INTRODUCTION

The European Union incorporated the responsible lending programme into legislation in an attempt to tackle the high levels of indebtedness resulting from the expansion in access to credit and new credit products and lending practices. It did so first, and rather timidly, into Directive 2008/48/EC of 23 April 2008 on Consumer Credit, and then more forcefully into Directive 2014/17/EC of 28 February 2014 on Credit Agreements for Consumers Relating to Residential Immovable Property. The aim was to ensure that professional lenders took consumer needs and interests into account throughout the entire duration of the credit agreement, which entailed both the need to enable consumers to make maximum savings (e.g. via early repayment without penalty) and to prevent borrowers from succumbing to the temptation to commit themselves to risky loan agreements. The expression ‘responsible lending’ is generally associated with good practices in the granting of credit (unfair practices in credit card approval and subprime mortgages would be clear examples of irresponsible practices to be tackled) and with the measures proposed to prevent over-indebtedness: e.g. transparency in the marketing of loans, creditworthiness assessment and the granting of a right of withdrawal. However, it also covers creditors’ obligation to show reasonable forbearance when claiming repayment, for example, by limiting default interest, preventing the abuse of acceleration clauses and seeking to avoid foreclosure actions being carried out before attempts have been made to negotiate with debtors.