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
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