.1 

2.2 

2.3/2.7 

2.4 

2.5 

3a.15 

3a.17 

3a.7 

3a.9 

3b.6 

4% 

11% 

3.5% 

2.0% 

1.0% 

2.0% 

0.5% 

0.3% 

2.0% 

2.5% 

3b.9 
2.0% 
ICF calculations, 2020 

19% 

26% 

18.5% 

17.0% 

16.0% 

17.0% 

15.5% 

15.3% 

17.0% 

17.5% 

17.0% 

436.88 

436.88 

436.88 

436.88 

436.88 

436.88 

436.88 

436.88 

436.88 

436.88 

436.88 

598.81 

598.81 

598.81 

598.81 

598.81 

598.81 

598.81 

598.81 

598.81 

598.81 

598.81 

553.38 

757.26 

538.82 

495.13 

466.00 

495.13 

451.44 

445.62 

495.13 

509.69 

495.13 

201 

758.50 

1037.94 

738.54 

678.65 

638.73 

678.65 

618.77 

610.79 

678.65 

698.61 

678.65 

116.50 

320.38 

101.94 

58.25 

29.13 

58.25 

14.56 

8.74 

58.25 

72.81 

58.25 

159.68 

439.13 

139.72 

79.84 

39.92 

79.84 

19.96 

11.98 

79.84 

99.80 

79.84 

Total 
incremental 
reduction in 
consumers' 
financial 
detriment 
AND time 
losses [EUR 
mln] 

276.18 

759.51 

241.66 

138.09 

69.05 

138.09 

34.52 

20.71 

138.09 

172.62 

138.09 

 
 
 
 
 
 
 
 
Quantification of some costs and benefits for specific policy measures 

Overall, the comparison of costs and benefits points out to that for most of the measures 
benefits  would offset  the costs (see positive net  benefits  in  the last column of the table 
below). On the other hand, the potential net benefits for measures 2.3/2.7 and 3b.9 would 
be negative, though to a different degree.  

However,  these  estimations  should  be  considered  with  considerable  caution  given  a 
number  of  underlying  limitations  such  as  absence  of  non-bank  lenders  and  their 
consumers  in  the  estimates  produced  by  the  model,  non-exhaustive  typology  of  costs 
applied  for  the  costs  estimation  (e.g.  non-exhaustive  listing  of  specific  costs  but  also 
some  potential  revenue  job/losses  as  a  result  of  an  option),  non-exhaustive  typology  of 
benefits  (e.g.  reduction  in  consumer  prices  of  some  products)  and  number  of  tentative 
assumptions  applied  for  the  definition  of  baseline  scenario  and  impact  of  specific 
measures.  Rather  than  analysing  the  values  in  isolation,  it  is  advisable  to  consider 
their rough magnitude in terms of absolute costs and benefits and in relation to each 
other. 

Table 22 Comparison  of costs and benefits for selected measures, in EUR mln and net present 
terms, for EU 27 MSs and period 2021-30 

Option   Description 
2.1 
2.2 

Remove the minimum and maximum thresholds 
Include some of the currently excluded loans within its scope 
of application (some products currently exempted do not need 
to be included) 

2.3/2.7  Detailed definitions and key terms 

Include a provision establishing the right of consumers to 
request and receive an explanation on how and on what basis a 
decision on their creditworthiness was reached 
Establish an obligation on the Commission to regularly assess 
the financial education / digital literacy initiatives implemented 
in Member States and identify best practices, and to publish the 
findings 
Establish an obligation upon credit providers to inform 
consumers whether advisory services are or can be provided 
Prohibit product-tying practices 
Prohibit unsolicited sale of credit  
Establish an obligation upon creditors to inform low-scoring 
consumers whether debt advice services are available  

3a.15 

3a.17 

3a.7 

3a.9 
3b.6 
3b.9 

2.4 

Costs  Benefits459  Net 
146.36  276.18 
751.52  759.51 

129.82 
7.99 

389.64  241.66 

-147.98 

91.32  138.09 

46.77 

1.00 

34.52 

33.52 

6.83 

20.71 

13.88 

24.69  138.09 
37.86  172.62 
141.54  138.09 

113.40 
134.76 
-3.45 

Reduce the amount of information to be provided to consumers 
in advertising focusing on key information, especially when 
provided through certain channels (e.g. radio) 

8.328  138.09 

129.76 

459  Some  of  the  measures  have  the  same  value  for  benefits  because  the  benefit  of  each  measure  was 
calculated based on the assumed increase in the Directive’s effectiveness in reducing consumers’ financial 
detriment and monetised time losses attributed to the measure. In some cases, the assumed increase is the 
same for different measures. 

202 

 
 
                                                           
2.5 

Present key pre-contractual information in a more prominent 
way (without reducing the amount of information provided to 
consumers at pre-contractual stage) 

9.159  69.05 

59.89 

203 

 
 
 
 
 
 
Annex 10: References and documentation reviewed  

Author 

Published  Title 

Abdul Abiad, Giovanni 
Dell'Ariccia, and Bin Li 

2011 

What Have We Learned about Creditless 
Recoveries? 

Accenture 

June 2019 

Finnish Retail lending Market study 

Altman Morris 

2013 

Anderloni L, Vandoni D  

2010 

Article 29 Working Party 
(Art. 29 WP) 

2017 

What Behavioural Economics Has to Say about 
Financial Literacy 

The Profitability of the consumer Credit industry: 
Evidence from Europe  

Guidelines on Data Protection Impact Assessment 
(DPIA) and determining whether processing is 
“likely to result in a high risk” for the purposes of 
Regulation 2016/679 

Article 29 Working Party 
(Art. 29 WP) 

2018 

Guidelines on Automated individual decision-making 
and Profiling for the purposes of Regulation 
2016/679 

Article 29 Working Party 
(Art. 29 WP) 

2018 

Guidelines on transparency under Regulation 
2016/679 

Association of Consumer 
Credit Information 
Suppliers (ACCIS) 

Association of Consumer 
Credit Information 
Suppliers (ACCIS) 

Association of Consumer 
Credit Information 
Suppliers (ACCIS) 

Association of Consumer 
Credit Information 
Suppliers (ACCIS) 

2017 

Survey of Members. Analysis of Credit Reporting in 
Europe 

2018 

Principles on Creditworthiness Assessments  

2018 

Survey of Members. Analysis of Credit Reporting in 
Europe  

2018 

Draft new Spanish Data Protection Law  

Association of Consumer 
Credit Information 
Suppliers (ACCIS) 

- 

Association of European 
Radios (AER)  

2018 

Association of Sparda-
Banks 

2018 

Attaité, Monika 

2015 

Authority for the Financial 
Markets [NL] (AFM) 

2016 

Facts and Figures, available at: https://accis.eu/facts-
and-figures/ 

Feedback from the Association of European Radios 
(BE) on the European Commission's Evaluation 
Roadmap of the Consumer Credit Directive 

Feedback from the Association of Sparda-Banks on 
the European Commission's Evaluation Roadmap of 
the Consumer Credit Directive 

Pay-day lenders: why can we consider them as being 
bad players on the credit market? 

Caution! Borrowing money costs money: A study of 
the effectiveness of a warning in credit 
advertisements 

Authority for the Financial  2016 

Applying behavioural insights to promote better 

204 

 
 
Author 
Markets [NL] (AFM) 

Published  Title 

Autorité de régulation 
professionnelle de la 
publicité (ARPP) 

2018 

Balluguera Gómez, C. 

2016 

Banque de France 

2020 

BBVA research 

BE - Financial Law 
Institute (FLI) 

BE - Financial Services 
and Markets Authority 
(FSMA) 

2017 

2019 

2017 

Behavioural Insights Team  2019 

credit decisions. Impact of the choice architecture on 
decision-making 

Feedback from the Autorité de régulation 
professionnelle de la publicité (ARPP) (FR) on the 
European Commission's Evaluation Roadmap of the 
Consumer Credit Directive  

Los intereses en el crédito al consumo tienen un 
límite máximo 

Le Surendettement des Ménages, Enquête 
Typologique 2019 

Transition to IFRS 9 – Impact on forbearance 
practices: are there some risks? 

Does credit intermediation facilitate the European 
internal market for mortgage credit? 

Study of payment protection insurance offered in 
conjunction with consumer loans 

Best practice guide – Improving consumer 
understanding of contractual terms and privacy 
policies: evidence-based actions for businesses 

BIS 

2018 

Les marchés du crédit fintech à travers le monde: 
taille, moteurs et enjeux de politique publique 

Busch, C. and Mak, V. 

2016 

'Peer-to-peer lending in the European Union' 

Cambridge Centre for 
Alternative Finance 

Caritas Europe 

2020 

2019 

The Global Alternative Finance Market 
Benchmarking Report 

The EU must prevent over-indebtedness - The review 
of the Consumer Credit Directive 

Carter, S.P., Skiba, P.M 

2012-2013 

Pawnshops, Behavioural Economics and Self-
Regulation 

Centre for European Policy 
Studies (CEPS)  

2016 

Two Dimensions of Combating Over-Indebtedness 
Consumer protection and financial stability 

Centre for European Policy 
Studies (CEPS) 

2017 

The future of retail financial services: What policy 
mix for a balanced digital transformation? 

Centre for European Policy 
Studies (CEPS) and 
European Credit Research 
Institute (ECRI) 

CGAP (The Consultative 
Group to Assist the Poor) 

2015 

Towards A Balanced Contribution of Household 
Credit to the Economy 

2017 

Crowdfunding and Financial Inclusion 

Civic Consulting 

2013 

The Over-Indebtedness of European Households: 
Updated Mapping of The Situation, Nature and 
Causes, Effects and Initiatives for Alleviating Its 
Impact 

Civic Consulting (for the 
European Commission) 

2017a 

Study on Measuring Consumer Detriment in the 
European Union 

205 

 
 
Author 

Published  Title 

Civic Consulting (for the 
European Commission) 

Civic Consulting (for the 
European Commission) 

Civic Consulting of the 
Consumer Policy 
Evaluation Consortium 
(CPEC)  

Competition & Markets 
Authority (CMA) 

2017b 

2017c 

2008 

Study for the Fitness Check of EU Consumer and 
Marketing Law 

Operational guidance document on measuring 
personal consumer detriment 

Analysis of the Economic Impact of Directive 
2002/65/EC 

2015 

Payday lending market investigation. Final Report 

Council of the European 
Union 

1986 

Council of the European 
Union 

Crédit Agricole Consumer 
Finance 

Crédit Agricole Consumer 
Finance 

2011 

2015 

Council Directive of 22 December 1986 for the 
approximation of the laws, regulations and 
administrative provisions of the Member States 
concerning consumer credit 

Directive on unfair terms in consumer contracts - 
Council Directive 93/13/EEC 

Overview of the Consumer Credit Market in Europe 
in 2015 

2018 

Consumer credit in Europe in 2017  

CrowdfundingHub 

2016 

Danish Government 

2020 

Daxhammer, Rolf J and 
Hagenbuch, Raphael 

2016 

Current State of Crowdfunding in Europe – An 
overview of the Crowdfunding Industry in more than 
25 Countries: Trends, Volumes & Regulations 

Response by the Danish government to the roadmap 
for the review of the Consumer Credit Directive 
(2008/48EC) 

Financial Nudging – Verhaltenswissenschaftliche 
Ansätze für bessere Finanzentscheidungen, ESB 
Business School, Reutlingen University 

Deloitte 

2019 

The future of credit: a European perspective 

DE - Bundesanstalt für  
Finanzdienstleistungsaufsic
ht (BaFin) 

2017 

Ergebnisbericht zur Marktuntersuchung 
Restschuldversicherungen 

DE - Bundeskartellamt 

2019 

Sektoruntersuchung Vergleichsportale 

DE - Centre Européen de la 
Consommation (Zentrum 
für uropäischen 
Verbraucherschutz e.V.) 

2011 

DE - EOS Holding GmbH   2017 

Ein europäischer Markt für Verbraucherkredite: 
existiert ein solcher wirklich? 

Mentalitätsvergleich: Vor allem Deutsche sind 
"Immobilienschuldner" 

DE - Finance Watch 
Germany 

2019 

Faire Kreditvergabe 

DE – SCHUFA. Kredit-
Kompass 

2017 

Empirische Untersuchung der privaten 
Kreditaufnahme in Deutschland 

206 

 
 
Author 

Published  Title 

DE – Spiegel online 

2019 

So schützen Sie sich vor den Tricks der 
Vergleichsportale 

DE - Verbraucherzentrale 

2017 

DE - Verbraucherzentrale 

2018 

DE - Verbraucherzentrale 

2019 

DE - Verbraucherzentrale 

2019 

DE - Verbraucherzentrale 
Bundesverband (vzbv) 

2018 

DE - Verbraucherzentrale 
NRW 

2017 

DE - German Banking 
Industry Committee 
(GBIC) 

DE - German Coalition 
against Usury 

DE - German Federal 
Financial Supervisory 
Authority (BaFin) 

2018 

2019 

2017 

Umfrage der Verbraucherzentrale Nordrhein-
Westfalen zum Umgang mit der 
Kreditwürdigkeitsprüfung bei Aufnahme eines 
Verbraucherdarlehens 

Konsumentenkredite. Befragung über 
Krediteinstellungen und Krediterfahrungen. 

Accompanying document to the consultation of the 
Consumer Credit Directive II 

Verantwortliche Verbraucherkredite. 

Begleitendes Forderungspapier zur Konsultation der 
Verbraucherkreditrichtlinie II  

Feedback from Verbraucherzentrale Bundesverband 
(vzbv) (DE) on the European Commission's 
Evaluation Roadmap of the Consumer Credit 
Directive  

Umfrage der Verbraucherzentrale Nordrhein-
Westfalen zum Umgang mit der 
Kreditwürdigkeitsprüfung bei Aufnahme eines 
Verbraucherdarlehens (Survey of the consumer 
advice center North Rhine-Westphalia for dealing 
with the creditworthiness check when taking out a 
consumer loan) 

Feedback from the German Banking Industry 
Committee (GBIC) (DE) on the European 
Commission's Evaluation Roadmap of the Consumer 
Credit Directive  

Evaluation of Directive 2008/48/EU with regard to 
the spread of Usurious Credit in Europe 

Ergebnisbericht zur Marktuntersuchung 
Restschuldversicherungen (Report on the market 
investigation of residual debt insurance) 

Deloitte Monitor 

2019 

The Future of Credit - A European perspective 

Danish Competition and 
Consumer Authority  

2018a 

Consumers Benefit From A Standardised Front Page 
To Loan Offers 

DK – Danish Competition 
and Consumer Authority  

2018b 

Competitive markets and consumer welfare 

Dutch Authority for the 
Financial Markets (AFM) 

2019 

EBA, EIOPA, and ESMA  2016 

A closer look at consumer borrowing An analysis of 
decision-making behaviour and potential 
interventions in the consumer credit market 

Joint Committee Discussion Paper on the Use of Big 
Data by Financial Institutions 

Economist 

July 15, 

What will happen to the Global Economy, July 15, 

207 

 
 
 
Author 

Published  Title 
2020 
2020 

EFIN, Financité 

2015 

Pay-day lenders: why can we consider them as being 
bad players on the credit market? 

Europe Economics, the 
Money Advice Service 

2018 

The Economic Impact of Debt Advice 

Eurostat 

- 

Labour Force Survey, 
https://ec.europa.eu/eurostat/statistics-
explained/index.php/EU_labour_force_survey_statist
ics 

ES - Asociacion de 
Usuarios de Bancos, Cajas 
y Seguros (ADICAE) 

ES – Asociacion General 
de Consumidores 
(ASGECO) 

ES – Asociacion General 
de Consumidores 
(ASGECO) 

2013 

Nivel de educacion financiera poblacion española 

2015 

2015 

Analisis cualitativo prestamos rapidos de entitaded 
no financieras 

Los problemas express que vienen con los créditos 
rápidos 

ES - Banco de España 

2008 

Memoria del servicio de reclamaciones 

ES – Banco de España - 
Eurosistema 

ES – Banco de España - 
Eurosistema 

ES – Banco de España - 
Eurosistema 

ES – Banco de España - 
Eurosistema 

ES – Banco de España - 
Eurosistema 

2017 

Memoria De Reclamaciones 

2018 

Memoria De Reclamaciones 

2018 

2019 

Encuesta sobre Préstamos Bancarios en España: abril 
de 2018  

Encuesta sobre Préstamos Bancarios en España: Julio 
de 2019  

2019 

Informe De Estabilidad Financiera  

ES – Boletín Oficial Del 
Estado (BOE) 

2015 

ES - Consejo de 
Consumidores y Usuarios 

2009 

Disposiciones generales jefatura del Estado - Ley 
5/2015, de 27 de abril, de fomento de la financiación 
empresarial 

La situación de endeudamiento y 
sobreendeudamiento financiero de las familias en la 
actual situación de crisis económica y del crédito 

ES - Organización de 
Consumidores y Usuarios 
(OCU)  

ES - Organización de 
Consumidores y Usuarios 
(OCU)  

ES - Organización de 
Consumidores y Usuarios 
(OCU)  

2019 

Los españoles pagan caro el crédito al consumo 

2019 

Crowdfunding: colaborando con micromecenazgo 

2019 

Deudas y morosos al mejor postor 

ES - Organización de 

2019 

Minicréditos = maxiabusos 

208 

 
 
Author 
Consumidores y Usuarios 
(OCU)  

ES - Organización de 
Consumidores y Usuarios 
(OCU)  

Published  Title 

2019 

Qué hacer si necesitas dinero 

ES- El Confidencial  

2018 

ES- El Economistas  

2019 

ES- El Pais - Economia  

2019 

ES- Expansion  

2018 

ES- Observatorio Cetelem   2018 

Bancos españoles - El crédito al consumo es un 70% 
más caro en España que en Europa 

Los préstamos al consumo son una herramienta clave 
para la economía 

La usura de las tarjetas ‘revolving’ estalla en los 
tribunales 

Vuelve el préstamo irresponsable, pero ahora al 
consumo  

Ecommerce Report: La Revolucion de la tienda 
online 

EUROFINAS 

2018 

Biannual Survey 2018 

Eurofinas 

Eurofinas 

Eurofinas 

Eurofinas 

EUROFINAS 

EUROFINAS 

EUROFINAS 

EUROFINAS 

EUROFINAS 

2018 

2018 

2009 

2015 

2012 

2013 

2014 

2015 

2017 

Feedback from Eurofinas (BE) on the European 
Commission's Evaluation Roadmap of the Consumer 
Credit Directive 

Eurofinas response to the European Commission’s 
public consultation on the Consumer Credit Directive  

Eurofinas’s Response to the European Commission’s 
Consultation on Responsible Lending and Borrowing 
in The EU 

Eurofinas Response to the European Banking 
Authority’s Draft Guidelines on Creditworthiness 
Assessment Draft Guidelines on Arrears and 
Foreclosure 

Key Facts and Figures 2012 

Key Facts and Figures 2013 

Key Facts and Figures 2014 

Key Facts and Figures 2015 

Key Facts and Figures 2017 

Eurofinas; Roland Berger 

2019 

Eurofinas; Roland Berger 

2018 

European Consumer Finance Industry in the Midst of 
Decisive Changes According to Second Edition of 
Eurofinas and Roland Berger Joint Survey on 'Future 
of European Consumer Finance' 

A Eurofinas Roland Berger Joint Survey 2018 
edition 

Eurofound 

Eurofound 

2020a 

Addressing household over-indebtedness 

2020b 

Labour market change – COVID-19: Policy 
responses across Europe 

Europe Economics 

2013 

A New Consumer Credit Regime: Benefits, 

209 

 
 
Author 

Published  Title 

Compliance Costs and Firm Behaviour 

Europe Economics 

2013 

Study on Credit Intermediaries in the Internal Market 

European Association of 
Co-operative Banks 
(EACB) 

2013 

EACB Comments on Preliminary Findings of The 
Civic Consulting Study on Over-Indebtedness (OI) 
Of European Households 

European Banking 
Authority (EBA) 

European Banking 
Authority (EBA) 

European Banking 
Authority (EBA) 

European Banking 
Authority (EBA) 

European Banking 
Authority (EBA) 

European Banking 
Authority (EBA) 

European Banking 
Authority (EBA) 

European Banking 
Authority (EBA) 

European Banking 
Authority (EBA) 

European Banking 
Federation (EBF) 

European Banking 
Federation (EBF) 

European Banking 
Federation (EBF) 

European Banking Industry 
Committee (EBIC) 

European Central Bank 
(ECB) 

2016 

2016 Consumer Trends Report 

2016 

Discussion Paper on innovative uses of consumer 
data by financial institutions 

2017 

2017 Consumer Trends Report 

2019a 

2018/2019 Consumer Trends Report 

2019b 

2019c 

EBA consults on draft Guidelines on loan origination 
and monitoring 

Opinion of the European Banking Authority on 
disclosure to consumers of banking services through 
digital means under Directive 2002/65/EC 

2020a 

Report on Big data and advanced analytics 

2020b 

2020c 

2020 

2019 

2018 

Thematic Note: First evidence on the use of 
moratoria and public guarantees in the EU banking 

Guidelines on loan origination and monitoring, 
EBA/GL/2020/06 

EBF’s views on the evaluation of the Consumer 
Credit Directive 

Structure and economic contribution of the banking 
sector 

Feedback from the European Banking Federation 
(BE) on the European Commission's Evaluation 
Roadmap of the Consumer Credit Directive 

2010 

EBIC Comments on The CCD Benchmark Study 

2008 

Monthly Bulletin January 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

2015 

2017 

2017 

2017 

Opinion of the European Central Bank of 18 
September 2015 on the conversion of Swiss franc 
loans (CON/2015/32)  

Recent Trends in Consumer Credit in the Euro Area 
(ECB Economic Bulletin, Issue 7 / 2017) 

The euro area bank lending survey - First quarter of 
2017 

The euro area bank lending survey - Second quarter 
of 2017 

210 

 
 
Author 

Published  Title 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

2017 

2017 

2018 

2019 

2019 

2019 

2019 

2018 

The euro area bank lending survey - Third quarter of 
2017 

The euro area bank lending survey - Fourth quarter of 
2017 

Cross-border banking in the EU since the crisis: what 
is driving the great retrenchment? 

The euro area bank lending survey - First quarter of 
2019 

The euro area bank lending survey - Second quarter 
of 2019 

The euro area bank lending survey - Third quarter of 
2019 

The euro area bank lending survey - Fourth quarter of 
2019 

Private consumption and its drivers in the current 
economic expansion, Economic Bulletin Issue 5, 
2018 

2019 

Financial Stability Review (FSR), November 2019 

2019 

Annual Report 2018  

European Commission 

2002 

European Commission 

2004 

European Commission 

2005 

European Commission 

2008 

European Commission 

2011 

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) 

Amended proposal for a Directive of the European 
Parliament on the harmonisation of the laws, 
regulations and administrative provisions of the 
Member States concerning credit for consumers 
repealing Directive 87/102/EC and modifying 
Directive 93/13/EC (COM (2004)747 final) 

Amended proposal for a Directive of the European 
Parliament and of the Council on credit agreements 
for consumers amending Council Directive 93/13/EC 
(COM (2005) 483 final/2) 

European Commission’s Green Paper on retail 
financial services: better products, more choice, and 
greater opportunities for consumers and businesses 
(COM/2015/0630 final) 

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 

European Commission 

2019 

Guidance on the interpretation and application of 

211 

 
 
Author 

Published  Title 

European Commission 

2008 

Council Directive 93/13/EEC of 5 April 1993 on 
unfair contract terms in consumer contracts 

Consumer protection in the internal market, Special 
Eurobarometer 298 

European Commission 

2009 

Report of the Expert Group on Credit Histories 

European Commission 

2010 

European Commission 

2010 

Geographical and labour market mobility- Special 
Eurobarometer 337 

Research note 4/2010 Over-indebtedness. New 
evidence from the EU-SILC special module 

European Commission 

2011 

Special Eurobarometer 373 

European Commission 

2012 

European Commission 

2013 

European Commission 

2014 

European Commission  

2015 

EU investigates consumer credit websites – a market 
underperforming for consumers  

Study on the coverage, functioning and consumer use 
of comparison tools and third-party verification 
schemes for such tools 

Report from The Commission on The 
Implementation of Directive 2008/48/EC on Credit 
Agreements for Consumers 

Green Paper on retail financial services Better 
products, more choice, and greater opportunities for 
consumers and businesses 

European Commission 

2016 

Financial Products and Services – Special 
Eurobarometer 446 

European Commission 

2016 

European Commission 

2016 

European Commission 

- 

European Commission 

2017 

European Commission 

2017 

European Commission 

2017 

European Commission 

2018a 

European Commission 

2018b 

Study on the role of digitalisation and innovation in 
creating a true single market for retail financial 
services and insurance 

Study on consumers’ attitudes towards Terms and 
Conditions (T&Cs) 

Consumer Credit Rights Campaign: Campaign 
Results and Evaluation 

Revised rules for payment services in the EU. 
Summary of: Directive (EU) 2015/2366 on EU-wide 
payment services 

Consumer conditions scoreboard: consumers at home 
in the single market 

Identifying market and regulatory obstacles to cross-
border development of crowdfunding in the EU 

Mapping of national approaches in relation to 
creditworthiness assessment under Directive 
2008/48/EC on credit agreements for consumers 

Commission proposal for a regulation on European 
crowdfunding services providers 

European Commission – 
DG Justice and Consumers 

2019 

Consumer conditions scoreboard: consumers at home 
in the single market - 2019 edition 

212 

 
 
Author 

Published  Title 

European Commission – 
DG Justice and Consumers 

2018c 

Consumer Markets Scoreboard: making markets 
work for consumers - 2018 edition 

European Commission – 
DG Justice and Consumers 

2016 

Consumer Markets Scoreboard - Making Markets 
Work for Consumers 

European Commission 

2020 

Staff Working Document on the Evaluation of 
Directive 2008/48/EC on credit agreement for 
consumers, SWD(2020) 254 final 

European Credit Research 
Institute (ECRI) 

2016 

The Business Models and Economics of Peer-to-Peer 
Lending 

European Credit Research 
Institute (ECRI) 

2013 

Household Debt and the European Crisis 

European Credit Research 
Institute (ECRI) 

2016 

The Trend Reversal of the Private Credit Market in 
the EU - Key Findings of the ECRI Statistical 
Package 2016 

European Credit Research 
Institute (ECRI) 

2017 

Consumer Credit, Digitalisation and Behavioural 
Economics. Are new protection rules needed? 

European Credit Research 
Institute (ECRI) 

2018a 

Consumer credit, digitalisation and behavioural 
economics: Are new protection rules needed? 

European Credit Research 
Institute (ECRI) 

2018b 

European Credit Research 
Institute (ECRI) 

2019 

Lending to European Households and Nonfinancial 
Corporations: Growth and Trends in 2017 - Key 
Findings from the ECRI Statistical Package 2018 

ECRI Statistical Package 2019 

European Credit Research 
Institute (ECRI) 

2019 

Price rules in consumer credit: should the EU act? 

European Data Protection 
Board 

2019 

New Rules for Credit Reporting Systems in the 
Digital Economy 

European Data Protection 
Board 

2019 

European Data Protection 
Board 

2019 

European Economic and 
Social Committee (EESC) 

2019 

European Federation of 
Insurance Intermediaries 
(BIPAR) 

European Financial 
Services Round Table 

2018 

2004 

The Romanian Supervisory Authority fines 
Raiffeisen Bank S.A. and Vreau Credit S.R.L. [ for 
unauthorized access to the personal data processed 
through the computer application used by Raiffeisen 
Bank S.A. in the crediting activity] 

The Data Protection Ombudsman ordered Svea 
Ekonomi to correct its practices in the processing of 
personal data related to the assessment of 
creditworthiness 

INT/884 Consumer Credit Directive (evaluation) 

Feedback from BIPAR (BE) on the European 
Commission's Evaluation Roadmap of the Consumer 
Credit Directive  

Consumer Protection and Consumer Choice - 
Consumer protection and the Single Market A fresh 
approach to breaking the deadlock 

213 

 
 
 
 
Author 

Published  Title 

European Microfinance 
Network 

European Network of 
Credit Unions 

2020 

2020 

European Parliament 

2003 

European Parliament 

2004 

European Parliament 

European Parliament 

European Parliament 

2012 

2012 

2014 

European Parliament 

2014 

European Parliament 

European Parliament 

European 
Parliament/Council 

2018 

2019 

2018 

European 
Parliament/Council 

2019 

European 
Parliament/Council 

2019 

European 
Parliament/Council 

1998 

Consumer credit agreements - review of EU rules. 
Feedback from: European Microfinance Network 

Consumer credit agreements - review of EU rules. 
Feedback from: European Network of Credit Unions 

Draft report on the proposal for a European 
Parliament and Council directive on the 
harmonisation of the laws, regulations and 
administrative provisions of the Member States 
concerning credit for consumers (COM (2002) 443 – 
C5‑ 0420/2002 – 2002/0222 (COD)) 

Second report on the proposal for a European 
Parliament and Council directive on the 
harmonisation of the laws, regulations and 
administrative provisions of the Member States 
concerning credit for consumers (COM (2002) 0443 
– C5-0420/2002 – 2002/0222(COD))  

Implementation of the Consumer Credit Directive 

Misleading Packaging Practices 

Consumer Protection Aspects of Financial Services 

Gold-plating' in the EAFRD to what extent do 
national rules unnecessarily add to complexity and, 
as a result, increase the risk of errors? 

Consumer Credit: Mis-selling of Financial Products 

A governance framework for algorithmic 
accountability and transparency 

Proposal for a DIRECTIVE OF THE EUROPEAN 
PARLIAMENT AND OF THE COUNCIL on 
representative actions for the protection of the 
collective interests of consumers, and repealing 
Directive 2009/22/EC 

Directive (EU) 2019/2161 of the European 
Parliament and of the Council of 27 November 2019 
amending Council Directive 93/13/EEC and 
Directives 98/6/EC, 2005/29/EC and 2011/83/EU of 
the European Parliament and of the Council as 
regards the better enforcement and modernisation of 
Union consumer protection rules (Text with EEA 
relevance) 

Directive (EU) 2019/770 of the European Parliament 
and of the Council of 20 May 2019 on certain aspects 
concerning contracts for the supply of digital content 
and digital services (Text with EEA relevance.) 

Directive 98/7/EC of the European Parliament and of 
the Council of 16 February 1998 amending Directive 
87/102/EEC for the approximation of the laws, 
regulations and administrative provisions of the 
Member States concerning consumer credit 

214 

 
 
Author 

Published  Title 

European 
Parliament/Council 

2000 

European 
Parliament/Council 

2002 

European 
Parliament/Council 

2002 

European 
Parliament/Council 

European 
Parliament/Council 

European 
Parliament/Council 

2003 

2005 

2008 

European 
Parliament/Council 

2014 

European 
Parliament/Council 

2014 

European 
Parliament/Council 

2015 

European 
Parliament/Council 

2015 

Directive 2000/31/EC of the European Parliament 
and of the Council of 8 June 2000 on certain legal 
aspects of information society services, in particular 
electronic commerce, in the Internal Market 
('Directive on electronic commerce') 

Directive 2002/65/EC of the European Parliament 
and of the Council of 23 September 2002 concerning 
the distance marketing of consumer financial services 
and amending Council Directive 90/619/EEC and 
Directives 97/7/EC and 98/27/EC 

Directive 2002/58/EC of the European Parliament 
and of the Council of 12 July 2002 concerning the 
processing of personal data and the protection of 
privacy in the electronic communications sector 
(Directive on privacy and electronic 
communications) 

Directive 2000/31/EC of the European Parliament 
and of the Council of 8 June 2000 on certain legal 
aspects of information society services, in particular 
electronic commerce, in the Internal Market 
('Directive on electronic commerce') 

Directive 2005/29/EC of the European Parliament 
and of the Council of 11 May 2005 ('Unfair 
Commercial Practices Directive'). 

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 

Directive 2014/17/EU of the European Parliament 
and of the Council of 4 February 2014 on credit 
agreements for consumers relating to residential 
immovable property and amending Directives 
2008/48/EC and 2013/36/EU and Regulation (EU) 
No 1093/2010 

Regulation (EU) No 910/2014 of the European 
Parliament and of the Council of 23 July 2014 on 
electronic identification and trust services for 
electronic transactions in the internal market and 
repealing Directive 1999/93/EC.  

Directive (EU) 2015/2366 of the European 
Parliament and of the Council of 25 November 2015 
on payment services in the internal market, amending 
Directives 2002/65/EC, 2009/110/EC and 
2013/36/EU and Regulation (EU) No 1093/2010, and 
repealing Directive 2007/64/EC (Text with EEA 
relevance) 

Directive (EU) 2015/849 of the European Parliament 
and of the Council of 20 May 2015 on the prevention 
of the use of the financial system for the purposes of 

215 

 
 
Author 

Published  Title 

money laundering or terrorist financing, amending 
Regulation (EU) No 648/2012 of the European 
Parliament and of the Council, and repealing 
Directive 2005/60/EC of the European Parliament 
and of the Council and Commission Directive 
2006/70/EC (Text with EEA relevance) 

Directive (EU) 2015/2366 of the European 
Parliament and of the Council of 25 November 2015 
on payment services in the internal market, amending 
Directives 2002/65/EC, 2009/110/EC and 
2013/36/EU and Regulation (EU) No 1093/2010, and 
repealing Directive 2007/64/EC (Text with EEA 
relevance) 

Regulation (EU) 2016/679 of the European 
Parliament and of the Council of 27 April 2016 on 
the protection of natural persons with regard to the 
processing of personal data and on the free 
movement of such data, and repealing Directive 
95/46/EC (General Data Protection Regulation). 

Directive (EU) 2016/97 of the European Parliament 
and of the Council of 20 January 2016 on insurance 
distribution (recast)Text with EEA relevance 

Regulation (EU) 2016/1011 of the European 
Parliament and of the Council of 8 June 2016 on 
indices used as benchmarks in financial instruments 
and financial contracts or to measure the performance 
of investment funds and amending Directives 
2008/48/EC and 2014/17/EU and Regulation (EU) 
No 596/2014 (Text with EEA relevance) 

Proposal for a Regulation of the European Parliament 
and of the Council concerning the respect for private 
life and the protection of personal data in electronic 
communications and repealing Directive 2002/58/EC 
(Regulation on Privacy and Electronic 
Communications) (COM(2017) 10 final). 

Regulation (EU) 2018/302 of The European 
Parliament and of the Council of 28 February 2018 
on addressing unjustified geo-blocking and other 
forms of discrimination based on customers' 
nationality, place of residence or place of 
establishment within the internal market and 
amending Regulations (EC) No 2006/2004 and (EU) 
2017/2394 and Directive 2009/22/EC 

Consumer Credit and Creditworthiness Assessments  

The Future of Credit Information 

EY FinTech Adoption Index 2017 - The rapid 
emergence of FinTech 

Svenska konsumtionslån 

216 

European 
Parliament/Council 

2015 

European 
Parliament/Council 

2016 

European 
Parliament/Council 

2016 

European 
Parliament/Council 

2016 

European 
Parliament/Council 

2017 

European 
Parliament/Council 

2018 

European Retail Financial 
Forum (ERFF) 

EXPERIAN 

EY 

Finansinspektionen 

2018 

2017 

2017 

2019 

 
 
Author 

Published  Title 

Finance Watch 

Finance Watch 

Finance Watch 

2017 

2019 

2018 

Finance Watch 

2019 

Consumer Protection Must Come before Financial 
Innovation 

What makes credit so risky? A consumer perspective  

Feedback from Finance Watch (BE) on the European 
Commission's Evaluation Roadmap of the Consumer 
Credit Directive  

Feedback from Finance Watch (BE) on the European 
Commission's Evaluation Roadmap of the Consumer 
Credit Directive  

Finance Watch Germany 

2019 

Rating Faire Kreditvergabe 

Finance Watch 

2020 

Finance Watch 

2021 

2014 

2018 

2016 

2019a 

2019b 

Financial Conduct 
Authority (FCA) 

Financial Conduct 
Authority (FCA) 

Financial Services User 
Group (FSUG)  

Financial Services User 
Group (FSUG)  

Financial Services User 
Group (FSUG)  

Financial Services User 
Group (FSUG)  

FR - Autorité de contrôle 
prudentiel et de résolution 
(ACPR) 

FR - Direction générale de 
la Concurrence, de la 
Consommation et de la 
Répression des frauds 
(DGCCRF) 

The consumer credit market: key problems and risks 
for consumer protection and responsible lending 

Consumer credit market malpractices uncovered: An 
in-depth study of consumer credit markets in Spain, 
Romania and Ireland and what it means for the 
Consumer Credit Directive review 

The FCA’s regulatory approach to crowdfunding 
over the internet, and the promotion of non-readily 
realisable securities by other media Feedback to 
CP13/13 and final rules 

High-Cost Credit Review: Overdrafts consultation 
paper and policy statement 

Assessment of current and future impact of Big Data 
on Financial Services  

Opinion on responsible consumer credit lending. 
Opinion and recommendations for the review of the 
Consumer Credit Directive 

FSUG Recommendations to the Commission 2019 -
2024 

2019c 

What makes credit so risky? A consumer perspective  

2019 

Financement participatif 

2018 

Crédit à la consommation : loyauté de l’information 
précontractuelle 

FR – Banque de France  

2016 

Financial Stability Review. Financial Stability in the 
Digital Era 

FR - Economie 

FR - Economie 

2016 

2017 

Rapport Annuel 2016 (Direction Générale De 
L’inspection Économique) 

Rapport Annuel 2017 (Direction Générale De 
L’inspection Économique) 

217 

 
 
Author 

Published  Title 

FR - Economie 

FR – Eurogroup 
Consulting  

FR – IFOP 

2018 

2018 

2016 

Crédit à la consommation : loyauté de l’information 
précontractuelle 

Etude Crédit Consommation France  

Perception des mentions légales à la radio 

FR - Ministère de 
l'économie et des finances - 
République française 

FR – Que choisir  

FR – Que choisir  

FR – Que choisir  

FR – Que choisir  

FR - UFC-Que Choisir, 
Service des  études 

FR - UFC-Que Choisir, 
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FR - UFC-Que Choisir, 
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FR - UFC-Que Choisir, 
Service des  études 

2011 

Note d'information n°2011-73 

2008 

2011 

2015 

2019 

2019 

2018 

Directive crédit à la consommation 

Crédit conso. Nouvelle protection en demi-teinte 

Crédit à la consommation (infographie) 

Plafonnement des sanctions en cas d’erreur ou de 
défaut de TAEG 

Loa/Lld: Une Degradation Massive Des Droits Des 
Emprunteurs 

Financement participatif. Face aux dérives 
persistantes, une regulation s'impose! 

2019 

Leasing, a Massive Degradation of Borrowers Rights 

2019 

Overdraft Facility: Excessively Expensive Credits 

FR - UFC-Que Choisir, 
Service des  études 

2019 

Le decouvert bancarie: les exces, la norme. Des 
Crédits Excessivement Chers 

FR- Economie (France) 

2015 

Le crédit à la consommation 

G20-OECD Task Force on 
Financial Consumer 
Protection 

G20-OECD Task Force on 
Financial Consumer 
Protection 

G20-OECD Task Force on 
Financial Consumer 
Protection 

2019 

2019 

2018 

Global Partnership for 
Financial Inclusion (GPFI) 

2018 

GlobeNewsWire 

2018 

Effective Approaches for Financial Consumer 
Protection in the Digital Age 

OECD Recommendation on Consumer Protection in 
the field of Consumer Credit 

Financial Consumer Protection Approaches in the 
Digital Age - G20/OECD Policy Guidance  

Use of Alternative Data to Enhance Credit Reporting 
to Enable Access to Digital Financial Services by 
Individuals and SMEs operating in the Informal 
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Financial Crisis - 10 years later. Consumer Credit 
Market on an upward curve 

Inbar Mizrahi‑
Borohovich, David Levi‑
Faur 

2020 

Varieties of consumer credit data regimes: A 
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218 

 
 
 
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ICF 

ING  

ING 

INSEE  

Institut für 
Finanzdienstleistungen; 
Zentrum für Europäische 
Wirtschaftsforschung2010 

2020 

2019 

2018 

2016 

2013 

Supporting study to the Evaluation of Directive 
2008/48/EC on credit agreements for consumers 

View on Consumer Lending trends in Europe  

“Saving comfort – a path to happiness. Examining 
money choices in Europe, USA and Australia” 
[extracted from the report Finance Watch “Is the 
human dignity of individual debtors at risk?”, 2020] 

Insuffisance de ressources selon le quintile de niveau 
de vie du ménage (en %). Fréquence très élevée de 
découverts bancaires 

Study on interest rate restrictions in the EU Final 
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International Consumer 
Protection Network (Icpen)  

2019 

Unfair contract terms and misleading trading 
practices in financial services 

International Financial 
Consumer Protection 
Organisation (FinCoNet) 

International Financial 
Consumer Protection 
Organisation (FinCoNet), 
G20 OECD Task Force on 
Financial Consumer 
Protection, OECD 
International Network on 
Financial Education 

International Financial 
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International Financial 
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International Monetary 
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International Monetary 
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Intrum 

IPSOS 

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Report on the Digitalisation of Short-term, High-Cost 
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Short-Term Consumer Credit Provision, regulatory 
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2019b 

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FinCoNet Annual Report 2018 

2017 

2015 

2018 

2020 

2019 

Credit Growth and Economic Recovery in Europe 
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IMF Survey: Central, Eastern and South-eastern 
Europe: Mind the Credit Gap 

European Consumer Payment Report 2018 

Covid-19: attitudes and behaviours in the EU – 
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219 

 
 
Author 

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960693] 

IT – Banca d’Italia 

IT – Crowd-funding 

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Bank of Italy Guides – Consumer credit made easy 

Normativa dell'equity-based crowdfunding in Italia 

IT - Opinioni. Credito al 
Consumo  

2010 

Trasparenza (e non) nella nuova direttiva sul credito 
al consume alla vigilia delrecepimento 

IT - ResearchGate  

2008 

La direttiva sul credito ai consumatori: alcune 
implicazioni giuridiche ed economiche 

IT - Università degli Studi 
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2013 

Il collegamento negoziale nel credito al consumo alla 
luce della direttiva 2008/48/CE 

IT – Garante per la 
Protezione dei Dati 
Personali 

Joasia Luzak and Mia 
Junuzović 

Jørgensen Tanja  

2019 

2019 

2018 

Junuzovic Mia  

2018 

Kantar (for the European 
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2020 

Kahneman, Daniel 

2011 

Karen Rowlingson, 
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Kösters, W. Et Al. (For 
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2016 

2004 

Codice di condotta per i sistemi informativi gestiti da 
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affidabilità e puntualità nei pagamenti 

Blurred Lines: Between Formal and Substantive 
Transparency in Consumer Credit Contracts 

Peer-to-Peer Lending – A New Digital Intermediary. 
New Legal Challenges 

Transparency of (pre-)contractual Information in 
consumer credit agreements: Is consistency the 
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Public Opinion in times of COVID-19, third round, 
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Thinking, Fast and Slow. New York: Farrar, Straus 
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Payday lending in the UK: the regul(aris)ation of a 
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An Economic Analysis of the EU Commission's 
Proposal for a New Consumer Credit Directive 

La Banque au service de la 
societe 

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Quel rôle le secteur financier joue-t-il dans 
l’économie? 

Latvian Ministry of 
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2018 

The Saeima passes new provisions for issuing non-
bank loans or so-called "quick loans" 

Leaseurope 

2018 

Biannual Survey 2018 

Lefevre, A. and M. 
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2017 

London Economics 

2013 

London Economics 

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Behavioural economics and financial consumer 
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Study on The Functioning of the Consumer Credit 
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Study on The Functioning of the Consumer Credit 
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220 

 
 
 
Author 

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London Economics 
Europe, VVA Consulting, 
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Behavioural study on the digitalisation of the 
marketing and distance selling of retail financial 
services 

London Economics, VVA 
Consulting and Ipsos  

2016 

Consumer Vulnerability across Key Markets in the 
European Union 

Marte Eidsand Kjorven 
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Martin Bijsterbosch; 
Tatjana Dahlhaus 

2020 

2011 

Who pays when things go wrong? Online Financial 
Fraud and Consumer Protection in Scandinavia and 
Europe 

Determinants of Credit-Less Recoveries 

Mary Faherty, Olive 
McCarthy and Noreen 
Byrne Centre for Co-
operative Studies, 
University College Cork on 
behalf of the Social 
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Multi-stakeholder expert 
group to support the 
application of Regulation 
(EU) 2016/679 (E03537) 

2017 

Interest Rate Restrictions on Credit for Low-income 
Borrowers 

2019 

Contribution from the Multistakeholder Expert 
Group to the stock-taking exercise of June 2019 on 
one year of GDPR application 

New Statesman 

2014 

The History of Payday Loans 

NL - Nationaal Instituut 
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2018 

Een persoonlijke lening: keuze en ervaingen van 
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NL - Autoriteit Financiële 
Markten (AFM) 

2014 

NL - Netherlands 
Authority for the Financial 
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2018 

NL - Netherlands 
Authority for the Financial 
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2018 

NL – Pricewise 

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NL - Vereniging van 
Financieringsonderneming
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2018 

Nuno Crato; Paolo Parulo 

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Klantbelang Dashboard 2018: Kredietaanbieders 
kunnen meer doen om problematische last te 
voorkomen 

AFM beboet Novum Bank voor aanbieden 
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Nederlanders betalen flinke rentes over hun leningen 
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Past Gedragscode aan ter bevordering verantwoorde 
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Data-Driven Policy Impact Evaluation - How access 
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221 

 
 
 
 
 
 
Author 

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OECD/G20 

2018 

INFE Policy Guidance Digitalisation and Financial 
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Office of Fair Trading 
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Payday Lending – Compliance Review Final Report 

Olha O. Cherednychenko, 
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2018 

Consumer Credit: Mis-selling of Financial Products, 
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Irresponsible Lending in the Post-Crisis Era: Is the 
EU Consumer Credit Directive Fit for Its Purpose? 

Oliver Wyman 

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Organisation for Economic 
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Organisation for Economic 
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Oxera 

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Consumer Credit in the time of COVID-19, At: 
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expertise/insights/2020/jun/consumer-credit-in-the-
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Facilitating access to finance – Discussion paper on 
Credit Guarantee Schemes 

Short-term consumer credit: provision, regulatory 
coverage and policy responses  

What Is the Impact of the Proposed Consumer Credit 
Directive? 

Panoptykon Foundation  

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The right to explanation of creditworthiness 
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Physica – Verlag, Daniela 
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PwC 

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2017 

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Ray Barrell, Abdulkader 
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Reifner, U. et al. (for 
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Representation in United 
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2017 

2017 

Consumer Credit in Europe, Risks and Opportunities 
of a Dynamic Industry 

How FinTech is shaping Financial Services 

Global FinTech Report 2017 

Financial terms and conditions and consumer 
protection 

The role of lender country factors in cross border 
bank lending 

Financial Supervision in the EU, A Consumer 
Perspective 

Comparison websites often mislead on flight and 
hotel prices, reveals EU screening 

(Ir)responsible leading and personal indebtedness: 
consumer credit marketing  

Seizov O., Wulf A. J. and 

2017 

The Transparent Trap: A Multidisciplinary 

222 

 
 
 
Author 
Luzak J. 

Service Public Wallonie 

SIRTI et al.  

The European Consumer 
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The European Consumer 
Organisation (BEUC) 

The European Consumer 
Organisation (BEUC) 

The European Consumer 
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Perspective on the Design of Transparent Online 
Disclosures in the EU 

Le devoir d’information en crédit à la consommation 

Perception des mentions légales à la radio 

Protecting Consumer Interests in the Retail Financial 
Services Area: Need for Independent and Efficient 
National Supervisors Everywhere in the EU 

BEUC Response to the Commission’s Call for 
Evidence 

2019 

2016 

2011 

2016 

2017 

The Never-Ending European Credit Data Mess 

2019a 

Access to consumers’ data in the digital economy 

The European Consumer 
Organisation (BEUC) 

2019b 

Review of the Consumer Credit Directive – BEUC 
Position 

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2017 

The Money Statistics, May 2017 

The World Bank Group 

2018 

The World Bank Group 

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The Global Findex Database 2017: Measuring 
Financial Inclusion and the Fintech Revolution 

Disruptive Technologies in the Credit Information 
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TransUnion 

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FinTechs Continue to Drive Personal Loan Growth 

UK - Department for 
Business Innovation and 
Skills, HM Treasury (BIS) 

2011 

Consumer credit and personal insolvency review: 
summary of responses on consumer credit and formal 
response on personal insolvency 

UK – Citizens advise  

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UK - Consumer Credit 
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2017 

UK - Department for 
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UK - Department for 
Business Innovation & 
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UK - Department for 
Business Innovation & 
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UK - Department for 
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UK - Financial Conduct 
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2011 

2011 

2011 

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Credit card companies pushing credit on millions of 
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Response to the European Commission’s Green 
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Guidance on the Regulations Implementing the 
Consumer Credit Directive Updated for EU 
Commission Directive  

2011/90/EU (Effective 1 January 2013) 

A New Approach to Financial Regulation: Summary 
of Responses to Consultation on Reforming the 
Consumer Credit Regime 

Consumer Credit and Personal Insolvency Review: 
Formal Response on Consumer Credit 

Consumer Credit and Personal Insolvency Review: 
Summary of Responses on Consumer Credit and 
Formal Response on Personal Insolvency 

Consumer Credit and Consumers in Vulnerable 
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223 

 
 
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UK - Financial Conduct 
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UK - Financial Conduct 
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2017 

2018 

From advert to action: behavioural insights into the 
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Assessing creditworthiness in consumer credit – 
Feedback on CP17/27 and final rules and guidance 
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2018 

The financial lives of consumers across the UK 

2019 

Credit Information Market Study 

UK - Financial Conduct 
Authority (FCA) 

UK - Financial Conduct 
Authority (FCA) 

UK - Oswald Stoll. 
Business and Technology 
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UK - Financial Conduct 
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2019 

2021 

UK - House of Lords, EU 
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UK – Shawbrook Bank 

2018 

Uuriintuya Batsaikhan and 
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UK- Which?  

2018 

2019 

UK- Which? 

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Big and Small Differences in Payday Loans In 
Europe 

The Woolard Review - A review of change and 
innovation in the unsecured credit market 

Consumer Credit in the European Union: 
Harmonisation and Consumer Protection (36th 
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Are consumers being misled by Representative 
APRs? Research into the UK personal loans market 
and lenders’ use of Representative APR in 
advertising 

Financial literacy and inclusive growth in the 
European Union 

Cheap ‘teaser’ loan rates costing borrowers £194m 

Borrowers face early-repayment charges on half of 
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VVA, CEPS 

first task of 
a  project to 
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quality of debt-advice services for European 
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World Bank Group 

2011 

General Principles for Credit Reporting 

Zentrum für europäischen 
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2011 

Ein Europaeischer Markt Fuer Verbraucherkredite: 
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224 

 
 
 
 
 
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Impact of COVID-19 

A&L Goodbody 

2020 

BRUEGEL DATASETS  2020 

“We’re from the regulator and we’re here to help”: bank 
regulatory responses to the COVID-19 crisis 

The fiscal response to the economic fallout from the 
coronavirus 

2020 

The financial fragility of European households in the time 
of COVID-19 

2020 

2020 

COVID-19: How Does Microfinance Weather the Coming 
Storm? 

Reshaping retail banking for the next normal 

Bruegel (Maria 
Demertzis, Marta 
Domínguez-Jiménez and 
Annamaria Lusardi) 

CGAP (The Consultative 
Group to Assist the Poor) 

Chandana Asif, Klaus 
Dallerup, Stephanie 
Hauser, Alia Parpia, 
and Zubin Taraporevala 
(McKinsey) 

Debt Camel 

2020  

2020 

2020 

2020 

2020 

2020 

Dominic O'Neill for 
Euromoney 

Eurofound 

European Systemic Risk 
Board 

European Banking 
Authority 

European Banking 
Authority  

European Banking 
Authority 

European Banking 
Authority 

European Banking 
Authority 

European Banking 
Authority 

European Banking 
Authority 

COVID-19 – credit score protection, but will it be harder to 
get credit? 

Coronavirus: European Banks step up push for regulatory 
forbearance 

COVID-19: Policy responses across Europe 

Policy measures in response to the COVID-19 pandemic 

Guidelines on legislative and non-legislative moratoria on 
loan repayments applied in the light of the COVID-19 
crisis 

EBA Report on the Implementation of selected COVID-19 
Policies 

2020 

Impact of COVID 19 on EU banking sector 

2020 

Consumer lending in the EU banking sector 

2020 

2019 

2020 

The EU banking sector: first insights into the COVID-19 
impacts - Thematic Note 

Opinion on disclosure to consumers buying financial 
services through digital channels 

COVID-19 banking measures and recommendations 
towards a sustainable recovery - based on BSG (Banking 
Stakeholder Group) Contribution for FISMA Meeting 28 
May 2020 

European Commission 

2020 

CPC Common Position COVID19 

European Commission 

2020 

Coordinated economic response to the COVID-19 

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Author 

Published  Title 

Outbreak 

European Commission 

2020 

Stakeholder dialogue outcome - Best practices in relation to 
relief measures offered to consumers and businesses in the 
context of the COVID-19 crisis-Brussels, 14 July 2020 

European Commission 
Communication 

2020 

Coronavirus response: Banking Package to facilitate bank 
lending- Supporting households and businesses in the EU 

European Investment 
Bank 

European Parliament 

2020 

Does This Change Everything? Private credit and 
coronavirus 

November 
2020 

Uncertainty/EU/Hope Public opinion in times of COVID-
19 Report 

European Parliament 

European Parliament 
(news) 

2020 

2020 

European Union 

2020 

Finance Watch 

Finance Watch  

2020a 

2020b 

Finance Watch  

2020c 

Financial Conduct 
Authority (UK) 

2020 

Financial Times 

2020 

Public opinion monitoring in the time of COVID-19 

COVID-19: watch out for online scams and 

unfair practices 

Coordinated economic response to the COVID-19 
Outbreak 

Basic Financial Services. A European wide study on 
financial services and products. 

Coronavirus: a dangerous wave of personal over-
indebtedness is on its way: here is how to avoid it. 

Health crisis: Credit is not the solution to the financial 
problems of precarious European households 

Coronavirus: information for consumers on personal loans, 
credit cards, overdrafts, motor finance and other forms of 
credit 

Soaring saving rates pose policy dilemma for world’s 
central bankers 

Fintech 

2020 

The impact of COVID-19 on the personal loan market 

Institute for fiscal studies  2020 

Despite short-term relief, households could face debt 
problems as a result of the coronavirus (COVID-19) 
pandemic 

International Monetary 
Fund 

2019 

World Economic Outlook, April 2020: The Great 
Lockdown 

Moody’s Analytics 

2020 

Morgan Stanley 

OECD 

OECD 

2020 

2019 

2020 

Forecasting the Impact of the COVID-19 Recession on 
Consumer Credit Losses 

The Coronavirus Recession: Sharper But Shorter 

Financial consumer protection responses to COVID-19 
Support for financial consumers 

Financial Consumer Protection responses to the COVID-19 
crisis 

S&P Global 

2020 

Credit Conditions Europe: Curve Flattens, Recovery 

226 

 
 
 
Additional documentation reviewed during desk research (per key topic) 

Author 

Published  Title 

Unlocks 

S&P Global 

2020 

Coronavirus loan moratoriums could be bank misconduct 
'hotspot,' EBA warns 

Shearman & Sterling 
lawyers 

2020 

Coronavirus implications in loan documents 

Squire – Patton Boggs 

2020 

COVID-19 Government Measures in Real Estate 

The Economist 

The European Consumer 
Organisation 

The Financial Inclusion 
Centre 

2020 

2020 

2020 

The New York Times 

2020 

Europe 

What will happen to the Global Economy? 

COVID-19 – implications for consumers and BEUC 
recommendations for policy responses 

Dealing with the immediate and long-term financial 
impacts of Covid19 

Virus Revives Italy’s Age-Old Shadow Safety Net: The 
Pawnshop 

World Bank Blogs 

2020 

Protecting financial consumers during the COVID-19 crisis 

Green loans 

Crédit Agricole 

2020 

Crédit Agricole launches “green” loans 

Deutsche Bank 

Energy Cities 

Energy Efficiency Data 
Protocol and Portal 

Energy Efficiency 
Mortgages Action Plan 

Energy Efficiency 
Mortgages Action Plan 

Energy Efficiency 
Mortgages Action Plan 

Energy Efficiency 
Mortgages Action Plan 

Euractiv 

European Banking 
Federation 

European Banking 
Federation 

2020 

2017 

2018 

2019 

2019 

2019 

Deutsche Bank is the leading green consumer finance 
operator in Italy 

The Brussels Green Loan Scheme 

Energy Efficiency Reporting Criteria Market Mapping 

Creating an energy efficient mortgage for Europe: The 
supporting role of the green building sector 

Technical report on the complete design of the energy 
efficiency mortgage 

Roadmap for market implementation of the energy efficient 
mortgage 

2018 

Consumer Research Insights 

2018 

2019 

More banks join EU-backed pilot scheme for green 
mortgages 

Encouraging and rewarding sustainability, Accelerating 
sustainable finance in the banking sector 

2017 

Toward a green finance framework 

European Commission 

2020 

The European Green Deal - roadmap and key actions 

European Commission 

2020 

A new vision for Europe's capital market: Final report on 

227 

 
 
 
Additional documentation reviewed during desk research (per key topic) 

Author 

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the High-level forum on the capital markets Union 

 European Commission 

2017 

Defining "green" in the context of green finance 

Financial Conduct 
Authority (UK) 

2018 

Climate Change and Green Finance – Discussion paper 

Linklaters 

2019 

The rise of green loans and sustainability linked lending 

Loan Market Association  2020 

Green Loan Principles - Supporting environmentally 
sustainable economic activity 

UN Environment 
Programme 

2007 

Green Financial Products & Services: Current State of Play 
and Future Opportunities 

Victor de Serière 

2020 

Idealism or realistic approaches? Regulatory possibilities to 
require financial institutions to more substantially 
contribute to achieving climate goals? An overview 

Over-indebtedness 

Eurofound 

Eurofound 

European Automobile 
Manufacturers 
Association 

2020 

2020 

2020 

Addressing household over-indebtedness 

Europe's pre-existing household debt condition likely to be 
exacerbated by virus crisis 

EU car sales forecast 2020: Record drop of 25% expected 
this year, says ACEA 

European Central Bank 

2020 

European Commission 

2013 

European Commission 

2013 

Indebtedness and spending: what happens when the music 
stops? 

The over-indebtedness of European households: Updated 
mapping of the situation, nature and causes, effects and 
initiatives for alleviating its impact (Country reports) 

The over-indebtedness of European households: Updated 
mapping of the situation, nature and causes, effects and 
initiatives for alleviating its impact (Synthesis of findings) 

2016 

Unfair Lending Practices and Toxic Loans 

European Financial 
Inclusion Network 

Eurostat 

Eurostat News 

2015 

2020 

Finance Watch 

2020d 

Quality of life Facts and views (Statistical Book)  

One in three people unable to face unexpected financial 
expenses (EU SILC survey) 

Debt data collection: Is the human dignity of individual 
debtors at risk? 

Konsumentverket 
(Swedish Consumer 
Agency) 

2014 

Is debt relief rehabilitative? An evaluation of debt relieved 
persons’ health, life quality and personal finances three 
years after conducted debt relief 

Kruis, G. , Jungmann, N., 
and Blommesteijn, M.  

2011 

Social Economic Benefit of Volunteer Projects Within 
Debt Aid, Social Force and Regioplan 

Margareta Dackehag; 
Lina Maria Ellegard; Ulf-

2016 

Day-to-Day Living Expenses and Mental Health 

228 

 
 
 
Additional documentation reviewed during desk research (per key topic) 

Author 
G Gerdtham; Therese 
Nilsson (University of 
Lund) 

Published  Title 

OECD 

OECD 

Sharon Collard 

Social Europe 

The Guardian 

The Guardian 

Use of algorithms  

2019 

2020 

2013 

2010 

2017 

2020 

Data on Household Debt 

Financial Consumer Protection and Ageing Populations 

Working together: Understanding motivations and barriers 
to engagement in the consumer debt marketplace 

Research note 4/2010 Over-indebtedness New evidence 
from the EU-SILC special module 

UK credit and debit card spending growing at fastest rate 
since 2008 

UK consumers repay record £7.4bn of debt in COVID-19 
lockdown 

Aziz, S. and M. Dowling  2018 

AI and Machine Learning for Risk Management 

Brookings Institution 

2020 

Bruckner, Matthew A.,  

2018 

The European Commission considers new regulations and 
enforcement for “high-risk” AI 

The Promise and Perils of Algorithmic Lenders' Use of Big 
Data 

Buchanan, Bonnie (The 
Alan Turing Institute) 

Datenethikkommission 
(Germany) 

Erik Kamenjasevic (KU 
Leuven Centre for IT and 
IP law blog) 

European Banking 
Authority 

2019 

Artificial Intelligence in Finance 

2019 

Opinion of the Data Ethics Commission 

2017 

Profiling in the financial sector 

2020 

Report on Big Data and Advanced Analytics 

European Commission 

2020 

On Artificial Intelligence - A European approach to 
excellence and trust 

European Commission 

2020 

White Paper on Artificial Intelligence. A European 
approach to excellence and trust 

European Commission 

2019 

An overview of Consumer Credit Scoring: Opportunities 
and Challenges 

Financial Conduct 
Authority (UK) 

Frederik Zuiderveen 
Borgesius (Council of 
Europe study) 

Institute of International 
Finance 

2020 

Credit Information Market Study – Terms of Reference  

2018 

Discrimination, artificial intelligence, and algorithmic 
decision-making 

2019 

Machine Learning Recommendations for Policymakers 

229 

 
 
 
 
Additional documentation reviewed during desk research (per key topic) 

Author 

Published  Title 

Institute of International 
Finance 

Karen Croxson, Philippe 
Bracke, Carsten Jung 
(FCA UK) 

Kamenjasevic 

Leonardo Gambacorta, 
Yiping Huang, Han Qiu 
and Jingyi Wang 

2019 

Machine Learning in Credit Risk 

2019 

Explaining why computer says ‘no’ 

2017 

2019 

Profiling in the financial sector under the GDPR 

How do machine learning and non-traditional data affect 
credit scoring? New evidence from a Chinese fintech firm 
(BIS Working Paper no. 834) 

Maria Fernandez Vidal, 
Jacobo Menajovsky 

2019 

Algorithm Bias in Credit Scoring: What’s Inside the Black 
Box? 

Mikella Hurley, Julius 
Adebayo 

N Aggarwal, H 
Eidenmüller, L Enriques, 
J Payne, K van Zwieten 

Public Goods 

Record Evolution 

The Danish Competition 
and Consumer Authority 

The European Consumer 
Organisation (BEUC) 

Use of social media 

2016 

Credit Scoring in the Era of Big Data 

2020 

2019 

2020 

2018 

Machine Learning, Big Data and the Regulation of 
Consumer Credit Markets: The Case of Algorithmic Credit 
Scoring 

Financial consumer protection and the European Social 
Model 

Credit Default Risk Prediction 

Consumers benefit from a standardised front page to loan 
offers 

2019 

AI rights for consumers 

Beibei Niu, Jinzheng Ren 
and Xiaotao Li 

2019 

Credit Scoring Using Machine Learning by Combing 
Social Network Information: Evidence from Peer-to-Peer 
Lending 

Credit score 

2019 

Can Social Scoring Really Affect Credit Applications? 

European Credit 
Research Institute (ECRI) 
and University of 
Edinburgh 

Experian 

2019 

2018 

Data sharing in credit markets: Does comprehensiveness 
matter? 

Making the invisible visible - Exploring the power of new 
data sources 

Fin Extra 

2019 

Lenders: What’s the deal with data? 

Henry, N. and Morris, J 

2018 

Scaling Up Affordable Lending: Inclusive Credit Scoring 

Nikita Aggarwal 

2019 

Big Data and the Obsolescence of Consumer Credit 
Reports 

Nizan Geslevich Packin 

2019 

Social Credit: Much More Than Your Traditional Financial 
Credit Score Data 

Ntwiga and Weke 

2016 

Consumer lending using social media data 

230 

 
 
Additional documentation reviewed during desk research (per key topic) 

Author 

Techcrunch 

Yildirim, Van del Bulte, 
Dellarocas 

Published  Title 

2019 

Europe should ban AI for mass surveillance and social 
credit scoring 

2014 

Credit Scoring with Social Network Data 

Feedback on the Inception Impact Assessment 

4Finance Group 

AER - Association of 
European Radios 

2020 

2020 

Altroconsumo 

2020 

American Express 

2020 

Association of Consumer 
Credit Information 
Suppliers 

Association of Credit 
Card Issuers in Europe 
(ACCIE) 

Asociación Usuarios 
Financieros (ASUFIN) 

BEUC, European 
Consumer Organisation 

COFACE-Families 
Europe 

Consumer Rights 
Protection Centre of 
Latvia 

European Association of 
Co-operative Banks 
(EACB) 

European Cancer Patient 
Coalition 

European Consumer 
Centre of Latvia 

2020 

2020 

2020 

2020 

2020 

2020 

2020 

2020 

2020 

European Network of 
Credit Unions (Belgium) 

2020 

Consumer credit agreements – review of EU rules. 
Feedback from: 4Finance Group 

Consumer credit agreements - review of EU rules. 
Feedback from: AER - Association of European Radios 

Consumer credit agreements - review of EU rules. 
Feedback from: Altroconsumo Associazione indipendente 
di consumatori 

Consumer credit agreements - review of EU rules. 
Feedback from: American Express 

Consumer credit agreements - review of EU rules. 
Feedback from: Association of Consumer Credit 
Information Suppliers 

Consumer credit agreements - review of EU rules. 
Feedback from: Association of Credit Card Issuers in 
Europe (ACCIE) 

Consumer credit agreements - review of EU rules. 
Feedback from: ASUFIN 

Consumer credit agreements - review of EU rules. 
Feedback from: BEUC, European Consumer Organisation 

Consumer credit agreements - review of EU rules. 
Feedback from: COFACE-Families Europe 

Consumer credit agreements - review of EU rules. 
Feedback from: Consumer Rights Protection Centre of 
Latvia 

Consumer credit agreements - review of EU rules. 
Feedback from: European Association of Co-operative 
Banks (EACB) 

Consumer credit agreements - review of EU rules. 
Feedback from: European Cancer Patient Coalition 

Consumer credit agreements - review of EU rules. 
Feedback from: European Consumer Centre of Latvia  

Consumer credit agreements - review of EU rules. 
Feedback from: European Network of Credit Unions 
(Belgium) 

European Microfinance 
Network 

2020 

Consumer credit agreements - review of EU rules. 
Feedback from: European Microfinance Network 

European Savings and 

2020 

Consumer credit agreements - review of EU rules. 

231 

 
 
Additional documentation reviewed during desk research (per key topic) 

Author 
Retail Banking Group 
(Belgium) 

Published  Title 

Finance Watch 

2020e 

UK - General Council of 
the Bar in England and 
Wales, Brussels Office 

DE - German Banking 
Industry Committee 

L'allocation de soutien 
familial (Asf) 

ES - Spanish Banking 
Association (AEB) 

Sudirección General de 
Arbitraje y Derechos del 
Consumidor DG 
Consumo. Ministerio de 
Consumo. España 

LU - Union 
Luxembourgeoise des 
Consommateurs 

2020 

2020 

2020 

2020 

2020 

2020 

Other relevant documents 

AFM - The Dutch 
Authority for the 
Financial Markets 

2019 

Allen & Overy 

2020 

Feedback from: European Savings and Retail Banking 
Group 

Consumer credit agreements - review of EU rules. 
Feedback from: Finance Watch 

Consumer credit agreements - review of EU rules. 
Feedback from: General Council of the Bar in England and 
Wales, Brussels Office 

Consumer credit agreements - review of EU rules. 
Feedback from: German Banking Industry Committee 

Consumer credit agreements - review of EU rules. 
Feedback from: L'allocation de soutien familial (Asf) 

Consumer credit agreements - review of EU rules. 
Feedback from: Spanish Banking Association AEB 

Consumer credit agreements - review of EU rules. 
Feedback from: Sudirección General de Arbitraje y 
Derechos del Consumidor DG Consumo. Ministerio de 
Consumo. España 

Consumer credit agreements - review of EU rules. 
Feedback from: Union Luxembourgeoise des 
Consommateurs 

A closer look at consumer borrowing. An analysis of 
decision-making behaviour and potential interventions in 
the consumer credit market 

New 2019 of the Court of Justice of the European Union on 
the expression of the annual percentage rate of charge in 
consumer credit agreements (Case C 290/19) 

Association Française des 
Sociétés Financières 
A.S.F 

Association Française des 
Sociétés Financières 
A.S.F 

CGAP (The Consultative 
Group to Assist the Poor) 

Challenges.fr 

European Banking 
Authority 

European Banking 
Authority 

European Banking 
Authority (EBA) 

2020 

L’activité des adhérents de l’ASF en 2019 

2020 

2020 

2017 

2020 

2020 

Credit a la consommation - Statistique mensuelle d'activite 
- Juillet 2020 

Digital Banks: How can they deepen financial inclusion? 

Le leasing, le produit financier qui relance les ventes d’auto 

Guidelines on loan origination and monitoring 

Consultation regarding Guidelines on loan origination and 
monitoring 

2020 

EBA Report on Financial Education 2019/2020 

232 

 
 
Additional documentation reviewed during desk research (per key topic) 

Author 

Published  Title 

European Banking 
Authority (EBA) 

European Banking 
Authority (EBA) 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

European Central Bank 
(ECB) 

2020 

2020 

2020 

2020 

EBA Financial Education Repository - Financial education 
initiatives by the National Supervisory 
Authorities 2019/2020 

Consumer Lending in the EU Banking Sector – March 
2020 Thematic Note 

Évaluation d’ensemble de la structure et de l’intégration 
financières 

The euro area bank lending survey – Second quarter of 
2020 

2020 

Economic Bulletin Issue 5/2020 

2020 

2020 

Households and non-financial corporations in the euro area: 
third quarter of 2019 (Press release) 

Household wealth and consumption in the euro area, ECB 
Economic Bulletin, Issue 1/2020 

European Commission  

2020 

A European strategy for data 

European Commission 

2020 

Consumer Protection Cooperation Network 

European Commission 

2020 

European Economic Forecast Spring 2020 - Institutional 
Paper 12 

European Commission 

2020 

Summer Economic Forecast 

European Commission 

2020 

Evaluation of the Consumer Credit Directive (Directive 
2008/48/EC) 

Federico 
Ferretti, Beatrice 
Bertarini 

2020 

Consumer Credit Advertising in the United Kingdom and 
Italy: The Shortcomings of the Consumer Credit Directive 
and Scope for Review (European Business Law Review) 

FI - Finansinspektionen 

2020 

FI Analysis 22: Fewer high-cost short-term credits after 
new rules 

FI - Finansinspektionen 

2020 

Swedish Consumer Credit 

FI - Finansinspektionen 

2020 

Credit checks must be improved 

FI – Office of the data 
protection ombudsman  

2019 

The Data Protection Ombudsman ordered Svea Ekonomi to 
correct its practices in the processing of personal data 

FIN-NET 

2020 

FIN-NET activity report 2018 

Jastra Ilic for finanso.se 

2020 

European Business P2P Lending Industry to Reach $6.5bn 
Value This Year 

Organisation for 
Economic Co-operation 
and Development 
(OECD) 

Organisation for 
Economic Co-operation 

2020 

Advancing the Digital Financial Inclusion of Youth 

2020 

OECD Business and Finance Outlook 2020 

233 

 
 
 
Additional documentation reviewed during desk research (per key topic) 

Author 
and Development 
(OECD) 

Public Goods 

Report Linker 

Scott Whitaker and 
Struan McOmish 

Statista dossier  

Statista dossier 

Statista dossier 

Statista dossier 

Statista dossier 

Published  Title 

2019 

2020 

2020 

2019 

2019 

2018 

2020 

2020 

Financial consumer protection and the European Social 
Model 

Global Peer-to-peer Lending Industry 

New Zealand: Changes to consumer credit legislation - 
further information 

Banking sector and credit lines in France 

European banking: structure and development 

Household finance in Belgium 

Fintech report 

Alternative lending report 

234 

 
 
 
 
 
Annex 11: List of abbreviations 

ACPR 
AFM 
AML 
AMLD 
APR 

BEUC 
CCD 
CEPS 
CHF 
CJEU 
CRPC 
CWA 

DG FISMA 
DG JUST 
DGC 

DGCCRF 
DMFSD 
EBA 
EBIC 
EC 
ECB 
ECD 
ECJ 
ECRI 
EEC 
EIOPA 
EMU 
EPD 
ESMA 
EU 
EUR 
FIN-NET 
FSUG 
GDPR 
HCC 
IDD 

Autorité de Contrôle Prudentiel et de Résolution [FR] 
Netherlands Authority for the Financial Markets [NL] 
Anti-Money Laundering  
Anti-Money Laundering Directive  
Annual Percentage Rate of Charge 
Bureau  Européen  des  Unions  de  Consommateurs  (The  European 
Consumer Organisation) 
Consumer Credit Directive 
Centre for European Policy Studies 
Swiss Franc 
Court of Justice of the European Union 
Consumer Rights Protection Centre  
Creditworthiness Assessment 
Directorate-General for Financial Stability, Financial Services and Capital 
Markets Union 
Directorate-General Justice and Consumers 
Direcção-Geral do Consumidor [PT] 
General  Directorate  for  Competition,  Consumption  and  Repression  of 
Fraud [FR] 
Distance Marketing of Consumer Financial Services  
European Banking Authority  
European Banking Industry Committee 
European Commission 
European Central Bank 
e-Commerce Directive  
European Court of Justice 
European Credit Research Institute  
European Economic Community 
European Insurance and Occupational Pensions Authority  
Economic and Monetary Union 
e-Privacy Directive  
European Securities and Markets Authority 
European Union 
Euro 
Financial Dispute Resolution Network  
Financial Services User Group  
General Data Protection Regulation 
High Commercial Court 
Insurance Distribution Directive 

235 

 
 
MCD 
MFI 
MS 
NACP 
PPI 
PSD2 
SECCI 
STHC 
UCPD 
UCTD 
UK 

Mortgage Credit Directive 
Monetary Financial Institutions 
Member States 
National Authority for Consumer Protection 
Payment Protection Insurance  
Payment Services Directive 
Standard European Consumer Credit Information  
Short-Term High-Cost Credit 
Unfair Commercial Practices Directive 
Unfair Contract Terms Directive  
United Kingdom 

236