Consumer credit—which way forward?

• Considers how the UK might react to the EU proposal for a Directive on Consumer Credit.

On 30 June 2021 the EU issued a proposal for a Directive of the European Parliament and of the Council on Consumer Credits (2021/1071 (COD)). The question is how will the UK react to this new Directive if at all?

Background

The current Directive is 2008/48/EC, which is a maximum harmonisation Directive and was implemented by a raft of UK Regulations in 2010. The only previous EU Directive on Consumer Credit was 87/102/EEC. This was to a significant extent modelled on the UK Consumer Credit laws which began with the Consumer Credit Act 1974 (CCA 1974) and therefore little had to be changed in UK law to comply with the 1987 Directive.

The 2008 Directive was very significantly different from that of 1987 and required the UK to introduce numerous changes to consumer