Streamlining of products and mortgage lending practices in Europe
Transposition of the mortgage credit directive in Europe
Stronger borrower protection rules, thanks to the streamlining of credit intermediation
Published in the Official Journal (JO) on 20 May, a decree transposes Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential real estate property into French law. Its objective is to strengthen consumer protection by imposing greater supervision of the activity of lenders and credit intermediaries. These new provisions affect credit institutions, financing companies, Intermediaries in banking operations and payment services, and consumers.
What are the applications of the European directive on credit agreements?
Here is a summary of the most important provisions:1/ Advertising of mortgage contracts
Borrowers must now be provided with general information about:
2/ Skills and ethics of lenders and credit intermediaries
3/ An independent advisory service dedicated to the borrower
4/ Calculation of APR, home improvement loans, and duty to inform borrowers
Implementation of the Mortgage Credit Directive
The decree entered into force on 1 July 2016. Nevertheless, the provisions on the requirements for professional mortgage lending skills are spread out between 1 January 2017 and 21 March 2019. With this in mind, the ORIAS has established continuous training. For it, there is "No revolution!" The French legal framework for mortgage loans is not fundamentally altered by this transposition. However, adjustments, some significant, are to be expected.
Although the new provisions will impact mortgage professionals, a system that Banque de France considers robust, some fear much more significant changes, which would come from the Basel Committee.
For details of the adoption of the European mortgage law, you can also consult our article here font>To follow us and benefit from our market intelligence and advice, Carte Financement is also on social networks: