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Consumer Credit Directive Regulations

The new regulations implementing the Consumer Credit Directive (2008/48/EC) have now been made and laid in Parliament. The key new elements in the new consumer credit regime are:

  • a duty on the lender to provide adequate explanations about the credit on offer to the consumer
  • an  obligation on the lender to check creditworthiness before offering or increasing credit
  • requirements concerning credit reference databases
  • a right for consumers to withdraw from a credit agreement within 14 days, without giving any reason
  • requirements to inform consumers when debts are sold on
  • requirements on credit intermediaries to disclose fees and links to creditors
  • a right to make partial early repayments of credit

In addition, the CCD amends existing consumer credit law in a number of areas, including advertising, consumer information, and the calculation of the total charge for credit.

Lenders have from 30 April 2010 until 31 January 2011 to comply with the new regulations. This means that for those lenders who are in a position to start using the new provisions, they can do so on or after 30 April. Any agreement signed on or after 1 February 2011 must comply with the new legislation.