24 Amendments of Burkhard BALZ related to 2011/0062(COD)
Amendment 200 #
Proposal for a directive
Recital 14
Recital 14
(14) At the same time, it is important to take into consideration the specificities of credit agreements relating to residential immovable property which justify a differentiated approach. Given the nature and the possible consequences of a credit agreement relating to residential immovable property for the consumer, advertising materials and personalised pre-contractual information should include specific risk warnings, for instance about the nature and implications of taking out a security. Following what already existed as a voluntary approach by the industry concerning home loans, general pre- contractual information should be made available at all times in addition to the personalised pre-contractual information. Furthermore, a differentiated approach is justifiable in order to take into consideration the lessons learnt from the financial crisis in order to ensure that loan origination takes place in a sound manner. In this respect, the provisions on the creditworthiness assessment should be strengthened in comparison to consumer credit, mCreditworthiness should be assessed in accordance with Directive 2008/48/EC. More precise information should be provided by credit intermediaries on their status and relationship with the creditors in order to disclose potential conflicts of interest, and all actors involved in the origination of credit agreements relating to residential immovable property should be adequately authorised, registered and supervised.
Amendment 210 #
Proposal for a directive
Recital 16 a (new)
Recital 16 a (new)
(16a) The financial crisis has highlighted the importance of managing conflicts of interest in order to reduce the risks arising and to rebuild consumer confidence. It is therefore appropriate, in accordance with Directive 2010/76 of the European Parliament and of the Council of 24 November 2010, to regulate certain aspects of the remuneration of staff of creditors and credit intermediaries.
Amendment 232 #
Proposal for a directive
Recital 25
Recital 25
(25) A negative creditworthiness assessment should indicate to the creditor that the consumer is unable to afford the credit and as a consequence, the creditor should not grant the credit. Such a negative outcome may derive from a wide range of reasons, including but not limited to the consultation of a database or a negative credit score. Member States may put in place adequate mechanisms for compensation if an adverse decision not to grant a loan was taken by a credit institution on the basis of an inaccurate credit report provided by a credit register. A positive creditworthiness assessment should not constitute an obligation for the creditor to provide credit.
Amendment 246 #
Proposal for a directive
Recital 31 a (new)
Recital 31 a (new)
(31a) Member States may prohibit creditors or credit intermediaries from tying by making the offer of a credit agreement conditional upon the purchase of insurance or other financial products from a given provider specified by the creditor or credit intermediary except for the opening of a current account. Member States may also prohibit creditors or credit intermediaries from tying by making the offer of a credit agreement conditional upon the provision of services by appraisers, notaries, legal advisers or any other provider specified by the creditor or credit intermediary.
Amendment 251 #
Proposal for a directive
Recital 32
Recital 32
(32) A consumer’s ability to repay his credit prior to the expiry of his credit agreement may play an important role in promoting competition in the single market and the free movement of EU citizens. However, substantial differences exist between the national principles and conditions under which consumers have the ability to repay and the conditions under which such early repayment can take place. Whilst recognising the diversity in mortgage funding mechanisms and the range of products available, certain standards with regard to early repayment of credit are essential at Union level in order to ensure that consumers have the possibility to discharge their obligations before the date agreed in the credit agreement and the confidence to shop around for the best products to meet their needs. Member States should therefore ensure, either by legislation or by means of contractual clauses, that consumers have a statutory or contractual right to early repayment; nevertheless, while adhering to the principle that fixed interest periods, once agreed, are binding; Member States should be able to define the conditions for the exercise of such a right. These conditions may include time limitations on the exercise of the right, different treatment depending on the type of the borrowing rate, whether fixed or variable, restrictions with regard to the circumstances under which the right may be exercised. Member States could also provide that the creditor should be entitled to fair and objectively justified compensation for potential costs, including any loss of interest, 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. Such special interest may for example occur in case of divorce or unemployment. Where a Member State chooses to lay down such conditions, these should not make the exercise of the right excessively difficult or onerous for the consumer.
Amendment 254 #
Proposal for a directive
Recital 32 a (new)
Recital 32 a (new)
(32a) Member States may ensure that lenders allow borrowers to keep a credit agreement when moving house provided that the value of the new property is sufficient to serve as the collateral required by the credit agreement and when the conditions required to consider collaterals as equivalents referred to in paragraph 2 have been fulfilled. Member States may adopt the measures appropriate to ensure that where under national law a credit agreement related to a residential immovable property located in another Member State is considered as equivalent to a credit agreement related to a residential immovable property on its territory for the purposes of being pooled in financial instruments traded in secondary markets, they shall also be considered equivalent for the purpose of paragraph 1. In order to ensure consistent harmonisation of the right to portability, EBA shall draft guidelines to further specify the conditions required to consider collateral as equivalent in accordance with the first paragraph of this Article.
Amendment 258 #
Proposal for a directive
Recital 32 b (new)
Recital 32 b (new)
(32b) Member States may provide that where a credit agreement relates to a loan in a foreign currency, the consumer shall have the right to convert the loan into the currency of the Member State within a reasonable period. Member States may also provide that the creditor should be entitled to obtain fair and objectively justified compensation for potential costs directly linked to the exercise of the right but shall not allow creditors to impose a penalty arising from the exercise of the right.
Amendment 261 #
Proposal for a directive
Recital 32 c (new)
Recital 32 c (new)
(32c) Member States may ensure that creditors allow consumers to make payments which exceed the amount required by the amortisation structure of the loan contained in the credit agreement without penalty and thereby have the right to redeem in the future the payments scheduled according the amortisation structure up to the value by which they have previously exceeded the required amount.
Amendment 262 #
Proposal for a directive
Recital 32 d (new)
Recital 32 d (new)
(32d) Member States may ensure that, in order to cover risks of ageing or retirement, the parties to a credit agreement may agree to convert the credit agreement into a reverse mortgage or other credit agreement under which a sum of money is advanced or paid periodically to the consumer to allow access to equity in the residential immovable property and which will eventually be repaid from the sale of the residential immovable property.
Amendment 263 #
Proposal for a directive
Recital 32 e (new)
Recital 32 e (new)
(32e) Member States may provide that creditors may transfer credit agreements or portfolios of credit agreements to other financial institutions without the consent of the consumer as long as the loan conditions are not altered to the disadvantage of the consumer. This paragraph shall be without prejudice to Article 122a of Directive 2006/48/EC. Member States shall ensure that mortgages portfolios are transferable to a new lender without registration of a new mortgage deed for each loan in the transferred portfolio. Member States may also provide that consumers too have the right to transfer a credit agreement to a new creditor which is prepared to accept the transfer and which makes a binding offer to the consumer provided that: (a) the binding offer significantly improves the economic conditions for the consumer either by an improvement of at least 100 basis points in the interest rate or by an extension or reduction of more than a third in the length of the repayment period for the outstanding debt; (b) the creditor refuses to make a binding offer before the expiry of the offer made by the new creditor which at least matches the terms of the binding offer made by the new creditor; and (c) the creditor receives appropriate compensation where there is provision to that effect in the national law. Member States shall ensure in such cases that the compensation does not constitute a penalisation of the consumer and that once a credit agreement has been in force for five years the compensation shall not be higher than 1% of the outstanding debt.
Amendment 264 #
Proposal for a directive
Recital 32 f (new)
Recital 32 f (new)
(32f) Member States may allow the transfer from a borrower to a consumer of a credit agreement which would be within the scope of Article 2(1) if it were transferred to the consumer in parallel to the sale of a property on condition that the creditor has carried out a creditworthiness assessment of the consumer in accordance with Article 14 and has not concluded that there is a negative prospect for his ability to repay and has provided the consumer with a binding offer prior to the transfer of the credit agreement. Member States may prohibit developers from tying the sale of a projected or existing property by making it conditional upon the transfer to the consumer of a credit agreement which would be within the scope of Article 2(1) if it were transferred to the consumer.
Amendment 265 #
Proposal for a directive
Recital 32 g (new)
Recital 32 g (new)
(32g) Member States may ensure that creditors exercise reasonable forbearance and make diligent efforts to reach a negotiated solution before initiating foreclosure proceedings in relation to credit agreements. Member States may maintain or introduce requirements in relation to the process to be followed or the options which must be pursued prior to initiating foreclosure proceedings in relation to a property situated in their territory. In cases where the borrower has repaid a substantial part or the majority of the loan over a long period such options should include temporarily changing the contractual agreement between the creditor and the consumer. Member States may forbid penalties for default which are additional to the repayment of the outstanding portion of the loan where such default is the result of circumstances beyond the control of the borrower or where the penalty is not proportionate or is calculated taking into account the non-defaulted part of the loan. Member States may allow that the return of the collateral is sufficient to repay the loan at least where such a clause was expressly agreed by the parties to the credit agreement. Member States may ensure that where foreclosure proceedings are initiated the lender shall credit to the consumer as the value of the collateral a value at least as great as the most recent valuation carried out in conformity with the minimum requirements for the recognition of real estate collateral established in Annex VIII, part 2, point 8 of Directive 2006/48/EC. Where residential mortgage lenders have full recourse to a consumer’s assets after foreclosure proceedings are completed and outstanding debt remains, Member States shall ensure that seizure of wages, retirement pensions or equivalent distributions are limited so as to preserve a minimum income sufficient to maintain an adequate standard of living.
Amendment 266 #
Proposal for a directive
Recital 32 h (new)
Recital 32 h (new)
(32h) Member States may ensure that appraisers carrying out valuations of residential immovable property which are used to value the collateral in credit agreements are professionally competent. Member States may ensure that a public register of appraisers who are deemed professionally competent is established and regularly updated. Member States may ensure that appraisers who carry out valuations used by a creditor to value the collateral are sufficiently independent of the creditor, the borrower and, where applicable, the credit intermediary, to provide an objective and impartial valuation. Member States may specify further criteria which shall be used to determine the professional competence of appraisers. Such criteria shall not include a requirement for the appraiser to be established in their territory.
Amendment 271 #
Proposal for a directive
Recital 44
Recital 44
(44) The efficient functioning of this Directive will need to be reviewed, as will progress on the establishment of an internal market with a high level of consumer protection for credit agreements relating to residential immovable property. The Commission should therefore review the Directive five years after the deadline for its transposition. The review should include, among other things, an analysis of the evolution of the market for non-credit institutions providing credit agreements relating to residential immovable property and an assessment on the need for further measures, including a passport for such non-credit institutions, an examination of the necessity to introduce rights and obligations with regard to the post- contractual stage of credit agreements, and an assessment of whether an extension of the scope to include lending to small companies is warranted. In addition, the Commission should verify the necessity of measures taken by the Member States to support the education of consumers about responsible borrowing and debt management, in particular in relation to credit agreements.
Amendment 301 #
Proposal for a directive
Article 2 – paragraph 2 – point b a (new)
Article 2 – paragraph 2 – point b a (new)
(ba) credit agreements which relate to loans granted to a restricted public under a statutory provision with a purpose of general interest, free of interest or at an interest rate lower than those prevailing on the market.
Amendment 353 #
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 bestand takes into account the rights and interests of the consumer.
Amendment 357 #
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.
Amendment 363 #
Proposal for a directive
Article 5 – paragraph 2 a (new)
Article 5 – paragraph 2 a (new)
2a. Member States shall ensure that the remuneration of creditors' staff responsible for the assessment of creditworthiness or for the provision of advice is in accordance with the provisions of Directive 2010/76/EU of the European Parliament and of the Council of 24 November 2010.
Amendment 553 #
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 ofthe creditor assesses the consumer’s 's creditworthiness is conducted by the creditor, based on criteria 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/ECon the basis of sufficient information, where appropriate obtained from the consumer and, where necessary, on the basis of a consultation of the relevant database. Member States shall ensure that creditors establish appropriate processes to assess the creditworthiness of the consumer. These processes shall be reviewed at regular intervals and up-to-date records of those processes shall be maintained.
Amendment 569 #
Proposal for a directive
Article 14 – paragraph 2 – point a
Article 14 – paragraph 2 – point a
(a) Where the assessment of the consumer’s creditworthiness results in a negative prospect for his ability to repay the credit over the lifetime of the credit agreement, the creditor refuses creditmeet his contractual obligations under the credit agreement, the creditor, if he nevertheless grants the credit, supplies documentary evidence to show that he has done so and to support this decision.
Amendment 630 #
Proposal for a directive
Article 17 – paragraph 1
Article 17 – paragraph 1
1. For the purposes of this Directive, 'advice' constitutes a separate service from the granting of a credit. Such a service can only be marketed as advice when the remuneration of thA separate charge for advice can only be made if the consumer has been informed of the requirement to pay a charge iandividual providing the service of method used for its transparent to the consumercalculation.
Amendment 652 #
Proposal for a directive
Article 17 – paragraph 2 a (new)
Article 17 – paragraph 2 a (new)
2a. when giving advice, take the consumer's rights and interests into account.
Amendment 667 #
Proposal for a directive
Article 18 – paragraph 2 – subparagraph 1
Article 18 – paragraph 2 – subparagraph 1
Member States may 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 regard to the 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, including loss of interest, 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.
Amendment 678 #
Proposal for a directive
Article 18 – paragraph 2 – subparagraph 2
Article 18 – paragraph 2 – subparagraph 2
Where a Member State lays down such conditions, these shall not make the exercise of the consumer’s right referred to in paragraph 1 shall not be made excessively difficult or onerous for the consumerby conditions going beyond the parameters set out above.