The Consumer Credit Directive has been implemented in Ireland by the European Communities (Consumer Credit Agreements) Regulations 2010. The broad aim of the Directive is to harmonise laws governing consumer credit across the EU.
The Consumer Credit Act 1995 (as amended) and the Consumer Protection Code 2006 are currently the main strands of consumer protection in relation to lending in Ireland. While the Regulations cover some of the same ground, their scope does not extend to all areas dealt with by the Act and the Code. The Regulations have the same understanding of what constitutes a “consumer” as the Act, being “a natural person who is acting …for purposes outside his or her trade, business or profession”. However although the Regulations apply to many lending arrangements, they exclude:
- credit agreements where the amounts involved are less than €200 or more than €75,000;
- mortgage lending; and
- hire purchase and leasing agreements;
each of which are covered by the Act and Code. Certain other forms of agreement are also excluded by the Regulations.
The Regulations set out the following:
Preliminaries to Credit Agreement
- Obligations for creditors in relation to the content of any advertisement of credit;
- Obligations for creditors in respect of pre-contractual information to be provided to a consumer;
- Obligations for creditors to assess the credit-worthiness of consumers based on “sufficient information” (the Regulations do not provide detail on what constitutes sufficient information);
Credit Agreement
- Obligations on the standard information to be included in a credit agreement;
- A withdrawal right for consumers within 14 days of the credit agreement being concluded or, if later, the day on which the consumer receives the contractual terms and conditions;
- A right for the consumer to make early repayment of his obligations under a credit agreement and restrictions on the compensation he will have to pay to the creditor to do so; and
APR
- Detailed methodology of how APR is to be calculated.
It remains to be seen whether the Regulations will successfully interact with the Act and Code, resulting in a user-friendly regime for both creditors and consumers.
