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11 OPINION 7.12.2023 Catherine Formosa & Kelly Cini Catherine Formosa is a Senior Associate and Kelly Cini is a Trainee Advocate, both within Ganado Advocates' Banking & Finance Team. The Consumer Credit Directive revamped - Part 2 E nforcement proceedings should be seen as a last resort for both cred- itors and consumers and against this backdrop, the CCD II requires cred- itors to exercise reasonable forbearance measures and make attempts to resolve the situation through other means. CCD II proposes that forbearance may include extending the term of the credit agree- ment, changing the type of the credit agreement, partially or totally deferring payments of instalments for a period, reducing the borrowing rate or the total or partial refinancing of the credit agree- ment. In addition, Member States may allow creditors to impose charges on consum- ers who default on payment and in do- ing so they may also require that such charges are no greater than necessary to compensate the creditor for costs which it has incurred due to the default. Additionally, the national legislator is also given discretion to decide whether to allow creditors to impose additional charges on the consumer in the event of default. However, if such a practice is allowed, Member States must necessarily put in place caps on those charges. Although this remains an area where leeway is given to the Member States to shape their laws relating to arrears, default and forbearance and creditors also have considerable discretion, creditors will arguably need to revisit their forbear- ance policies as well as their practices vis-à-vis a defaulting consumer. Measures against costly lending Member States are obliged to intro- duce measures aimed to effectively pro- tect consumers from excessively high borrowing rates, annual percentage rates of charge ("APR") or total costs of credit. the Revised Directive proposes caps on borrowing rates, caps on APRs as well as prohibitions or limitations re- garding specific charges or fees as ways to achieve this on the lines of what is al- ready happening in other jurisdictions. Notably, this is left to the discretion of the Member States and therefore cred- itors and consumers alike will need to await the approach which will be taken by the local legislator on such a sensi- tive matter. Additional consumer protection measures A Prohibition of Discrimination: Creditors must not discriminate against consumers legally resident in the Union on ground of their nationality or place of residence, or on other grounds of discrimination set out in the Charter of Fundamental Rights of the European Union. is does not exclude the possi- bility of offering different conditions for accessing credit where those divergent conditions are duly justified by objec- tive criteria. Advertising: e rules on advertising are being considerably broadened by CCD II and there is clear focus on how these rules should apply in the context of digital advertising. For instance, the preamble to CCD II makes it clear that the standard information required in an advert should be shown upfront and saliently, in a clear way and in an en- gaging format and adapted to take into account the technical constraints of certain media such as mobile telephone screens. Temporary promotional condi- tions, such as a 'teaser' rate with a lower borrowing rate for the initial months of the credit agreement, should be clearly identified as such. Consumers should be able to see all essential information at a glance, even when they watch it on the screen of a mobile telephone. A Prohibition of Tying Practices: Ty- ing practices where a creditor sells a credit agreement in a package with oth- er distinct financial products or services and does not make the credit available to the consumer separately are, subject to certain exceptions, prohibited by the Revised Directive. "e Right to be Forgotten" for Cancer Survivors: Life insurers will be required not to use personal data concerning consumers' cancer diagnoses for the purpose of an insurance policy related to a credit agreement after a period fol- lowing the end of the consumer's med- ical treatment. Such period (which is to be set by the Member State) shall not exceed 15 years. Next steps and concluding remarks e Revised Directive was published in the Official Journal of the European Union on the 30 October 2023 and came into force on the 19 November 2023. Member States have until 20 November 2025 to transpose CCD II, with the rela- tive national measures to apply from 20 November 2026. While the Revised Di- rective goes a long way and introduces a wide array of new measures aimed at protecting consumers, it is equally true that the extent of its effectiveness will depend to a considerable extent on how certain discretions will be implemented by each of the Member States. A broader scope of application, stricter rules on the creditworthiness assessment, tighter advertising and measures against costly lending are amongst the salient aspects of the Revised Directive Member States are obliged to introduce measures aimed to effectively protect consumers from excessively high borrowing rates, annual percentage rates of charge or total costs of credit

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