EU Authorities Address COVID-19 Reporting, MCD, and PSD2 Issues
The European Banking Authority (EBA) announced that the guidelines on the reporting and disclosure of exposures subject to measures COVID-relief measures shall continue to apply until further notice. However, the competent authorities may exercise the flexibility provided in the guidelines to reduce or stop specific reporting and disclosure requirements. EBA published a discussion paper on its preliminary observations on selected payment fraud data under the Payment Services Directive (PSD2), with the comment period ending on April 19, 2022. In addition, the European Commission (EC) issued a call for advice letter for EBA on issues related to the review of Mortgage Credit Directive (2014/17/EU), with the deadline for this call for advice being June 30, 2022.
The key topics on which EBA has been invited to provide technical advice include exclusions from the scope of the Mortgage Credit Directive, peer-to-peer lending platforms, information disclosure rule, creditworthiness assessment, ways to facilitate the cross-border provision for mortgages, ways to contribute to financial stability, and green mortgages. EC had published a, in May 2021, a report that assessed implementation and functioning of the Mortgage Credit Directive for four years after its transposition deadline. The report highlighted that the Directive has been effective in raising the standard of consumer protection and has helped harmonize mortgage-lending practices across the member states. Nevertheless, the level of protection differs across member states, with some limitations, in particular in terms of scope and information disclosure requirements for digital delivery, seeming to hinder the full effectiveness of the rules.
The report also concluded that the impact on the creation of a single market for residential property loans has been limited, mostly for reasons outside the scope of the Directive. With the digitalization of financial services comes the possibility to increase cross-border activity in the near future. EC also adopted a proposal for a Directive on consumer credits, repealing and replacing the Consumer Credit Directive in June 2021. The new proposal included provisions on scope extension to crowdfunding credit services, rules to adapt information disclosure to digital channels and to tackle online practices exploiting consumer behavior, provisions to strengthen responsible lending especially in the digital context, and as provisions addressing consumer over-indebtedness. Given the important similarities between consumer credit and mortgage credit, EC will need to assess the proposed amendments to Consumer Credit Directive in its review of Mortgage Credit Directive with a view to ensuring coherence of the European Union law and providing clarity and consistency to credit markets.
Related Links
- Guidelines on COVID Reporting and Disclosures
- Discussion Paper on Payment Fraud Data
- Letter on Call for Advice (PDF)
- Call for Advice (PDF)
- Report on Mortgage Credit Directive, May 2021
Keywords: Europe, EU, Banking, COVID-19, Reporting, Disclosures, Guidelines, PSD2, Call for Advice, Mortgage Credit Directive, Lending, Credit Risk, Lending Marketplace, Crowdfunding Service Providers, P2P Lending, ESG, EBA, EC
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Related Articles
EU Agencies Update LCR Rule and Macro-Prudential Policy Recommendation
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
EBA Publishes Regulatory Standards to Identify Shadow Banking Entities
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
EIOPA Examines Physical Climate Risk Exposure, SII Non-Compliance
The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks
NGFS Report Explores Quantification of Climate Risk Differentials
The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations
EC Publishes Results on Review of Web Accessibility Directive
The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.
MAS Consults on Adjustment Spreads for Conversion of SOR Contracts
The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.
OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
EBA Proposes Standards to Support Secondary NPL Markets
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
EBA Issues Standards for Crowdfunding Service Providers Under ECSPR
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.
