The Permanent Representatives Committee today approved a compromise text agreed with the European Parliament on 22 April on legislation aimed at creating a genuine internal market for mortgage credit, with a high degree of consumer protection.
The presidency will confirm to the Parliament the Council’s approval of the text, enabling adoption of the legislation at first reading.
The draft directive sets out to to create an efficient and competitive single market for consumers, creditors and credit intermediaries. It seeks to establish a high level of protection whilst addressing irresponsible lending and borrowing which, in the recent context of financial crisis, has contributed to increased numbers of unaffordable loans, defaults and foreclosures throughout the EU.
The text also seeks to promote financial stability by ensuring that mortgage credit markets operate in a responsible manner.
EU rules on misleading advertising and on unfair terms in consumer contracts do not take account of the specificities of mortgage credit. Pre-contractual information for mortgage loans is the subject of a voluntary code of conduct, though its implementation has been inconsistent. Mortgage and renovation loans in excess of €75 000 are outside the scope of EU rules on consumer credit, and there are currently no EU requirements for non-credit
institutions providing credit or for credit intermediairies.