Credit agreements – residential property

Key points:

The European Economic and Social Committee is interested to see the proposal for a directive, but would express a number of reservations in this connection. The Committee supports the Commission's objective of creating the necessary conditions for the development of an efficient and competitive single market in order to restore consumer confidence and bolster financial stability. It nevertheless fears that what is contained in the proposal is not enough to achieve this objective.

The EESC considers that the measures aimed at ensuring responsible lending are not enough in themselves to improve market conditions and help to prevent over-indebtedness.

The Committee considers the regulation of credit intermediaries, for which it had called in its opinion on the proposal for a directive on credit to consumers, to be crucial given the many difficulties faced in relation to these professions, and that it should be dealt with in general rules rather than confined to the limited objective of this proposal.

It also feels that the proposal does not contribute to the achievement of the single market in mortgages in general and regrets that, in this area, use of an optional instrument has not been considered.

The Committee suggests that certain provisions be clarified or enlarged upon in order to enhance consumer information on variable rates.

The Committee recommends that borrowers be able to choose the insurance cover for their loan in order to increase competition amongst insurers.

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