Yesterday, the European Parliament approved the Project for a Directive of the European Parliament and of the Council on credit agreements relating to residential property. The main guidelines of this Directive are the next:
A time period of at least 7 days during which the consumer will have sufficient time to compare offers, assess their implications and make an informed decision. This period shall be either a reflection period before the signing of the credit agreement or a right of withdrawal after the signing of the credit agreement or a combination of the two.
Ensure that the consumer is provided with clear and understandable information. Furthermore, the intermediary must give the consumer personalized information.
Possibility of dation in payment and adopt measures to encourage creditors to exercise reasonable forbearance before foreclosure proceedings are initiated.
Payment flexibility. In particular, consumers will have the right to discharge their credit obligations prior to the expiry of the credit agreement, and no disproportionate penalty should be applied for this event.
Establish a cap on the charges to the consumer in the event of default.
Higher control for creditors. Credit intermediaries shall be authorised to carry out the activities by a competent authority in their home Member State. Moreover the creditor must conduct a thorough assessment of the consumer’s creditworthiness, before the conclusion of the credit agreement.
Prohibition of tying practices (requesting investment products or a private pension product or open or maintain a payment or a savings account…).
Other matters: higher control when a credit agreement relates to a foreign currency loan and for variable rate loans. Besides, Member States shall ensure that reliable property valuation standards for mortgage lending purposes are developed within their territory.