Activities of Liem HOANG NGOC related to 2011/0062(COD)
Shadow opinions (1)
OPINION on the proposal for a directive of the European Parliament and of the Council on credit agreements relating to residential property
Amendments (47)
Amendment 119 #
Proposal for a directive
Article 1 – paragraph 1 a (new)
Article 1 – paragraph 1 a (new)
Member States may maintain or adopt stricter national rules with regard to any aspect of this Directive.
Amendment 127 #
Proposal for a directive
Article 2 – paragraph 2 – point b
Article 2 – paragraph 2 – point b
Amendment 133 #
Proposal for a directive
Article 3 – paragraph 1 – point d
Article 3 – paragraph 1 – point d
(d) ‘Ancillary service’ means a financial service, required by the creditor - de jure or de facto- , or by law and offered to the consumer by the creditor or, a credit intermediary or a third party in conjunction with the credit agreement.
Amendment 140 #
Proposal for a directive
Article 3 – paragraph 1 – point k
Article 3 – paragraph 1 – point k
(k) ‘Total cost of the credit to the consumer’ means the total cost of the credit toall the costs including interest, commissions, taxes and any other kind of fees directly or indirectly linked to the loan - except for notarial costs - and which the consumer ais defined in Article 3(g) of Directive 2008/48/ECrequired to pay in connection with the credit agreement, including but not restricted to all of the costs arising of contracts to repay the credit, secure or insure the securing property and facilitate payments as well as any further ancillary service concluded conditionally to or in the context of the home loan contract.
Amendment 144 #
Proposal for a directive
Article 3 – paragraph 1 – point o
Article 3 – paragraph 1 – point o
(o) ‘Creditworthiness assessment’ means the evaluation of a consumer's ability to meet his debt obligations, based on objective information regarding his or her individual circumstances.
Amendment 148 #
Proposal for a directive
Article 4 – paragraph 1 – subparagraph 1
Article 4 – paragraph 1 – subparagraph 1
Member States shall designate the competent authorities empowered to ensure implementation of this Directive and shall ensure that they are granted all the powers necessary for the performance of their dutiesenactment of all its provisions in the interest of the market and all market participants. They shall ensure that they are granted sufficient resources and all the investigating and sanctioning powers necessary for the performance of their duties, including power to access all premises and relevant documents. The competent authorities shall, inter alia, carry out 'mystery shopping', where applicable, to check the proper implementation of this Directive.
Amendment 150 #
Proposal for a directive
Article 4 – paragraph 1 – subparagraph 1 a (new)
Article 4 – paragraph 1 – subparagraph 1 a (new)
In the case of activity in a host Member State, supervision of the ongoing activities of creditors and credit intermediaries shall be performed by the competent authority of the host Member State. The competent authority of the home Member State shall be required to provide the competent authority of the host Member State with all relevant information. Competent authorities of the host Member State shall have the power to intervene if credit intermediaries fail to comply with their duties and responsibilities defined in this Directive. In addition, competent authorities of the host Member State shall be granted the right to refuse authorisations.
Amendment 151 #
Proposal for a directive
Article 4 – paragraph 1 – subparagraph 2
Article 4 – paragraph 1 – subparagraph 2
Member States shall ensure that the authorities designated as competent for ensuring the implementation of Articles 18, 19, 20, 21, 22 and 213 of this Directive are one of those competent authorities included in Article 4(2) of Regulation (EU) No 1093/2010 establishing a European Supervisory Authority (European Banking Authority).
Amendment 156 #
Proposal for a directive
Article 5 – paragraph 1
Article 5 – paragraph 1
1. Member States shall require that, when granting, intermediating or advising on credit and, where appropriate, ancillary services to consumers, the creditor or the credit intermediary acts honestly, fairly and professionally in accordance with the best interests of the consumer. Member States shall ensure that in case of non compliance with requirements referred to in subparagraph 1, provisions are set to allow for compulsory adjustment of the credit agreement in the interest of the affected consumer and at no charge for him or, at the choice of consumer, the ability to withdraw from the agreement in a way that leaves no damages to him.
Amendment 158 #
Proposal for a directive
Article 5 – paragraph 2
Article 5 – paragraph 2
2. Member States shall ensure that the manner in which creditors remunerate their staff and the relevant credit intermediaries and the manner in which credit intermediaries remunerate their staff do not impede compliance with the obligation to act in accordance with the best interests of the consumer, as referred to in paragraph 1. Remuneration shall be product neutral. In particular, no staff or credit intermediary shall, under any circumstances, be paid a fee or a commission dependent on the rate or the type of credit product signed with the consumer. In case of adjustment of credit agreements no remuneration for new agreements shall be foreseen unless the adjustment of the existing agreement is proven to have not solved the problem. All inducements in kind to credit intermediaries shall be banned. Remuneration shall take into account the rate of defaults.
Amendment 162 #
Proposal for a directive
Article 6 – paragraph 1 – point b
Article 6 – paragraph 1 – point b
(b) The natural persons within the management of creditors and credit intermediaries who are responsible for or have a role in the intermediation, advice or approval of the credit agreement, possess appropriate knowledge and competence in relation to credit agreements. They shall be subject to prescribed continuous professional development to validate their knowledge and competence.
Amendment 164 #
Proposal for a directive
Article 6 – paragraph 1 – point c
Article 6 – paragraph 1 – point c
(c) Creditors and credit intermediaries are monitoredsupervised by the competent authority in order to assess whether the requirements referred to in paragraph 1, points (a) and (b), are complied with on a continuing basis.
Amendment 170 #
Proposal for a directive
Article 8 – paragraph 2 – subparagraph 1 – point c
Article 8 – paragraph 2 – subparagraph 1 – point c
(c) the borrowing rate, indicating whether this is fixed or variable or both, together with particulars of any charges included in the total cost of the credit to the consumer. The APRC should be included into the advertisement at least as prominently as any other numerical information;
Amendment 173 #
Proposal for a directive
Article 8 – paragraph 2 – subparagraph 2
Article 8 – paragraph 2 – subparagraph 2
The standard information shall be easily legible or clearly audible as appropriate, depending on the medium used for advertising and marketing. Any information provided throughout the advertising must adhere to the displayed representative example. Member States shall adopt criteria for defining a representative example.
Amendment 175 #
Proposal for a directive
Article 8 – paragraph 3
Article 8 – paragraph 3
3. Where the conclusion of a contract regarding anIn case of ancillary service relating to the credit agreement, in particular insurance, is compulsory in order to obtain the credit or to obtain it on the terms and conditions marketed, andf the cost of that service cannot be determined in advance, the obligation to enter into that contract shall also be stated in a clear, concise and prominent way, together withand its cost shall be included in the annual percentage rate of charge based on the cost of a similar product offered by the creditor or another provider.
Amendment 177 #
Proposal for a directive
Article 8 a (new)
Article 8 a (new)
Amendment 183 #
Proposal for a directive
Article 9 – paragraph 1 – subparagraph 2 – point g
Article 9 – paragraph 1 – subparagraph 2 – point g
(g) an indic representative example of the total cost of credit for the consumer and annual percentage rate of charge;
Amendment 184 #
Proposal for a directive
Article 9 – paragraph 1 – subparagraph 2 – point i
Article 9 – paragraph 1 – subparagraph 2 – point i
(i) whether there is a possibility of early repayment and, where applicable, a description of the conditions attached to early repayment;
Amendment 190 #
Proposal for a directive
Article 9 – paragraph 2 – subparagraph 1
Article 9 – paragraph 2 – subparagraph 1
Member States shall ensure that the creditor and, where applicable, the credit intermediary, without undue dimmediatelay after the consumer has given the necessary information on his needs, financial situation and preferences in accordance with Article 14, provides the consumer with the personalised information needed to compare the credits available on the market, assess their implications and take an informed decision on whether to conclude a credit agreement. Such information, on paper or on another durable medium, shall be provided free of charge by means of the European Standardised Information Sheet (‘ESIS’), as set out in Annex II.
Amendment 195 #
Proposal for a directive
Article 9 – paragraph 2 – subparagraph 2
Article 9 – paragraph 2 – subparagraph 2
Member States shall ensure that when an offer binding on the creditor is provided to the consumer, it shall be accompanied by an ESIS. In such circumstances,a draft credit agreement is provided to the consumer attached to the ESIS. Member States shall ensure that the credit agreement cannot be concluded until the consumer has had sufficient time to compare the offers, assess their implications and take an informed decision on whether to accept an offer, regardless of the means of conclusion of the contract.
Amendment 197 #
Proposal for a directive
Article 9 – paragraph 2 – subparagraph 4
Article 9 – paragraph 2 – subparagraph 4
Any additional information which the creditor or where applicable, the credit intermediary, may provide to the consumer shall be given in a separate document which may be annexed to the ESIS. In Member States that impose strict matching rules between the mortgage loans (assets) and the mortgage bonds (liabilities) of mortgage credit institutions, the indication of the interest rate in the ESIS may be subject to changing market conditions.
Amendment 202 #
Proposal for a directive
Article 9 – paragraph 5
Article 9 – paragraph 5
5. Member States shall ensure that the creditor or credit intermediary, upon request of the consumer, provides the consumer with a copy of the draft credit agreement free of charge. This provision shall not apply in cases where the creditor is unwilling, at the time of the request, to proceed to the conclusion of the credit agreement with the consumer.
Amendment 204 #
Proposal for a directive
Article 9 a (new)
Article 9 a (new)
Article 9a Variable interest rate 1. Member States shall adopt measures to protect consumers against defaulting when variable interest rates change significantly. If Member States do not define general caps on variable interest rates, they shall ensure that all creditors specify a maximum cap. Creditworthiness shall be checked on the basis of this maximum cap. 2. Changes in interest rates shall be based only on objective, reliable, public and external indices to the creditor, like market rates. 3. When the interest rate increases, the consumer shall always have the possibility to opt to extend the repayment period, with a maximum of 5 years, without supplementary costs and without increase in the periodic instalments.
Amendment 206 #
Proposal for a directive
Article 10 – paragraph 1 – introductory part
Article 10 – paragraph 1 – introductory part
1. Prior to the performance of any of the services listed in Article 3(e), a credit intermediary shall provide the consumer with at least the following information, free of charge:
Amendment 207 #
Proposal for a directive
Article 10 – paragraph 1 – point h
Article 10 – paragraph 1 – point h
(h) for those credit intermediaries that are not tied, the existence of commissionsthe existence of commissions or any other type of gratifications, including in kind, where applicable, payable by the creditor or any other third party to the credit intermediary for his services.
Amendment 208 #
Proposal for a directive
Article 10 – paragraph 2
Article 10 – paragraph 2
2. Credit intermediaries who are not tied shall, at the consumer's request,shall provide information on the variation in levels of commission, expressed in absolute values, payable by the different creditors providing the credit agreements being offered to the consumer. The consumer shall be informed that he has the right to request such information.
Amendment 212 #
Proposal for a directive
Article 11 – paragraph 1
Article 11 – paragraph 1
Member States shall ensure that creditors and, where applicable, credit intermediaries provide adequate explanations to the consumer on the proposed credit agreement(s) and any ancillary service(s), in order to place the consumer in a position enabling him to assess whether the proposed credit agreements are adapted to his needs and financial situation. An adequate explanation shall include the provision of personalised information on the characteristics of the credits on offer, including their costs and risks, without however formulating any recommendation. Creditors and, where applicable, credit intermediaries shall accurately assess the level of knowledge and experience with credit of the consumer by any means necessary so as to enable the creditor or the intermediary to determine the level of explanations to be given to the consumer and adjust such explanations accordingly.
Amendment 214 #
Proposal for a directive
Article 12 – paragraph 1
Article 12 – paragraph 1
1. The annual percentage rate of charge, equating, on an annual basis, to the present value of all commitments (drawdowns, repayments and charges), future or existing, agreed by the creditor and the consumer, shall be calculated in accordance with the mathematical formula set out in Annex I. The annual percentage rate of charge shall take due account of the impact of all relevant factors. The annual percentage rate shall include all costs and the cash flow with compound contracts that are to repay the credit amount.
Amendment 216 #
Proposal for a directive
Article 12 – paragraph 2 – subparagraph 2
Article 12 – paragraph 2 – subparagraph 2
Where the opening of an account is obligatory in order to obtain the credit, the costs of maintaining such an account, the costs of using a means of payment for both payment transactions and drawdowns on that account, and other costs relating to payment transactions shall be included in the total cost of credit to the consumer, unless the costs have been clearly and separately shown in the credit agreement or in any other agreement concluded with the consumer.
Amendment 217 #
Proposal for a directive
Article 12 – paragraph 4
Article 12 – paragraph 4
4. In the case of credit agreements containing clauses allowing variations in the borrowing rate and, where applicable, in the charges contained in the annual percentage rate of charge but unquantifiable at the time of calculation, the annual percentage rate of charge shall be calculated on the assumption that the borrowing rate and other charges will be calculated at the level set at the signature of the contract. If the consumer names alternative ancillary services providers, the creditor and the credit intermediary shall recalculate the APRC on the basis of the costs of those ancillary services.
Amendment 218 #
Proposal for a directive
Article 13 – paragraph 2
Article 13 – paragraph 2
2. However, the parties may agree in the credit agreement that the information referred to in paragraph 1 is to be given to the consumer periodically in cases where the change in the borrowing rate correlates directly with a change in a reference rate, the new reference rate is made publicly available by appropriate means and the information concerning the new reference rate is also kept available in the premises of the creditor, and communicated personally to the consumer together with the amount of new monthly instalments.
Amendment 222 #
Proposal for a directive
Article 14 – paragraph 1
Article 14 – paragraph 1
1. Member States shall ensure that, before the conclusion of the credit agreement, a thorough assessment of the consumer'’s creditworthiness isand the affordability of the credit agreement and its conditions to the consumer are conducted by the creditor, based on criteria that should be made public including the consumer'’s income, savings, debts and other financial commitments. That assessment shall be carried out on the basis of the necessary information, obtained by the creditor or, where applicable, credit intermediary from the consumer and from relevant internal or external sources and shall respect the requirements with regard to necessity and proportionality set out in Article 6 of Directive 95/46/EC. Member States shall ensure that creditors establish appropriate processes to assess the consumer’s creditworthiness of the consumerand affordability of the credit agreement and its conditions to the consumer in the interest of consumers. These processes shall be reviewed at regular intervals and up-to-date records of those processes shall be maintained.
Amendment 225 #
Proposal for a directive
Article 14 – paragraph 1 a (new)
Article 14 – paragraph 1 a (new)
1a. The objective pursued by the consumer’s creditworthiness assessment shall include the prevention of over- indebtedness. In case of payment default, the creditor shall take the responsibility if its decision is based on a poor quality assessment of the consumer’s creditworthiness and suitability of the credit agreement. The costs of irresponsible lending shall be borne by the creditor.
Amendment 227 #
Proposal for a directive
Article 14 – paragraph 1 b (new)
Article 14 – paragraph 1 b (new)
1b. Where applicable, Member States shall ensure that when loan to value ratio is set, the evaluation of the value of the property used to secure the credit agreement is properly made. Creditors shall communicate all assessments and potential doubts they detect on the value of a property. Member States shall ensure that property assessment is provided by independent and recognized parties. If the evaluation of the value of the property was not made properly, a court may declare that the debt shall be fully annulled after repossession.
Amendment 240 #
Proposal for a directive
Article 14 – paragraph 4
Article 14 – paragraph 4
4. Further to assessing a consumer's creditworthiness, Member States shall ensure that creditors and credit intermediaries obtain the necessary information regarding the consumer's personal and financial situation, his preferences and objectives and consider a sufficiently large number of credit agreements from their product range in order to identify products that are not unsuitable for the consumerin the consumer's best interests given his needs, financial situation and personal circumstances. Such considerations shall be based on information that is up to date at that moment in time and on reasonable assumptions as to the consumer's situation over the term of the proposed credit agreement. Member States shall further ensure that any information request is restricted to the needs of creditworthiness assessment and that the data gathered in this context is not used for other purposes. Consumer shall have full access to any data related to his personal situation and will have the possibility to correct them where needed.
Amendment 247 #
Proposal for a directive
Article 16 – paragraph 1
Article 16 – paragraph 1
1. Each Member State shall ensure non- discriminatory access for all creditors to databases used in that Member State for assessing the creditworthiness of consumers and for monitoring consumers' compliance with the credit obligations over the life of the credit agreement. Such databases comprise databases operated by private credit bureaux or credit reference agencies and public credit registers. At cross-border level, only negative credit data, including information of absence of negative credit data, may be exchanged.
Amendment 250 #
Proposal for a directive
Article 16 – paragraph 2 – subparagraph 1
Article 16 – paragraph 2 – subparagraph 1
Powers are delegated to the Commission in accordance with Article 26 and subject to the conditions of Articles 27 and 28, to define uniform credit registration criteria of negative credit data and data processing conditions to be applied to the databases referred to in paragraph 1 of this Article.
Amendment 251 #
Proposal for a directive
Article 16 – paragraph 4 a (new)
Article 16 – paragraph 4 a (new)
4a. Member States shall ensure that decisions taken by the authorities in charge of data protection or courts of the home Member State of the consumer or by those authorities or courts in other Member States where data has been originated on a consumer are to be respected and enforced in any other Member State in the same way and without necessity for the consumer to start further administrative or judicial proceedings. Such decisions include but are not restricted to cases of wrong or wrongly attributed data, irregularly collected data, irregular assumptions, disputed data and any of the resulting actions including deletion, correction, commenting or barring of the use of that data. Member States shall ensure that consumers are to be informed of any cross-border exchanged data on them. Upon correction of data consumers are entitled to a reassessment of their creditworthiness and subsequent adjustment of their credit agreements as well as compensation of further damages arising of it.
Amendment 252 #
Proposal for a directive
Article 17 – paragraph 1
Article 17 – paragraph 1
1. For the purposes of this Directive, ‘'independent home loan advice’' constitutes a separate service from the granting of a credit. Such a service can only be marketed as independent home loan advice when the remuneration of the individual providing the service is transparent to the consumer and if there are no conflicts of interest with the consumer. Home loans advisers can only describe themselves as independent if they consider the whole of the market.
Amendment 257 #
Proposal for a directive
Article 17 – paragraph 2 – point b a (new)
Article 17 – paragraph 2 – point b a (new)
(ba) independent home loan advice provided by creditors and intermediaries shall be documented to the consumer.
Amendment 263 #
Proposal for a directive
Article 18 – paragraph 2 – subparagraph 1
Article 18 – paragraph 2 – subparagraph 1
Member States mayshall provide that the exercise of the right referred to in paragraph 1 is subject to certain conditions. Such conditions may include time limitations on the exercise of the right, different treatment depending on the type of the borrowing rate, or restrictions with regardfollowing principles are complied within their market: a) the consumer is entitled to repay at any time. b) fees for early repayment are not allowed. Member states may cap the amount of repayment compensation or exclude compensation in general according to the specificities of their home loan market. c) in the event that the compensation is not already fixed or capped on a lower level, the compensation is to thbe circumstances under which the right may be exercised. Member States may also provide that the creditor should be entitled to fair and objectively justified compensation for potential costs directly linked to early repayment of the credit. In any event, if the early repayment falls within a period for which the borrowing rate is fixed, exercise of the right may be made subject to the existence of a special interest on the part of the consumer. alculated by a duly defined and transparent method. Repaying consumers shall be compensated in case the early repayment takes place at the time market rates are in favour of the creditor. d) consumers are informed about their right to early repay and the amount of the expected compensation already at the pre- contractual stage according to the national specificities. e) variable rate contracts will not allow for early repayment compensations. f) early repayment of contracts with fixed rates is allowed without any compensation to the end of a fixed period. Member States are allowed to set maximum durations of fixed periods. g) in the case of credit refinancing with another creditor, potential fees paid for mortgage registrations will be limited or excluded. h) contracts may foresee further options to prepay without compensation.
Amendment 283 #
Proposal for a directive
Annex I – Section II – point j
Annex I – Section II – point j
(j) For credit agreements for which a fixed borrowing rate is agreed in relation to the initial period, at the end of which a new borrowing rate is determined and subsequently periodically adjusted according to an agreed indicator, the calculation of the annual percentage rate shall be based on the assumption that, at the end of the fixed borrowing rate period, the borrowing rate is the same as at the time of calculating the annual percentage rate, based on the value of the agreed indicator at that time. For credit agreements with a fixed borrowing rate of at least an initial period of five years and especially where a new fixed rate agreement is planned to proceed the agreement and variable conditions are only agreed on to prepare for the case that a new fixed deal has not yet been agreed on, only the initial fixed borrowing rate is to be taken into account.
Amendment 290 #
Proposal for a directive
Annex II – Part A - ESIS Model - point 6 – paragraph 7
Annex II – Part A - ESIS Model - point 6 – paragraph 7
(Where applicable) [Warning on the variability of the instalments and different scenarios depending of the evolution on the interest rate]
Amendment 291 #
Proposal for a directive
Annex II – Part A - ESIS Model - point 7 – paragraph 7
Annex II – Part A - ESIS Model - point 7 – paragraph 7
Please make sure that you are aware of all other taxes and costs (e.g. notary fees) associated with this loannote the following costs associated with this loan: [Notary fees] [Registration fees] [Valuation fees] [Taxes applicable according to national legislation] (Where applicable) [Any other costs related to obligations associated to this loan according to national law)] (where applicable) [Fees for any other services contracted with the creditor (such as fees for the maintenance of an account, insurance, etc)].
Amendment 292 #
Proposal for a directive
Annex II – Part A - ESIS Model - point 8 – paragraph 1
Annex II – Part A - ESIS Model - point 8 – paragraph 1
Amendment 296 #
Proposal for a directive
Annex II – Part B - Section 6 - point 4
Annex II – Part B - Section 6 - point 4
(4) Where the interest rate is subject to revision and the amount of the instalment after each revision is unknown, the creditor may indicate in the repayment table the same instalment amount for the whole credit duration. In such a case, the creditor shall draw that fact to the attention of the borrowconsumer by visually differentiating the amounts which are known from the hypothetical ones (e.g. using a different font, borders or shading). In addition, a clearly legible text shall explain for which periods the amounts represented in the table may vary and why. The creditor shall also include: (1a) where relevant, the applicable caps and floors; (2b) an example of how the amount of the instalment would vary where the interest rate increases or decreases by 1 % or by a higher percentage, where this is more realistic given the magnitude of normal changes to the interest rate; and (3c) where there is a cap, the instalment amount in the worst- case scenario or, where there is no cap, an illustrative worst-case scenario which may be further specified by delegated act.
Amendment 297 #
Proposal for a directive
Annex II– Part B - Section 7 - point 2
Annex II– Part B - Section 7 - point 2
(2) The creditor shall also provide a disaggregated list of each of the costs by category, indicating their amount, to whom they are to be paid and at what moment. Where the amount is not known, the creditor shall provide a possible range or an indication of how the amount will be calculated.