Consumer credit: published the new European Directive

Prepared by Fabrizio Cascinelli, Mario Zanin, Francesco Della Scala

The new Directive on consumer credit – the Directive (UE) 2023/2225 dated 18 October 2023, cd. CCD II – it has been published on the Official Journal of the European Union at the end of the consultation process started in June 2021 by the European Commission.

The new Directive revises and modernizes the current rules on consumer credit agreements set out in Directive 2008/48/EC (Consumer Credit Directive – CCD).

The European Commission saw the need to revise these rules in the light of the evolution of the consumer credit sector due mainly to digitization in consumer decision-making and behavioral processes; moreover, evaluations of the adequacy and effectiveness of the rules showed that the 2008 Directive only partially achieved its objectives, generating regulatory fragmentation among Member States and failing to promote the development of a single credit market.

In this context, the new Directive aims to create a new harmonized regulatory framework between the EU Member States that guarantees all consumers a high and equivalent level of protection and creates a well-functioning and up-to-date internal market for consumer credit.

Without claiming to be exhaustive, the following are some of the new elements provided for in the new rules compared to what was prescribed by the CCD:

  • it is provided that all information provided to consumers is to be provided free of charge, irrespective of the means used to disseminate the information (art. 5) and that the conditions that consumers must satisfy in order to obtain credit are in no way discriminatory (art. 6);
  • specific provisions are laid down on the advertising and marketing of credit agreements, which must be fair, clear and not misleading (art. 7);
  • provision is made for consumers to have access at any time to general information on the entire range of credit products available, so that they are aware of the characteristics of each one (art. 9);
  • there is a ban on tying practices (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) and bundling is allowed (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 those other products or services) (art. 14);
  • specific rules are provided regarding the advisory services by creditors and credit intermediaries (art. 16);
  • given the substantial differences in the various Member States, rules of conduct to be observed by the creditor and the credit intermediary when granting credit (art. 32), as well as knowledge and competence requirements for staff (art. 33) are laid down in order to ensure a high level of professionalism and service.

Referring to the timing of the transposition and application of the Directive, it is envisaged that Member States will adopt and publish the legislative, regulatory and administrative provisions necessary to comply with the new rules by 20 November 2025, and make them applicable from 20 November 2026. From that date, the CCD will be officially repealed.

Directive (EU) 2023/2225 of the European Parliament and of the Council of 18 October 2023 on credit agreements for consumers and repealing Directive 2008/48/EC

Fabrizio Cascinelli

PwC TLS Avvocati e Commercialisti