The new EU rules aim at protecting consumers online from credit card debt, overdrafts and loans that are unsuitable for their financial situation.
In a text adopted by the Internal Market and Consumer Protection Committee, with 42 votes in favour, 1 against and 1 abstentions, MEPs say that legislation should cover credit agreements of up to €150,000, with the actual upper limit to be determined by the relevant national authorities based on the particular economic situation in a member state. Member states will also be able to apply limited changes to the obligations in the case of small value loans of up to €200, loans granted interest-free and without other charges, or loans that have to be repaid within three months and with minor charges
MEPs introduced further requirements to assess the creditworthiness of people taking out a loan before it is granted, including requiring information on a consumer’s current obligations or cost of living expenses. In order to assess the creditworthiness of consumers with little or no credit history, other information can be taken into consideration, such as from non-banking lenders, telecommunication providers and utilities.
As overdraft facilities and credit overrunning are increasingly common forms of consumer credit, MEPs want to regulate these financial products in order to increase the level of consumer protection and avoid over-indebtedness.