EBA responded to the EC consultation on the proposed new consumer agenda to express support for harmonization of the creditworthiness assessment process for consumer lending across EU; this includes the introduction of standards for the data and creditworthiness assessment process. The EBA response focuses on the revision of the Consumer Credit Directive (CCD or Directive 2008/48/EC) and builds on the recent EBA guidelines on loan origination and monitoring.
In its response, EBA calls for the introduction of binding principles on responsible lending such as an obligation to take into account target consumer interests, objectives, and characteristics when designing credit products. The response aims at reinforcing the requirements, for assessing the creditworthiness of borrowers, that are set out in the guideless and, thus, contributing to the EC’s planned changes to the CCD. In June 2020, EC had consulted on the new consumer agenda that, among other topics, contained a number of questions regarding the CCD. The questions also contained a series of proposals regarding the harmonization of the creditworthiness assessment of a borrower, which is a topic that EBA has addressed in the guidelines on loan origination and monitoring (EBA/GL/2020/06).
Keywords: Europe, EU, Banking, Credit Assessment, Consumer Credit, Consumer Credit Directive, Loan Origination, Credit Risk, EBA, EC
Previous ArticleBoE and FCA Launch Public Private Forum on Artificial Intelligence
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.