EBA欧洲银行-BSG-response-to-Consultation-Paper-28EBA-CP-2014-4229-07-February-2015_6页_525kb

EBA Banking Stakeholder Group Consultation Summary on EBA/CP/2014/42

Core Content

The EBA Banking Stakeholder Group (BSG) has provided detailed feedback on the Draft Guidelines on creditworthiness assessment under Directive 2014/17/EU (MCD). These guidelines aim to enhance transparency in the consumer lending market while ensuring strong consumer protection by promoting sustainable lending practices and financial inclusion.

The MCD, adopted in February 2014, requires Member States to transpose it into national law by March 2016. It mandates that creditors perform a thorough creditworthiness assessment before concluding a credit agreement, based on the consumer's income, expenses, and other financial and economic circumstances. The guidelines are based on the FSB’s 2012 underwriting practices and the EBA’s 2013 opinion on handling borrowers in payment difficulties.

Main Views and Key Comments

General Support

The BSG generally supports the initiative to convert the EBA Opinion into guidelines, as it:

• Provides a broader scope than the original opinion, covering creditworthiness assessment more generally.
• Adds more detailed specifications to the provisions outlined in Articles 18 and 20 of the MCD.
• Builds on established good practices from various jurisdictions.

Areas of Concern

The BSG highlights several issues in the guidelines that may be difficult to implement:

1. Provision 1.2 and 1.3

   • These provisions require income verification from "sources independent of the consumer" and "third party verification".
   • The current wording is unclear on what constitutes an independent source or third-party documentation.
   • BSG suggests that a copy of a pay slip or a declaration of income tax should be sufficient.

2. Provision 3

   • It should consider the possibility that consumers may intentionally provide misleading or euphemistic information to obtain more favorable credit terms.

3. Provision 4.2

   • This provision requires creditors to review their creditworthiness assessment processes at "regular intervals" and maintain up-to-date records.
   • BSG raises concerns that this could be interpreted as a requirement to regularly update borrower information, which may be burdensome and unnecessary.
   • The provision could be problematic due to:
     • The difficulty of requesting annual updates on income and other financial data.
     • The administrative burden on credit institutions.
     • The potential overreach beyond the MCD's requirements.

4. Provision 4.3

   • The creditor must consider factors like other servicing obligations and evidence of delinquency.
   • BSG points out that obtaining information on servicing obligations is challenging in some countries (e.g., France) due to the lack of a centralized register.
   • For evidence of delinquency, BSG recommends removing the requirement to provide criminal records, as it may conflict with data protection and be discriminatory.

5. Provision 6.1

   • This provision is redundant with Provision 4.4, which already addresses reduced income due to retirement.
   • Factors like increased benchmark interest rates and balloon payments should be included under Provision 4.3, as they relate to the credit structure.

Additional Recommendations

The BSG also suggests the following additional requirements:

1. Clarify Responsibility and Sanctions

   • The guidelines should specify who is responsible for ensuring compliance and outline potential sanctions for non-compliance, especially in cases where poor credit decisions lead to harm.

2. Include Verification of Expenses

   • Provision 1.1 should include a verification of expenses, as required under Article 20.1 of the MCD.

3. Retain Expense Documentation

   • Provision 2.2 should also include the retention of expense-related information, and copies of account extracts should be sufficient.

Conclusion

The BSG's feedback reflects a balanced approach, supporting the development of the guidelines while emphasizing the need for clarity, proportionality, and practicality in their implementation. Their recommendations aim to align the guidelines more closely with real-world banking operations and regulatory expectations.