The EU Continues to Legislate Uniform Criteria. It Now Regulates Credits for Border Consumption

22 February 2008

A directive (an EU legal rule) has been approved which, although it still must be adopted and incorporated in the legal systems of the EU member states before 2010, means another step towards unification and standardization of the EU rules. It affects non-mortgage loans of between 200 and 75,000 Euros.

This new rule is practical and interesting because:

1. It imposes a single method, EU wide, to calculate interests and charges for said credits.

2. It encourages cross-border loans.

3. It improves competition between European credit entities.

4. It sets common rules on the information which must be provided to loan/credit candidates before they take out the loan as well as establishes the data that must appear in the contract.

Bear in mind that there are currently excessive differences between average interest rates and percentages on offer in the Euro zone; from the Portuguese 12% to the Finnish 6% -in Spain it is 9.4%-.

Although it is to be expected that the majority of the member states will not assume or adopt this rule until 2009 or 2010, the unification of legal criteria is always in the citizens’ best interest in order to avoid discrimination, damages and doubts.

For further information, please contact Alex Ensesa Casulleras : aensesa@mmmm.es