DRAFT REPORT on the proposal for a European Parliament and Council directive on the harmonisation of the laws, regulations and administrative provisions of the Member States concerning credit for consumers
    (COM(2002) 443 – C5‑0420/2002 – 2002/0222 (COD))

    23 September 2003 - ***I

    Committee on Legal Affairs and the Internal Market
    Rapporteur: Joachim Wuermeling
    Rev
    1

    PROCEDURAL PAGE

    By letter of 12 September 2002 the Commission submitted to Parliament, pursuant to Articles 251(2) and 95 of the EC Treaty, the proposal for a European Parliament and Council directive on the harmonisation of the laws, regulations and administrative provisions of the Member States concerning credit for consumers (COM(2002) 443 – 2002/0222(COD)).

    At the sitting of 23 September 2002 the President of Parliament announced that he had referred the proposal to the Committee on Legal Affairs and the Internal Market as the committee responsible and to the Committee on Economic and Monetary Affairs and the Committee on the Environment, Public Health and Consumer Policy for their opinions (C5‑0420/2002).

    The Committee on Legal Affairs and the Internal Market had appointed Joachim Wuermeling rapporteur at its meeting of 10 July 2001.

    The committee considered the Commission proposal and draft report at its meetings of 3 December 2002, 8 July 2002 and 10 and 11 September 2003.

    At the meeting of 10 September 2003, the committee decided to vote on the Commission proposal as a whole the following day.

    At the meeting of 11 September it rejected the Commission proposal by 19 votes to 0, with 4 abstentions. It then adopted the draft legislative resolution by 16 votes to 3, with 1 abstention.

    The following were present for the vote: Willi Rothley (acting chairman), Joachim Wuermeling (rapporteur), Pervenche Berès (draftsman of the opinion of the Committee on Economic and Monetary Affairs, and for François Zimeray), Ward Beysen, Brian Crowley, Willy C.E.H. De Clercq, (for Diana Wallis), Bert Doorn, Janelly Fourtou, Marie-Françoise Garaud, Evelyne Gebhardt, José María Gil-Robles Gil-Delgado, Malcolm Harbour, Lord Inglewood, Piia-Noora Kauppi (for Paolo Bartolozzi), Kurt Lechner, Klaus-Heiner Lehne, Sir Neil MacCormick, Toine Manders, Hans-Peter Mayer (for Giuseppe Gargani), Arlene McCarthy, Manuel Medina Ortega, Angelika Niebler (for Anne-Marie Schaffner), Marcelino Oreja Arburúa (for Stefano Zappalà), Béatrice Patrie (for Maria Berger), Marianne L.P. Thyssen, Phillip Whitehead (for Bill Miller) and Rainer Wieland.

    In the light of the decision of the Committee on Legal Affairs and the Internal Market, the Committee on Economic and Monetary Affairs and the Committee on the Environment, Public Health and Consumer Policy were not in a position to deliver opinions.

    The report was tabled on 23 September 2003.

    DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

    on the proposal for a European Parliament and Council directive on the harmonisation of the laws, regulations and administrative provisions of the Member States concerning credit for consumers
    (COM(2002) 443 – C5‑0420/2002 – 2002/0222(COD))

    (Codecision procedure: first reading)

    The European Parliament,

    –   having regard to the Commission proposal to the European Parliament and the Council (COM(2002) 443)[1],

    –   having regard to Articles 251(2) and 95 of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C5‑0420/2002),

    –   having regard to Rule 67 of its Rules of Procedure,

    –   having regard to the report of the Committee on Legal Affairs and the Internal Market (A5‑0310/2003),

    1.   Rejects the Commission proposal;

    2.   Calls on the Commission to withdraw its proposal and take, without delay, appropriate steps together with Parliament to submit a new proposal;

    3.   Instructs its President to forward its position to the Council and Commission.

    • [1] OJ C 331E, {31/12/2002}31.12.2002, p. 200.

    EXPLANATORY STATEMENT

    The Commission proposal amending the current directive on consumer credit (87/102/EEC) has met with widespread criticism from the European Parliament. Consumer protection organisations and banking, trade and business associations also rejected the proposal – not all of them for the same reasons – at a hearing in the Committee on Legal Affairs and the Internal Market on 29 April 2003.

    It became clear that the proposal had been drafted and adopted without adequate thought being given to its effects. In particular, too little attention had been given to providing access to all groups of consumers, including those in disadvantaged social groups, and to its effects on interest levels and the burden of bureaucracy. It was also incompletely coordinated with other existing and planned European provisions such as the Data Protection Directive, the law on fair trading and Basle II. The Commission had clearly given no thought to the practicability of the directive in the candidate countries.

    The proposal therefore needs to be thoroughly reworked, in order to prevent significant deleterious effects on the consumer credit business in Europe.

    The Commission has since acknowledged, and notified Parliament by letter from a Director-General, that it already considers the proposal to require modification on 13 points. This means that change is needed on practically every important point which the Commission intended to amend in the already existing directive. For example, the Commission is considering a completely new regime for small loans, the inclusion of an entirely new field of business in the form of mortgage loans, the inclusion of provisions on advertising, abolition of the rules on door-to-door selling, a complete reworking of the provisions on databanks and the inclusion of obligations for the consumer. In other words in the Commission proposal would be completely re-drafted in detail from the bottom up. It will be impossible for Parliament to give its opinion on all this if it is able to make amendments only to the old text. It is unreasonable to expect Parliament to make amendments to a text which has already become obsolete.

    The Commission's monopoly on initiating legislation implies a duty to prepare legislative texts carefully, particularly for an area of business in which millions of contracts are concluded daily. The Parliament cannot regard it as its task to re-draft every part of a proposal simply because the Commission has not met its obligations regarding proper preparation.

    Parliament and the Commission have stressed on many occasions the need to improve the quality of legislation. In fact, an inter-institutional agreement on this very matter has been adopted only in the last few weeks. The legislative bodies, in their respective roles, must do justice to these high demands.

    Since the Commission refuses to submit an updated proposal, I have found it necessary to employ the rarely-used procedure under Rule 67 whereby Parliament may call on the Commission to withdraw its proposal. If the Commission then submits a new proposal, discussion in the committees can continue. If it refuses to do so, the committees will continue to discuss the original text. This interim procedure does not in any way affect the full involvement of the committees asked for their opinions, since discussions in those committees will be continued at any event.

    Rejection by Parliament does not mean that Parliament does not wish for any amendments to the existing directive. On the contrary, adjustments must be made to take account of new developments in the markets, and obstacles to the internal market which have recently arisen must be overcome even though the underlying design of the existing directive has proved its value.