A Guide to Financial Regulation for Fintech Entrepreneurs

SHEET 14Mortgage Credit Directive

Mortgage Credit Directive—The regulation dealing with consumer mortgage credit, in particular its marketing, the calculation of APRs, and the requirement to perform an income‐based credit assessment

Summary

In many jurisdictions, mortgage lenders—here referred to as creditors—are already subject to regulation, so the main focus in this directive is on credit intermediaries and their appointed representatives. It also establishes an authorisation and regulation requirement for non‐bank mortgage lenders.

The directive defines the European Standardised Information Sheet (ESIS), which is the key informative document that consumers must receive before entering into a credit agreement. It also establishes some more rules on pre‐contractual information, use of credit databases, foreign currency and variable loans, and arrears and foreclosure.

Relevance for Fintech Companies

This directive is relevant for all Fintech companies operating on the consumer mortgage space, be it lenders, intermediaries, or advisors.

References

• Directive 2014/17/EU (MCD)
• Directive 2008/48/EC (CCRD)
• Directive 2003/25/EC (UCPD)

The Mortgage Credit Directive is 2014/17/EU. A related and very similar directive dealing with consumer credit other than mortgage credit is the Consumer Credit Directive 2008/48/EC.

14.1 Definition and Scope

This directive deals with consumer mortgage credit regulating lenders, intermediaries, and advisors in this space (Art 1). It does ...