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 Since its formation, ACCIS has actively supported, as one of its main aims, the development of the common European market. High on its agenda at the moment are the Mortgages Directive, the Retail Financial Services Directive, cross-border database access and increased regulation for its members and clients.
ACCIS members are the link between borrowers and lenders. While a single market for credit may be the European Commission’s aim, we have to be aware that credit registers are neither the problem nor the solution, but just part of a bigger challenge.
Across the 27 Members States, there are significant differences in terms of market dynamics, size and maturity, and attitude to credit and house price growth. We have learnt the lessons of a ‘one size fits all’ approach during the early drafts of the Consumer Credit Directive, and this should not be repeated. There should be a premium of regulatory flexibility, if regulation was required in the first place - and that is highly debatable.
ACCIS believes that the Commission should assess the impacts of further regulation on the financial services sector. To over-regulate a sector critical to macro EU and micro Member State economies would be counter-productive and we have urged the Commission to assess the constraints and structural barriers at Members State level, with the aim of making it easier for new lenders to enter a market, thus creating a more level playing field.
Considering the legal perspective, lenders are faced with issues surrounding collections, enforcement and legal proceedings. They need to be operating ‘in-country’ to avoid incurring potentially significant risk, which in itself would result in less choice for consumers and higher prices to cover this exposure.
"We have urged the Commission to assess the constraints and structural barriers at Members State level, with the aim of making it easier for new lenders to enter a market, thus creating a more level playing field..."
We also need to differentiate between cross-border lending and consumer mobility. A consumer moving permanently or temporarily to live and work in another Member State would need to bring their credit history with them - something that should be reviewed with the ever-increasing movement between Member States.
Another challenge for the Commission is that when making lending decisions, lenders look at risk, affordability and possible fraud. In the case of the latter – a multi million euro issue – it is often not possible for lenders to share data in the same country, let alone across borders. 70% of ACCIS members reported difficulties in passing credit data cross-border due to legal constraints (source: ACCIS Member Survey 2007). However, although data sharing should be encouraged, there are diverse challenges within Member States, not least of which are differing approaches to interpreting the use of personal data under the Data Protection Directive.
Finally, the Commission has already confirmed that it will undertake a full impact study on a single European market for credit. This will enable us all to understand: ‘Where is the demand?’; ‘What are the real benefits?’; ‘What will it cost?’ and ‘Will it really give consumers more choice and access to cheaper credit?’
ACCIS is looking forward to taking a leading role in the Commission’s ‘Expert Group’, which will start to look at these issues in the context of its Retail Financial Services Green Paper during early 2008.
Mike Bradford
President
Association of Consumer Credit Information Suppliers (ACCIS)
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