Category: EU Retained Law

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New EU Consumer Credit Directive published

On 30 October 2023, the new EU Consumer Credit Directive (CCD2) was published in the Official Journal of the European Union.

The timeline is:

– CCD2 will come into force on 19 November 2023.

– EU member states must adopt, and publish, the regulatory framework to implement CCD2 by 20 November 2025.

– CCD2 will come into force on 20 November 2026 (and it will repeal the EU Consumer Credit Directive from 2008).

Because the United Kingdom is no longer an EU member state, it will not need to implement it. However, it remains to be seen to what extent any of CCD2 is implemented into UK law to ensure parity with EU law.

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European Parliament publishes press release on proposed new Consumer Credit Directive

On 12 July 2022, the European Parliament published a press release on a proposed new Consumer Credit Directive. These proposals are for a new Directive which will replace the EU’s Consumer Credit Directive from 2008.

The key points from the press release on the proposals are:

– it will aim to protect consumers online from credit card debt, overdrafts and loans that are unsuitable for them;

– it should cover credit agreements up to €150,000 (but Member states can implement a higher limit);

– a lighter touch regime for small value loans (up to €200), interest-free and without charge loans, or loans to be repaid within three months with minor charges;

– a creditworthiness assessment which requires information on a consumer’s current obligations or cost of living expenses. For those with thin credit files, other information can be considered (for example, non-bank lending, telecommunications and utilities bills);

– the European Banking Authority will be encouraged to published guidelines on how a creditworthiness assessment can be undertaken;

– consumers will be given clear information to allow them to make informed choices (including having all essential information in one place);

– consumers should be reminded of their right to withdraw within 14 days;

– credit advertisements should contain a clear and prominent warning that borrowing money costs money, and they should not encourage consumers who are over-indebted to apply for more credit; and

– overdrafts and credit overrunning products should be regulated.

Parliament negotiators will now talk with both the European Council and Commission on the final shape of the rules.

Whilst the United Kingdom is no longer a Member state, and already has in place many of these protections, it is likely that HM Treasury’s commitment to review the consumer credit regulatory regime will include looking at what is happening in the European Union (but, of course, the United Kingdom does not have to follow those proposals).

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House of Commons European Scrutiny Committee starts inquiry into the future of EU retained law

On 31 January 2022, the House of Commons European Scrutiny Committee started an inquiry into the future of EU retained law. The Committee has published a call for evidence, which is open for submissions until 14 March 2022.

The Committee says it will look into the following and other issues:

– In what ways is retained EU law a distinct category of domestic law? To what extent does this affect the clarity and coherence of the statute book?

– Is retained EU law a sustainable concept and should it be kept at all?

– Do the principles and concepts of EU law continue to provide an acceptable and suitable basis for legislation in post-Brexit UK?

– How has the concept of retained EU law worked in practice since it came into effect and what uncertainties or anomalies have arisen, or may yet arise in the future?

– (a) In light of the doctrine of parliamentary sovereignty, what was the rationale for retaining the principle of the ‘supremacy of EU law’? (b) What is the most effective way of removing the ‘supremacy of EU law’ and other incidents of EU law from the statute book?

– Should retained EU law be interpreted in the same way as other domestic law? Should the case law of the Court of Justice of the European Union have any relevance in the interpretation of retained EU law?

– Should a wider range of courts and tribunals have the ability to depart from retained EU case law and should it be binding at all?

– To what extent has retained EU law affected devolved competence?

– Are there issues specific to the devolved administrations and legislatures that should be taken into account as part of the Government’s reviews into retained EU law?

This inquiry follows the UK Government’s proposal to bring forward a Bill to allow EU retained law to be more easily changed or repealed (possibly by secondary legislation). The Government has published a press release and a policy paper.