Today, the IMCO Committee has given its stamp of approval, paving the way for CCD2 to revolutionise responsible lending through enhanced creditworthiness assessment practices.
The CCD2 extends the scope of the directive to include previously excluded risky loans. This expansion covers loans ranging from below €200 to €100,000, loans offered through crowd-lending platforms, buy-now-pay-later products, and loans with a term of less than three months or low interest rates. Importantly, providers of these products will now be obligated to perform creditworthiness assessments, ensuring responsible lending practices.
The CCD2 introduces enhanced creditworthiness assessment rules, taking into account various points raised by our association. These assessments will be thorough, aiming to prevent irresponsible lending practices and over-indebtedness. Additionally, they will consider relevant factors to verify consumers’ ability to meet their obligations under credit agreements, focusing on loan affordability.
Consumers have seen several rights recognise, surpassing those already provided in the General Data Protection Regulation (GDPR). ACCIS advocated for these rights to be granted by creditors, who make the final credit decisions. To safeguard consumer data, the CCD2 prohibits creditors from processing special categories of personal data (such as health data) and data from social networks for creditworthiness assessments.
The CCD2 maintains the role of credit databases as key sources of information for creditworthiness assessments and extends the provisions that apply to them. Only supervised creditors fully compliant with the GDPR will have access to these databases for consumer credit purposes. Importantly, the CCD2 establishes minimum content requirements for credit databases, including information on consumers’ arrears in credit repayment, the type of credit, and the identity of the creditor.
Database providers now have an obligation to ensure the accuracy and timeliness of information contained within credit databases. The CCD2 enshrines consumer rights, including the requirement to inform consumers within 30 days of any credit repayment arrears being registered in a database, as well as their rights under the GDPR.
A Plenary vote at the European Parliament is expected within a couple of months, followed by the publication of the proposal in the Official Journal. Once published, the CCD2 will come into force after 20 days.