European legislative developments in the field of consumer credit ALB National Conference 15 November 2012, Bucharest

About Eurofinas  The European Federation of Finance House Associations  Represents 17 Member Associations bringing together more than 600 finance and credit institutions involved in  Consumer Credit Lending Personal Consumption Motor Finance  Mortgage Credit Lending  Industrial Equipment Finance  Activities of the Federation

Where to Next? Mortgage Credit Directive (MCD) Review of the IMD Directive on ADR & ODR EU Data Protection Reform (DPR) CRD IV Package CCD Review Shadow Banking (SB) Review of the AML Directive Trialogue Procedure 1st Reading Preliminary Work

Main issues at stake Scope, definition of liquid assets, retail exposures Scope, consistence with CCD, credit intermediaries Trade bodies’ ADR systems, flexible procedural rules for ADR Proportionate treatment for various types of intermediaries and products Specificities of financial services Scope, proportionality of review, retained flexibility Scope, extension of CRD IV package, securitization Definition of low risk transactions, PEPs, beneficial owners CRD IV MCD ADR IMD DPR CCD SB AML

Where to Next? IMD 1 adopted Deadline transposition CEIOPS advice Public Hearing Deadline public consultation IMD 2 Internal EC work Including: - Studies - Impact Assessment - Collecting data from stakeholders Publication Proposal IMD 2 Discussions in Parliament/Council 12/200201/200511/201012/201002/201102/2011 – 07/ /07/2012 The IMD 2 (1)

Where to Next?  Provision of all types of insurance products (life/non-life) by all types of distribution channels : 1) Intermediaries (incl. credit institutions and their partners) 2) Insurance undertakings 3) Loss adjusters and professional management of claims  Differentiated regimes foreseen  Limited product exemptions  Minimum harmonisation The IMD 2 (2)

Where to Next?  Registration  Professional qualifications  Information to be provided to customers  Conflicts of interest and transparency  Sanctions  Delegated acts The IMD 2 (3)

Where to Next?  General Data Protection Regulation  Applicable to all sectors  Police and Criminal Justice Data Protection Directive  Only applicable to competent authorities The DPR

Where to Next?  Enhanced rights for data subjects:  Transparency  Consent  Information  Access  Right to be forgotten  Right to data portability Key Features (1)

Where to Next?  Enhanced obligations for data controllers and processors:  Data protection by design and by default  Data protection officer  Data protection impact assessment  Prior autorisation/consultation  Data breach notifications Key Features (2)

Where to Next?  Principles relating to data processing  Lawfulness of processing  Conditions for consent  Right to be forgotten  Delegated acts Eurofinas main concerns

Where to Next?  The EU Consumer Credit Sweep Initiative  APRC Guidelines  The European Parliament’s own-initiative report  What to expect next? The CCD Review

Where to Next?  EU enforcement action to check compliance with consumer protection laws  562 websites were checked, only 30% passed the sweep test for compliance with the relevant EU consumer rules  Most common problems identified: –Missing information in consumer credit advertising (APRC) –Omission of key information on the offer –Misleading presentation of the costs  Final Report in January 2013 The Consumer Credit Sweep Initiative

Where to Next?  Comitology Procedure (Art. 25 CCD)  Calculation Assumptions (Directive 14 Nov. 2011)  APRC Interpretative Guidelines  Potential Risks:  In case of litigation  Inclusion in the CCD review process APRC Guidelines

Where to Next?  General approach towards the CCD review  Points of attention (1):  Foreign currency loans  Right of withdrawal – linked credit agreements  Lack of clarity in relation to ancillary services  Advertising and marketing practices European Parliament’s report

Where to Next?  European Commission’s transposition check  London Economics study on the consumer credit market  Civic Consulting study on consumers over-indebtedness  European Commission’s Working Document  EBA Guidelines What to expect next?

Many thanks Tanguy van de Werve