European Parliament votes for better deal on loans

3.16.25pm UTC (GMT +0000) Fri 18th Jan 2008

The European Parliament has voted in favour of a directive that will lead to common rules on consumer credit throughout Europe. This will improve customer protection and boost competition, driving down the cost of personal loans for the EU's 490 million citizens.

For seven years the European Union has been struggling to arrive at harmonised regulation for cross-border consumer lending through the adoption of the Directive on Consumer Credit. In relation to this Europe-wide law, the European Parliament has joint lawmaking powers with the national governments (so-called co-decision).

London Lib Dem MEP Baroness Sarah Ludford, said:

"Most people in Britain use consumer loans to make big purchases like a new washing machine, new kitchen or car. This new EU law will not only make loans safer, it will also make them more competitive as price comparison will be easy."

"These new rules are timely, coinciding with a global credit crisis. Especially in the UK, where we have the highest level of consumer debt in Europe, and the government has not resolved the Northern Rock collapse, sensible rules on loans are vital and Europe is helping inject security."