Volume 8, Issue 2, June 2018 Juridical Tribune 565
assessment (debtors´ potential solvency) and actions following breach of mortgage
credit agreement (reasonable tolerance towards debtors´ payment difficulties).
The historical context of the directive is important since it explains some of
the values behind European harmonization. Following the financial, banking,
economic and euro-crisis from 2008, the attitude of the EU towards financial markets
has evolved from broad supervision and self-regulation towards greater control of
risks. In a parallel way, the new Directive inaugurates somehow a shift towards a
new paradigm of “responsible lending” instead of just requiring the provision of due
information. The two policy changes indicated above are important for two reasons:
1) they have a direct effect on consumer access to financial services and credit and
2) they determine the level and depth of consumer protection assured at European
level. These issues will be covered more in depth later on.
Taking this context into account, this article intends to provide an overview
of the directive and review in a critical way some of the most important issues. It is
structured as follows. The second section gives a brief description of the paradigms
in the field of European consumer law, the main key points of the directive and some
other influential legislation in European banking and financial law. Section 3
discusses the incorporation of the Directive into the national legal systems, both in
the EU and the EEA. Sections 4 covers the classic tension between the goal of
attaining a European single market while a high level of consumer protection must
be guaranteed and the combined approach of EU institutions through public/private
law. Section 5 explains the scope of the European legislation on mortgage credit.
Section 6 focuses on the substance of the directive and its most novel provisions,
duties imposed on financial institutions and consumer rights. Section 7 summarizes
other complementary issues. Section 8 makes a critical assessment of the MCD and
its interaction with national laws and considers some important issues to be dealt
with de lege ferenda in the field of mortgage credit and consumer protection. Last
but not least, Section 9 concludes with the most important question that maybe
cannot be answered now in a straightforward way, the question whether this directive
will protect consumers when the next economic/financial crisis inevitably arrive.
Some final thoughts are expressed in the conclusions.
2. The new Directive 2014/17/EU on mortgage credit: key preliminary
Before diving into more specific issues it is important to get an overview of
this legislation. The Mortgage Credit Directive represents the first attempt of the
European institutions to regulate this market. It applies to all loans made to
consumers for the purpose of buying a property (usually home but not only),
including loans that are guaranteed by a mortgage or by another comparable security,
guarantee or lien. It belongs therefore to the area of European consumer law