Finance & Leasing AssociationAs the deadline approaches for the conclusion of equivalence arrangements between the UK and Brussels, the sense is that closure will not be reached before this month is out. The latest offer is a memorandum of understanding which the EU already has in place with the US. The impetus for this development has come from the European Financial Services Commissioner Mairead McGuinness who replaced Valdis Dombrovskis as part of a reshuffle in the Autumn.
McGuinness has by all accounts adopted a far more ‘hands-on’ approach than her predecessor as befits her past as a senior MEP renowned as an effective campaigner and before that a journalist. In her public hearing she pledged to put consumers’ interests at the heart of financial services policy. Drawing on Ireland’s experience during the financial crisis, she has published plans to create a secondary market for Covid-related bad debt to free up capital for financial institutions to lend to households and businesses.
More recently, McGuinness has led the European Commission’s efforts to put Covid-related forbearance measures on a longer term footing so that viable borrowers will continue to be supported by lenders. This would be done by extending existing credit moratoria guidelines. In a sign that the Commission’s traditionally disparate Directorates-General (DGs) will be more aligned, this workstream will be coordinated with the Consumer Protection DG’s wish to improve access to debt advice across the EU, which is likely to be addressed under the review of the Consumer Credit Directive (CCD).
Before the Summer, the Commission is expected to propose a revised CCD to bring within scope new products such as buy-now-pay-later; introduce more stringent creditworthiness provisions; and make it more fit-for-purpose not only in terms of consumers borrowing online but also to pre-empt future personal finance difficulties on the scale brought about by Covid-19. The voice of the consumer is driving the Commission’s policy agenda.
Published 26 Mar 2021
