Irresponsible Lending into the Post-Crisis age: could be the EU Consumer Credit Directive Fit because of its function?

Irresponsible Lending into the Post-Crisis age: could be the EU Consumer Credit Directive Fit because of its function?

Abstract

A lot more than ten years following the outbreak of this international crisis that is financial customers throughout the EU have already been increasing their standard of debt when it comes to both amount and value of credit rating services and products. On the list of known reasons for this trend would be the low interest environment, the novel business methods of lenders directed at finding brand new income sources, such as for instance charges and costs on loans, while the revolutionary company models rising in an ever more electronic market, such as for instance peer-to-peer financing. These developments provide brand brand new dangers to customers and pose new challenges for regulators when it comes to simple tips to deal with them. This short article aims to discover the problematic facets of credit rating provision into the post-crisis lending environment across the EU also to evaluate as to the extent the 2008 credit rating Directive presently in effect, which aims to guarantee sufficient best online payday loans in Utah customer protection against irresponsible financing, is fit for the function today. In this context, this article explores the overall concept of “responsible lending” with emphasis on credit, identifies probably the most imminent reckless financing techniques within the credit areas, and tentatively analyses their key motorists. Moreover it reveals some essential restrictions for the customer Credit Directive in supplying sufficient consumer security against irresponsible lending and provides tentative tips for enhancement. When you look at the authors’ view, enough time now seems ripe for striking a unique stability between use of credit and customer security in European credit rating legislation.

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