FINANCIAL SERVICES : COUNCIL ADOPTS DIRECTIVE ON MORTGAGE CREDITS.

The member states' finance ministers gave the green light, on 28 January, to a compromise drawn up with the European Parliament on rules on mortgage credits. MEPs had already formally approved the compromise during Parliament's plenary session last December. The Ecofin Council's approval is therefore the last stage in the process of adopting the draft directive, which regulates at European level mortgage loan contracts for residential property. The Czech Republic, Luxembourg and Lithuania abstained for various reasons(1).

Once the directive is in force, the member states will have two years to transpose it into their national laws.

The new rules aim to better protect consumers, as well as curb irresponsible lending, a practice revealed by the global financial crisis of 2008. Consumers signed up for inappropriate and even dangerous loans, and then found themselves incapable of making the repayments, leading to arrears and sometimes the loss of their homes.

The directive provides measures to better inform borrowers, as well as an obligatory cooling-off period of seven days before signing a loan contract. Rules are also introduced to improve solvency assessments for borrowers. Also - and no less importantly - borrowers should have the right to pay off their loan before the end of the contract, under certain conditions decided by member states, and measures are included that aim to better protect borrowers in case of payment defaults on their loans.

(1) The member states' declarations are available at

Financial servicesCouncil adopts directive on mortgage creditsBy Manon MalhA[umlaut]reThe member states' finance ministers gave the green light, on 28 January, to a compromise drawn up with the European Parliament on rules on mortgage credits. MEPs had already formally approved the compromise during Parliament's plenary session last December. The Ecofin Council's...