|Theme||Housing Finance Policy|
European Council’s Proposal for a Directive of the European Parliament and of the Council on Credit Agreements Relating to Residential Property
The objective of this Directive (full document) is to ensure that credit agreements relating to immovable property provided to consumers benefit from a high level of protection. It therefore applies to credits secured by real estate, regardless of the purpose of the credit, credit agreements which are used to retain rights in property or land, or credits which are used to purchase a property in some Member States.
The directive includes details on the calculation of annual percentage rate of change (APRC) and the costs that can and cannot be included in that figure; obligations on assessing the creditworthiness of the borrower and disclosure obligations on the part of the consumer. It further stipulates that each member state shall ensure non-discriminatory access for all creditors from all member states to databases to assess creditworthiness of consumers, both private and public. It sets standards for advisory services to the consumer, and statutory and contractual rights of the consumer to discharge his obligations under a credit agreement prior to the expiry of the agreement. It stipulates requirements for the establishment and supervision of credit intermediaries and appointed representatives and non-credit institutions and cooperation obligations between competent authorities of different member states and the settlement of disagreements.