The proposal for a new EU Consumer Credit Directive: towards responsible lending in the digital age?

Abstract

Large-scale irresponsible consumer credit lending across the EU, along with the growing digitalisation of the market place, in the last decade or more has exposed serious limitations of the 2008 Consumer Credit Directive in ensuring adequate consumer protection in the unsecured credit markets. To remedy the shortcomings of the current regulatory regime, the European Commission’s Proposal for a New Consumer Credit Directive seeks to introduce a number of important changes. This article discusses the proposed changes and critically assesses their potential to ensure responsible lending in the digital age. It concludes that the adoption of the revised directive would represent a major step forward in combatting irresponsible lending practices and protecting European consumers against overindebtedness in the digital market place. At the same time, however, the effectiveness of the new consumer credit directive will depend to a considerable extent on its implementation and application in the Member States.