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Consumer Credit Bulletin 01

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					      CONSUMER CREDIT
      BULLETIN EUROPE
       by Eurofinas, the voice of consumer credit providers in Europe

                                                                                                                                               01
                                                                                                                                           summer 2011


· FOCUS ON ·
                                                     WELCOME TO THE FIRST ISSUE OF THE
TOWARDS IMD 2
The European Commission is currently
                                                     CONSUMER CREDIT BULLETIN EUROPE
                                                     Dear Reader,
reviewing the Insurance Mediation Directive
(IMD) with the clear objective to move
                                                     Thank you for your interest in the first issue     Eurofinas, the voice of consumer credit
towards an IMD 2. The proposal for the
                                                     of the Consumer Credit Bulletin Europe. This       providers at European level, is ideally placed to
new directive is likely to be ready by the
                                                     newsletter represents the latest effort by         help you do just that.
end of 2011. Find out about the contem-
                                                     Eurofinas to bring Europe closer to the industry
plated changes that are of relevance to the
                                                     and aims at keeping you informed of the most       I hope you will find this newsletter useful and
consumer credit industry.
                                                     relevant European and international policy         would very much value your feedback on
                                        p.2
                                                     developments in the field of consumer credit.      this first issue.

INTERVIEW                                            The provision of retail financial services is      Happy reading,
                                                     being increasingly regulated at European
Bruno Salmon, Chairman of BNP Paribas
                                                     level. Keeping abreast of what is happening        Tanguy van de WERVE
Personal Finance shares his views on the chal-
                                                     in “Brussels” has become essential in order to     Director General
lenges and opportunities for the consumer
                                                     anticipate future regulatory changes and stay      t.vandewerve@eurofinas.org
credit industry going forward.
                                                     ahead of the curve.
                                           p.3


RESPONSIBLE LENDING                                    A FEW WORDS FROM PEDRO
The European Commission has recently
published a proposal for a directive on credit
agreements for residential property. Although
                                                       GUIJARRO, EUROFINAS’ CHAIRMAN
                                                        • At the time of my appointment as              I am most grateful to Bruno Salmon,
its scope is restricted to the provision of
                                                        Chairman of Eurofinas, I stressed the           Chairman of BNP Paribas Personal Finance
home loans, a number of points deserve the
                                                        importance of continuing to strengthen          for having accepted to contribute to this
consumer credit industry’s utmost attention.
                                                        the representative voice of the European        inaugural issue of the Consumer Credit
                                           p.5
                                                        consumer credit industry in Brussels and        Bulletin Europe by sharing some of his
                                                                                further afield. In      views on the challenges facing the industry.
RESULTS OF EUROFINAS                                                            order to do so, we
                                                                                have undertaken         These challenges will be discussed at length
STATISTICAL SURVEY ON                                                           a number of initia-     at the Annual Convention of the European
CONSUMER CREDIT                                                                 tives, and this         Consumer Credit Industry which will take
                                                                                newsletter is one       place in Vienna on 29 & 30 September.
According to a recent survey of Eurofinas
                                                                                more step towards       The Convention has become the reference
members, the European consumer credit
                                                                                raising the profile     event of the year for senior consumer credit
market stabilised in 2010 and the outlook
                                                                                and visibility of       professionals from across Europe and I look
for 2011 is more positive.
                                                                                Eurofinas.              forward to seeing you there.
                                      p.6




                                                                                                                             Mark
                                                                                                                             the date!
    A unique opportunity to reflect on where the industry is heading
    and meet your peers! Plan to attend and register here
                                                                                                                             29 & 30 Sept. 2011
                                                                                                                             Hotel Savoyen
    See page 8 for more information                                                                                          Vienna, Austria


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     CONSUMER CREDIT
     BULLETIN EUROPE

TOWARDS IMD 2
Practical thinking is key
• The European Commission is currently                 an insurance undertaking, or of another inter-
reviewing the Insurance Mediation Directive of         mediary that already meets the requirements,
December 2002 (IMD). It is expected that it will       should be subject to a different treatment than
make a proposal for a new Directive (IMD 2)            those which do not. Such a distinction already
towards the end of 2011.                               exists in IMD but needs to be reinforced in IMD 2
                                                       so that Member States cannot deviate from it.
IMD 2 has become a necessity in order to
remedy the many inconsistencies resulting              Consideration should also be given to i) the
from the diverging transposition and the gold-         fact that some intermediaries do not act as
plating of IMD at national level.                      independent advisers/brokers, ii) the level
                                                       of risks for consumers and iii) the nature
More fundamental changes are in the pipe-              and level of sophistication of the distributed
line however. The possible application of the          products. This is important as the regulatory
Directive to direct writers, the removal of existing   framework for insurance distribution can have
exemptions, the management of conflicts of             a direct impact on the availability of insur-
interest, and the provision of advice on insur-        ance products and coverage characteristics,
ance products were some of the other points            in particular when it comes to basic low risk
put to stakeholders in a recent consultation.          insurance products.

Eurofinas believes that an efficient, fair and         In addition, particular attention should
high-quality regulatory framework for insurance        be paid to the management of potential
intermediaries requires avoiding a one-size-           conflicts of interest, as the CEIOPS/EIOPA          Measures related to the management of
fits-all approach by adapting the statutory            (the European supervisor in charge of insur-        conflicts of interest should be based on the sole
requirements to the various distribution chan-         ance) did not sufficiently take into account        activity of the intermediary. Those interme-
nels used and the type of products distributed.        the insurance mediation sector’s operational        diaries that do not advise consumers and do
                                                       and economic reality in its November 2010           not receive any fees from them should not be
While a one-size-fits-all approach applying            recommendations. Eurofinas concurs with the         subject to stringent technical requirements.
irrespective of the types of intermediaries            Commission that insurance intermediaries
and products distributed is arguably attrac-           should act professionally and in line with their    Last but not least, the application of the IMD
tive from a theoretical viewpoint it would not         customers’ interests. A clear and transparent       framework to direct writers remains an open
create a real level playing field as the market        framework is beneficial for providers, interme-     question. If they were to be included in the
players are different and have different objec-        diaries, and their customers alike. However,        new IMD, would such an extension be a source
tives. A one-size-fits-all approach would              the proposal to disclose to the consumers the       of confusion? Would the Insurance Mediation
negate the diversity of market structures,             intermediaries’ remuneration will fall short        Directive then turn into an Insurance Directive?
distribution channels and insurance products.          of providing a proportionate and well-suited        We should know soon.
It would also probably fail to pass any propor-        regulatory response to the issues at stake.
tionality test (at least for those intermediaries
distributing simple, easy to understand, low
cost and short duration insurance products in
an ancillary capacity).

Distinguishing between the roles and respon-
                                                       GREEN LIGHT                                                       Finance and Leasing
                                                                                                                    The Association of Danish Finance Houses
sibilities of the consumer credit providers and
those of their point-of-sale partners (motor
                                                       FOR POSITIVE DATA
dealers, retailers) is particularly important in       • The Danish Data Protection Authority recently gave its green light for the establishment of a posi-
this context. Indeed those insurance interme-          tive credit database in Denmark. Finans og Leasing, the Danish member of Eurofinas, is currently
diaries acting under the full responsibility of        working on the database project. The database is expected to be operational as of early 2012.



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       CONSUMER CREDIT
       BULLETIN EUROPE

    interview
                                                      in order to remain competitive in an ever more

BRUNO SALMON                                          regulated environment.

                                                      Other challenges include adapting to
1. Mr. Salmon, tell us about yourself                 consumers’ new needs and expectations,
                                                      and becoming more innovative in order to
Since joining Cetelem in 1972 I have held a variety   remain attractive and be able to gain or regain
of positions within the group. I was successively     the confidence of consumers.
Head of Marketing, Head of Sales and Marketing in
France and Head of the French Network. Following      Technological progress in the fields of              BRUNO SALMON
the merger of Cetelem and UCB, I became Deputy        e-commerce and m-banking is a true opportu-          Chairman, BNP Paribas Personal Finance / President,
                                                                                                           Association Française des Sociétés Financières (ASF)
CEO and member of the Board of Directors of           nity for consumer credit providers.
BNP Paribas Personal Finance.                                                                              I fear that specialised consumer credit providers
                                                      3. What makes specialised credit providers           will suffer most from these new requirements,
Since 2008 I have been the Chairman of BNP            ‘special’? What do they do differently, more         which were originally targeted at other types of
Paribas Personal Finance and in June last             or better than high-street banks?                    institutions. Also, this must be seen in a context
year I became the Chairman of the French                                                                   where, depending on the registration country
Association of Financial Companies (ASF).             Apart from rare exceptions, specialised              of the mother company, not all institutions will
                                                      consumer credit providers are the only ones          have to comply with these requirements.
2. What are the biggest threats, challenges or        offering credit at the point of sale. This, in my
opportunities for the industry going forward?         opinion, is, and will remain, the specificity of     5. What are, in your view, the key aspects
                                                      specialised providers.                               of responsible lending? What is the Cetelem
In my view, the most important threat for                                                                  Foundation?
the industry is that of a very restrictive and        Specialists are the only ones to have developed
ill-suited regulatory framework.                      the necessary processes and tools to provide         Responsible lending has been a guiding prin-
                                                      credit instantly. Unlike banking institutions that   ciple of BNP Paribas Personal Finance for
First consumer-driven regulations that are            restrict their offer to their existing customers,    a long time. It has even been registered as
coming from the Consumer Credit Directive and         specialised providers have developed a specific      a brand name in France since 2004.
the variety of ways in which some of its provi-       know-how in risk management and behaviour
sions have been implemented across Europe             patterns of borrowers. Our risk management           Responsible lending is essential in order to
are examples of that threat.                          tools are therefore more sophisticated.              increase, or restore, consumer confidence
                                                                                                           towards credit and credit providers. This
     Other challenges include                         4. What are the impacts of legislation devel-        cannot be just a motto; it must be completely
                                                      oped in Brussels and at international level          integrated into the lender’s processes and
adapting to consumers’ new                            on your business?                                    marketing approach. It implies always acting
needs and expectations, and                                                                                in the interest of the applicant borrower.
to become more innovative                             European and international regulations have
                                                      more and more of an impact on our business.          In this context, the Cetelem Foundation, estab-
in order to remain attractive                         This impact can be vital, as in the case of          lished in 1992, provides consumers with
and be able to gain or regain                         the introduction of new solvency and liquidity       educational programmes to improve their
the confidence of consumers.                          ratios for lending institutions.                     budgeting skills. The Foundation is the combi-
                                                                                                           nation of Cetelem’s knowledge and the expertise
But even more, the consequences of some of            The new Basel 3 rules will require institutions      of external teachers. The educational mate-
the Basel 3 requirements, in particular the new       to have more capital and sufficient assets to        rial, as well as the training of the teachers, is
liquidity ratios, risk being extremely damaging       ensure liquidity. These requirements will auto-      provided by the Foundation, which cooperates
for the consumer credit industry, unless correc-      matically lead to an increase in pricing. There is   in France with five well-known associations.
tive actions are taken at EU level.                   a distinct risk that as institutions start meeting   Many members of our staff participate in the
                                                      the new liquidity requirements, demand for           activities of the Foundation on a voluntary basis.
The industry faces important organisational           eligible assets will far exceed the offer, which
challenges as we need to decrease manage-             will have severe market implications. This risk      We are currently thinking of developing similar
ment costs to compensate for the unavoidable          has, in my view, been underestimated by regu-        projects in other European countries such as
increase of the costs of funding and capital          lators so far.                                       Italy, Portugal and Spain.


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     CONSUMER CREDIT
     BULLETIN EUROPE

INTEREST RATE RESTRICTIONS                                                                                        APRC FOR
Eurofinas calls for further analysis
                                                                                                                  CONSUMER
• Is there a need for pan-European interest rate
restrictions? This is, in short, what was discussed
                                                               The desirability of credit access for low-income
                                                               borrowers and the degree of product innova-        CREDIT
by European stakeholders while responding
to a European Commission consultation on
                                                               tion are, and should remain, local questions.
                                                               Eurofinas warns against the profound struc-        AGREEMENTS
interest rate restrictions earlier this year.

For the moment, different types of pricing control
                                                               tural and technical changes in the consumer
                                                               lending business that any European regula-
                                                               tory intervention in that field would bring.
                                                                                                                  EXAMINED
mechanisms for credit agreements coexist across                This should not, however, preclude conducting      Towards an amendment
Europe with different underlying rationales.                   further analysis on market exclusion in general    of the CCD?
The impact of these mechanisms varies                          and existing alternative finance mechanisms
depending on the type of restrictions in place,                for low-income borrowers.                          • The European Commission has recently
the structure and maturity of the market and/                                                                     launched a comitology procedure on the
or the type of providers. Given the situation, it              The study further finds that there is no proven    calculation of the Annual Percentage
is very difficult to draw any common conclu-                   correlation between interest rate restrictions     Rate of Charge (APRC) for consumer credit
sion. What is clear however is that interest rate              and reduced levels of over-indebtedness, a point   agreements. According to this comitology
restrictions impact market characteristics and                 consumer groups might well dispute. Further        procedure, “non essential” elements of the
business structures in a substantial manner.                   analysing the preventive and reactive treat-       Consumer Credit Directive (the CCD) can
                                                               ment to over-indebtedness in European markets      be modified/adjusted by the Commission
A recent study, conducted by a German                          would probably help identifying reliable trends    with the help of a committee, thereby
consultancy firm at the request of the                         at European level and should be encouraged.        avoiding going through the lengthy ordi-
European Commission, has confirmed that                                                                           nary legislative procedure (i.e. through
interest rate restrictions reduce access to                    Eurofinas will closely monitor this issue and      the Council and the Parliament).
credit, in particular for low-income borrowers,                report on relevant developments in future
and impact the diversity of products on offer.                 issues of Consumer Credit Bulletin Europe.         On 3 March 2011, the committee,
                                                                                                                  composed of national regulators, decided
                                                                                                                  that APRC deserved further work at
                                                                                                                  European level. This is because several
                                                               DID YOU KNOW?                                      regulators currently experience difficulties
                                                                                                                  in implementing the CCD provisions and
                                                               • In September 2010, Eurofinas organised
                                                                                                                  assumptions on APRC calculation.
                                                               a Roundtable discussion on interest rate
                                                               restrictions in Brussels. The aim was to bring
                                                                                                                  After due consultation of a number of
                                                               together European Commission officials and
                                                                                                                  experts, the committee will decide in early
                                                               experts from different markets and profes-
                                                                                                                  June whether the CCD shall be amended
                                                               sional backgrounds (lenders, academics,
                                                                                                                  and/or whether guidelines should be
                                                               solicitors) to share their experiences and
                                                                                                                  published on APRC calculation. It is widely
                                                               exchange views on pricing restrictions.
                                                                                                                  believed that amending the Directive
                         e on
                RoundtablRate                                  The main points presented and discussed
                                                                                                                  would imply the addition of further

                 InteRest ns                                   at the Roundtable are summarised in
                                                                                                                  assumptions on APRC calculation.

                  RestRIctIo                                   a report on interest rate restrictions
                                                                                                                  For the moment, problems identified by
                             Brussels, 10
                                            September
                                                        2010
                                                               published by Eurofinas and available on
                                                                                                                  the Committee remain limited. However
                                                               its website.
                                                                                                                  new issues are likely to be raised,
                                                                                                                  especially by CEE countries.
                                                               For further information, please contact
                                                               a.giraud@eurofinas.org




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     CONSUMER CREDIT
     BULLETIN EUROPE

RESPONSIBLE                                        European level and that it represents a major
                                                   step in consumer protection across the EU,
                                                                                                        intermediaries offering home loans. It is
                                                                                                        unclear at this stage how national regulators

LENDING                                            in particular when it comes to creditworthiness
                                                   assessment and prudent lending decision-
                                                   making. The transposition of the CCD into
                                                                                                        will interpret such provisions and whether they
                                                                                                        will be tempted to extend these requirements
                                                                                                        to consumer credit intermediaries.
                                                   Member States legislation also brings substan-
                                                   tial changes to lenders’ current business            Finally, the Proposal introduces a number of
                                                   practices, which are deemed to be beneficial.        worrying regulatory requirements such as
                                                                                                        the obligation to deny credit in the event of
                                                   Consequently, Eurofinas urged European poli-         a negative creditworthiness assessment.
                                                   cymakers to wait for the CCD provisions to be        Where an application is rejected on the basis of
                                                   fully implemented and to conduct an appro-           an automated decision, the consumer should
                                                   priate impact assessment on business practices       have the opportunity to request that the deci-
                                                   and consumer protection before considering           sion be reviewed manually.
                                                   any further regulatory action in the field
                                                   of consumer credit. The Commission’s deci-           Such requirements deserve the utmost atten-
                                                   sion to restrict the scope of its Proposal to the    tion from the consumer credit industry to avoid
                                                   provision of home loans is therefore a positive      any overlap between regulatory frameworks.
                                                   development. However, a number of important
                                                   concerns remain.                                     Preliminary views from the European
• The European Commission has recently                                                                  Parliament and the Council of Ministers should
published its Proposal for a directive on          Firstly, the CCD was fully or partially extended     be known before the summer break. Eurofinas
credit agreements for residential property.        to home loans by 15 Member States. It is             is following this issue very closely.
The Proposal follows several months of             therefore important that these Member States
consultation of a number of stakeholders on        restrict the transposition of the future Directive
responsible lending in which Eurofinas actively
participated. Initially aimed at covering all
                                                   on credit agreements for residential property to
                                                   home loans exclusively and avoid any exten-
                                                                                                          NEW REPORT
‘business to consumer’ transactions, the initia-
tive was later restricted to the provision of
                                                   sion to the consumer credit sector. Failing to
                                                   do so would compromise the general consis-
                                                                                                          ON CREDIT
home loans.                                        tency of the European regulatory framework.
                                                                                                          BUREAUS
In its response to the consultation, Eurofinas
argued that the Consumer Credit Directive
                                                   Secondly, the Proposal contains a number
                                                   of specific requirements for the registra-
                                                                                                          ACROSS EUROPE
(CCD) ensures sound lending practices at           tion, authorisation and supervision of credit          • In March 2011, the Association of
                                                                                                          Consumer Credit Information Suppliers
                                                                                                          (ACCIS) and the European Credit Research
                                                                                                          Institute (ECRI) launched a report on

POLISH EU PRESIDENCY                                                                                      ‘The European Credit Information
                                                                                                          Landscape’.

TO BEGIN IN JULY                                                                                          The report is based on a survey of
• From 1 July 2011, Poland, Denmark and            the Polish presidency. The full list of priorities     30 credit bureaus in 23 countries and
Cyprus will hold the rotating trio presidency      will be determined after due consultation of           provides information of interest to
of the European Union for eighteen months.         the other Member States and European insti-            providers of consumer credit.
Poland will be the first of the three Member       tutions and in accordance with the European
States to conduct the work of the Council of       Commission’s agenda for 2011, the long-                This study was undertaken to provide a
Ministers and will do so until 1 January 2012.     term EU agenda, as well as by problems that            clear understanding of how credit bureaus
                                                   may arise during the presidency. Denmark               operate, what data they collect and
The new EU financial framework and                 and Cyprus’ views will also be taken into              supply, and data protection restrictions.
the strengthening of the EU internal market        account as Poland’s partners in the upcoming
were mentioned among initial priorities of         trio presidency.




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        CONSUMER CREDIT
        BULLETIN EUROPE

EUROPEAN CONSUMER CREDIT MARKET
STABILISED IN 2010
• European consumer credit providers, repre-
sented through Eurofinas1, granted new loans                                 Chart 1: Total New Credit, 2002-2010
worth €324.5 billion in 2010, an increase                                    15%
of 0.7% compared to 20092. This modest
                                                                             10%
increase was driven by a significant increase
in mortgage lending (17%). However, new                                       5%


lending provided for total consumer credit,                                   0%

which accounts for 71% of the Eurofinas total,                                -5%
declined by 2.8% in 2010.
                                                                             -10%


The survey shows that Eurofinas members                                      -15%


account for approximately 46% of the total                                   -20%
                                                                                      2002        2003        2004        2005         2006        2007        2008         2009     2010
outstanding loans for consumer credit and
consumer car finance in the 14 countries
reporting. Eurofinas members reported €428
billion of outstanding loans at the end of 2010                      While new lending has not reached the levels                         There were substantial recoveries in new
compared to a total market of €937 billion.                          seen before the financial crisis, it is significant                  lending for total consumer credit3 in Nordic
                                                                     that new lending has returned to positive                            countries such as Finland (18%), Denmark
Chart 1 shows the trend in total lending by                          growth in 2010.                                                      (15%) and Sweden (12%). However, larger
Eurofinas members between 2002 and 2010.                                                                                                  markets such as Germany (-8%), the UK (-6%)
                                                                     The evolution of total lending by Eurofinas                          and Italy (-5%) showed declines, leading to an
                                                                     members between 2009 and 2010 is shown                               overall decline of 2.8% when exchange rate
    Chart 2: Total Eurofinas Lending - New Credit
    (in billion €)                                                   in Chart 2. While industrial credit and mort-                        fluctuations are excluded.
                                                                     gage lending account for a small proportion of
    2009                                                             total lending, the growth in these two catego-                       It is positive that there was growth in some
                          40.3 €
                                             165.6 €
                Mortgage Credit
                                             CC for Personal         ries was responsible for the modest recovery                         product categories and some member coun-
                                             Consumption
              23.5 €
                                                                     in total lending in 2010.                                            tries in 2010. These results clearly indicate
     Industrial Credit                                                                                                                    stabilisation following the sharp declines
                                   317.9 €                           Of the various consumer credit products                              in 2008 and 2009. This points to greater
                                                                     granted, it is encouraging that personal loans                       optimism for 2011, as signs of recovery in
                 88.5 €
        Vehicle Finance                                              returned to positive growth in 2010, with                            consumer spending should be more evident
                                                                     new lending in this category increasing by                           given declining savings rates and gradual
                                                                     0.5%. Recovery was slower in other categories                        improvements in consumer confidence and
    2010
                                                                     such as revolving credit and non-automotive                          labour markets.
                         47.1 €                                      credit at the point of sale (with new lending
              Mortgage Credit                  163.5 €
                                               CC for Personal
                                               Consumption           decreasing by 3.5% and 5.1%, respectively).                          An increase in private consumption is a prereq-
             25.2 €                                                  Nevertheless, this represents a marked improve-                      uisite for a self-sustaining economic recovery
    Industrial Credit
                                                                     ment compared to the more significant declines                       in Europe following the financial crisis.
                                   324.5 €
                                                                     of 2009 (-12.9% and -11.8%, respectively).                           Consumer credit typically plays a crucial role
               88.7 €                                                                                                                     in fostering recoveries after a financial crisis,
      Vehicle Finance
                                                                     Underlying the European trend, there were                            not least because it can give consumers simple
                                                                     significant differences in market conditions                         and affordable access to finance.
                                                                     across European countries in 2010 (see Chart 3).

                                                                                                                                                                            Continued on next page >


1. The following Eurofinas members took part in the survey: UPC/BVK (BE), CLFA (CZ), BFACH (DE), Finans og Leasing (DK), ASNEF (ES), FKL (FI), ASF (FR), ASSOFIN (IT),
   LVLKA (LT), VFN (NL), FINFO (NO), ASFAC (PT), AFINA (SE), FLA (UK).
2. The growth rates shown are adjusted to exclude the impact of exchange rate fluctuations. On an unadjusted basis, Eurofinas members’ overall new lending increased by 2.1%.
3. Total consumer credit = consumer credit for personal consumption + consumer vehicle finance.


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      CONSUMER CREDIT
      BULLETIN EUROPE

> Continued
                                                          Chart 3: Total Consumer Lending* and Consumer Credit*, adjusted for exchange rate fluctuations

While the consumer credit industry can                    30%


be more optimistic about the prospects for                25%


recovery in 2011, there are significant head-             20%


winds as well. For example, the ECB has begun             15%


to tighten monetary policy in the eurozone,               10%


consumer incomes are under pressure from                   5%


rising inflation, and many governments are                 0%


under pressure to stabilise their public finances.         -5%

                                                          -10%


Despite the continued difficult conditions                -15%


faced by the consumer lending industry in                 -20%
                                                                 FI    DK    SE     PT    CZ    BE     FR    NL     ES    NO    TOTAL    IT     UK     LT      DE
2010, there has been a modest improve-
                                                                                                                            Total Consumer Credit      Total Lending
ment in consumer spending and consumer
confidence throughout 2010. Signs of
recovery in consumer spending should be              rates as households’ confidence continues                *Total Consumer Credit: including Consumer Credit for Personal
                                                                                                               Consumption and Vehicle Finance but not Mortgage Lending
more evident in 2011, supported by gradual           to improve. For more information, please                  nor Industrial Credit.
improvements in labour market conditions             contact e.obriain@eurofinas.org | Download               *Total Lending: including Consumer Credit for Personal
                                                                                                               Consumption and Vehicle Finance AND Mortgage Lending AND
across Europe and by declining savings               the press release here                                    Industrial Credit.




    FOCUS                                                                                                     RELAUNCH OF
    ON VEHICLE                                                                                                THE SINGLE
    FINANCE                                                                                                   MARKET
    • Consumer credit providers, represented
    through Eurofinas, granted new loans worth                                                                • The European Commission adopted the
    €88.7 billion for vehicle finance in 2010                                                                 Single Market Act in mid-April, in accor-
    – a slight increase of 0.2% compared to                                                                   dance with its work programme for 2011 and
    2009 (a decline of -1.7% when adjusted                                                                    2012. Twelve priorities, which include inter
    for exchange rate fluctuations). This slight                                                              alia developing alternative dispute resolution
    overall increase was due to significant                                                                   mechanisms, strengthening the digital single
    recoveries in new credit granted for cars for    more normal levels in 2010. Nonetheless,                 market, and simplifying the regulatory envi-
    business purposes (18%) and commercial           the overall decline in lending for new                   ronment for businesses, have been selected
    vehicles in 2010 (8%).                           consumer cars masked significant increases               from an original list of fifty proposals after
                                                     in some other countries such as the UK                   four months of consultation and debate in
    Nonetheless, new credit granted to               (11%), France (7%), Sweden (23%),                        Brussels. According to José Manuel Barroso,
    consumers for purchasing new cars                Portugal (21%) and the Netherlands (21%).                President of the European Commission,
    continued to decline in 2010 by -4.3%                                                                     “all twelve have one thing in common:
    to 38.3 billion euro, reflecting significant     New lending to consumers for the purchase                creating growth and jobs by better exploiting
    declines in key markets such as Germany          of used cars stabilized in 2010 showing                  the potential of the Single Market.”
    (-25%) and Italy (-15%). This negative           a modest increase of 0.2% to €26.4 billion.
    trend in consumer car finance reflects           However, it is a concern for the consumer                The Commission will take stock of the prog-
    the expiration of car scrappage schemes          credit industry that new car registrations               ress made under the Single Market Act at the
    in several major markets. Following the          have continued to decline in Q1 2011                     end of 2012 and then undertake an extensive
    exceptional year of 2009, it was inevitable      (-2.3% according to ACEA, the European                   economic study to identify any areas with still
    that consumer car finance would return to        Automobile Manufacturers Association).                   unexploited growth potential.




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      CONSUMER CREDIT
      BULLETIN EUROPE

    coming soon

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ANNUAL CONVENTION OF THE EUROPEAN
CONSUMER CREDIT INDUSTRY
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with the right balance between powerful content and                                                   REASONS TO ATTEND

high-level networking!                                                                                · Highly informative presentations
                                                                                                      · First-class speakers
• As the premier gathering for consumer credit                                                        · Real issues with a focus on practical
professionals, organised by Eurofinas, the                                                              solutions and experiences
Annual Convention of the European Consumer                                                            · Numerous networking opportunities
Credit Industry attracts all the leading players                                                      · Low registration fee
from across Europe and beyond. It is a unique
forum for open discussions on the many
challenges facing the industry.


    AMONG SPEAKERS CONFIRMED TO DATE

    David Betteley, Director Financial
    Services, JLR                                  Additionally, it provides tremendous oppor-
    Jean Dornhofer, Senior Vice President &        tunities for networking with senior industry
    ABS team leader, Moody’s                       colleagues and is the only event organised by
    Philippe Dumont, CEO,                          the industry for the industry at European level.
    Crédit Agricole Consumer Finance
    Marc Luet, CEO, EMEA,                          The 2011 Convention will take place in Vienna
    Citicorp Consumer                              at the state of the art Austria Trend Hotel
    Bernard Manuelli, Automotive                   Savoyen on 29 & 30 September.
    Partnerships Director, International
    Division, Crédit Agricole Consumer Finance     Join us in Vienna and be part of the only
    Vijay Ramchandran, Consumer Marketing          European dialogue in your sector.
    Head, EMEA, Citicorp Consumer                  More information on the programme and on how
    Bruno Salmon, Chairman, BNP Paribas            to register is available on the brand new dedi-
    Personal Finance                               cated website at www.annual-convention.eu.
    Gianluca Soma, CEO, SG Consumer Finance
    Frank Witter, Chairman of the Board,           Check the annual convention website regu-
    Volkswagen Financial Services AG               larly for updates. For more information, please
                                                   contact a.valette@eurofinas.org




                                                                                                                     Mark
                                                                                                                     the date!
                                                                                                                     29 & 30 Sept. 2011
                                                                                                                     Hotel Savoyen
                                                                                                                     Vienna, Austria


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     CONSUMER CREDIT
     BULLETIN EUROPE

EU COMMISSION TO ADDRESS
THE CURRENT SHORTCOMINGS OF ADR
Eurofinas calls for wider coverage
• In January 2011, the European Commission         In its consultation, the Commission has identi-
launched a public consultation on the use of       fied a number of shortcomings that it wishes
alternative dispute resolution (ADR) as a means    to consider by November 2011. These include,
to resolve disputes. Also known as ‘out-of-court   among others, low awareness of ADR schemes
mechanisms’, these alternative methods to          by businesses and consumers alike as well as
obtain compensation have increasingly been         numerous discrepancies between sectors and
used over the years. ADR schemes usually           Member States.
involve a third party such as an ombudsman
or mediator to help consumers and businesses        According to the Consumer Credit Directive,
reach an agreement. Compared to going              ‘adequate and effective out-of-court mecha-
to court, it is widely recognised that these        nisms are to be put in place’ for the consumer
schemes are usually confidential, cheaper,          credit industry.
quicker and more informal.
                                                   In its answer to the consultation, Eurofinas
The debate on ADR started back in 2001 and
led to Recommendations by the Commission
                                                   called for a cross-sectoral coverage and
                                                   considers it as a sine qua non for any EU initia-
                                                                                                           SPEAKING
and a Green Paper. Since then, no further
measures have been taken.
                                                   tive on ADR. More information on Eurofinas’
                                                   position is available here.
                                                                                                           AT EVENTS
                                                                                                           • Alexandre Giraud, Eurofinas Senior
                                                                                                           Legal Adviser, gave a presentation
                                                                                                           on European policy developments at

EU CLASS ACTION?                                                                                           a Roundtable on Responsible Lending
                                                                                                           organised by Eurofinas' Lithuanian
• Collective redress has been discussed at         legislation, or for better protecting the rights of     member association LVLKA in Vilnius,
European level for quite some time, both           citizens. The set of principles resulting from the      Lithuania, on 6 May 2011.
in the areas of competition and consumer           consultation should guide any potential EU
policy. The positions of the various stake-        initiative for collective redress.                      • Tanguy van de Werve, Eurofinas
holders on this issue are well known: business                                                             Director General, gave a presentation on
representatives are opposed to the introduc-       Eurofinas opposes the introduction of new               the European Regulatory Landscape at
tion of collective redress, fearing abusive        collective redress mechanisms at EU level and           the 2011 Auto Finance Summit, Berlin,
practices, while consumer representatives are      believes that the Commission should begin               Germany, on 24 May 2011.
strongly in favour of introducing class actions.   with an impact assessment of existing legisla-
However, most stakeholders have warned             tion, such as the Small Claims Regulation, on
the European Commission that due to the            mass claims. Should the current framework of          are also a viable alternative to judicial mass
different initiatives and discussions taking       measures for addressing mass claims be found          claims. However, should we go ahead with
place in its various Directorate Generals, there   to be insufficient, existing legislation should be    collective out-of-court settlements, a dedicated
is a risk of inconsistencies.                      adapted accordingly.                                  discussion should take place on collective ADR
                                                                                                         beforehand.
The Commission launched a public consul-           Where rights are infringed, citizens and busi-
tation in January 2011 in order to identify        nesses must be able to enforce the rights             The Commission has indicated that it will
common legal principles on collective redress,     granted to them by EU and national legislation.       publish a Communication on the outcome of
so it could examine how these principles could     Instead of EU collective redress mechanisms,          the consultation before the end of 2011, after
fit into the EU legal system and into the legal    alternatives should be considered. These              which, it will be decided what EU initiative in the
framework of the 27 Member States. This            include: the introduction of non-binding guide-       area of collective redress will be taken, if any.
consultation explores in which fields different    lines on the national systems or an exchange
forms of collective redress could have an added    of best practices, which is applicable to all         For further information,        please     contact
value for improving the enforcement of EU          sectors. Alternative dispute resolution schemes       a.delava@eurofinas.org


9                                                                                                                                            print · next page
       CONSUMER CREDIT
       BULLETIN EUROPE


     CONSUMER                                    FIGHTING FRAUD
     CREDIT
     STATISTICS
     WORKSHOP
     • Eurofinas is organizing a workshop
     on 10 June 2011 in Brussels on the
     lack of comparability between existing
     consumer credit statistics in Europe.

     The workshop aims to look at the lack of    • On 10 May 2011, the Eurofinas-ACCIS              At the meeting, the Task Force identified concrete
     consistency in consumer credit statis-      (the Association of Consumer Credit                problems experienced when fighting fraud in the
     tics collected at European level, and       Information Suppliers) Joint Task Force on         field of consumer lending and discussed possible
     possible remedies. It will bring together   Fraud Data met for the first time in Brussels.     solutions and improvements to address them.
     experts from national central banks,                                                           Part of the meeting was dedicated to an initial
     national statistics institutions, EU        Fighting fraud is an issue of common interest      estimation of the size of fraud related problems
     institutions, consumer credit providers     to Eurofinas and ACCIS membership, in partic-      within the consumer credit industry.
     and consultancies with expertise in the     ular the issue of access to and exchange of
     area. Representatives of the European       fraud data. Currently, the lack of harmonisa-      The Task Force will consolidate its findings in a
     Central Bank, Deutsche Bundesbank,          tion in data protection rules at European level    publication to ensure that robust engagement
     Bank of England and Banca d’Italia will     and the stringent nature of these rules are        with EU officials can take place, especially for
     make presentations on the collection        obvious obstacles in the fight against fraud.      those aspects of data protection of particular
     of statistics.                              The Joint Task Force has an opportunity            concern to the consumer credit industry.
                                                 to play an active role and suggest changes at
     The workshop will provide participants      a critical moment given that the Data              Do you want to get involved in the Eurofinas-
     with the opportunity to share experi-       Protection Directive is currently being reviewed   ACCIS Joint Task Force on Fraud Data? Please
     ences, identify which issues lead to        by the European Commission.                        contact a.delava@eurofinas.org
     a lack of data comparability, and assess
     how these could be addressed in future.
     For further information, please contact
     e.obriain@eurofinas.org
                                                 EUROFINAS
                                                 WELCOMES ITS FIRST
                                                 ASSOCIATE MEMBER
     INTERESTED IN BECOMING AN                   • Following the launch of its associate member-    is to deliver market-leading, industry specific
     ASSOCIATE MEMBER OF EUROFINAS?              ship programme earlier this year, Eurofinas is     solutions based on its proven products to the
                                                 delighted to welcome the White Clarke Group        finance and leasing sectors within the interna-
     • Requests for information on Eurofinas
                                                 as its first associate member for 2011.            tional financial services market.
     associate membership and related bene-
     fits for 2011 should be addressed to
                                                 Since inception in 1992, the White Clarke          The associate membership programme is
     Anne Valette, Head of Communications,
                                                 Group (WCG) has focused on providing busi-         aimed at enhancing Eurofinas’ relationship
     Eurofinas, a.valette@eurofinas.org
                                                 ness technology solutions to the Asset Finance     with players who have affinities or do business
                                                 sector. It has developed a depth of knowledge,     with the consumer credit industry, but are not
                                                 expertise and a highly successful track record     consumer credit providers themselves.
                                                 of building long term client relationships
                                                 across the globe. The WCG’s business strategy


10                                                                                                                                     print · next page
       CONSUMER CREDIT
       BULLETIN EUROPE

A FIRST MEETING                                     • The Eurofinas Motor Finance Working Group
                                                    held its first meeting in Brussels on 28 April
                                                                                                        DID YOU KNOW?
FOR EUROFINAS                                       2011. The Working Group was set up to
                                                    provide its members – lenders, both captives
                                                                                                        • The Eurofinas Task Force on Insurance
                                                                                                        Mediation held its first meeting on

MOTOR FINANCE                                       and non captives, active in motor finance -
                                                    with a dedicated platform to discuss concrete
                                                                                                        Thursday 10 February 2011 in Brussels.
                                                                                                        The Task Force is a dedicated forum to

WORKING GROUP                                       issues relating to relevant European policy
                                                    developments and market trends. The meeting
                                                                                                        exchange views and share intelligence
                                                                                                        on European developments in the field
                                                    was an opportunity to share views on market         of insurance mediation that may impact
                                                    characteristics and local regulatory initiatives    consumer credit providers. The input
                                                    as well as discuss how to best strengthen           of the Task Force members was instru-
                                                    the voice and raise the visibility of the motor     mental to the development of a robust
                                                    finance industry at European level.                 and substantiated Eurofinas position on
                                                                                                        the European Commission’s review of
                                                     Do you want to be involved in the Eurofinas        the Insurance Mediation Directive.
                                                     Motor Finance Working Group? Contact
                                                     a.giraud@eurofinas.org




NEWS FLASH FROM EUROFINAS
MEMBER ASSOCIATIONS                                                                                     Do you want to get involved in the Eurofinas
                                                                                                        Task Force on Insurance Mediation?
• Kees Droppert, CEO of Credit Agricole Consumer Finance Netherlands has been appointed                 Contact a.giraud@eurofinas.org
as the new VFN Chairman in replacement of outgoing Chair Martin Aalders.




     NEW CHAIR APPOINTED                                                       NEW CHAIR OF
     FOR EUROFINAS LEGAL &                                                     THE EBIC CONSUMER
     POLICY COMMITTEE                                                          CREDIT WORKING GROUP
                              • In December 2010, Bert Reitsma was             • Edward Simpson was appointed
                              appointed the new Chair of the Eurofinas         chairman of the European Banking
                              Legal and Policy Committee (LPC).                Industry Committee (EBIC) Working
                              The LPC is the Federation’s decision-            Group on Consumer Credit in May
                              making body in charge of legal affairs,          2011. Eurofinas is in charge of this
                              policy and advocacy.                             working group which is responsible for all
                                                                               European policy developments related to
                              Bert Reitsma has worked over 15 years            consumer credit.
                              in the financial services sector in various
                              capacities. Since early 2009, he has been        Edward has been working at Eurofinas’
                              the Secretary General of Eurofinas’ Dutch        UK member, the Finance & Leasing
                                                                                                                            EDWARD SIMPSON
                              member association, the Vereniging van           Association (FLA), since January 2003.       Head of Government
     BERT REITSMA
     Secretary General, VFN   Financieringsondernemingen (VFN).                As Head of Government Affairs, he leads      Affairs, FLA
                                                                               the FLA’s UK parliamentary lobbying, and
                                                                               European policy and lobbying work.




11                                                                                                                                      print · next page
       CONSUMER CREDIT
       BULLETIN EUROPE

NUTS AND BOLTS OF EUROFINAS
                     • Eurofinas is governed      The Legal and Policy Committee may be                Eurofinas' organization
                      by a General Assembly       supported by ad hoc task forces and working
                      and a Board of Directors.   groups. Task forces are created as needed
                     The General Assembly         on specific issues and usually set up for a                             General
                      consists of all members     limited period of time. Current task forces are                        Assembly
                      of    the     Federation,   dedicated to insurance mediation, fraud data
             while the Board of Directors is      and prudential regulation. A Motor Finance
             composed of representatives          Working Group has also been created recently.
of the Federation’s members. The Chairman                                                                                Board of
of the Board, currently Pedro Guijarro (ES),      The Statistics Committee collects and anal-                            Directors
is appointed by the General Assembly for          yses statistical data from the Federation's
a 2 year term, renewable.                         members in order to further the understanding
                                                  of the European consumer credit market, and
The Board of Directors is assisted in its work    to support the activities of the Legal and Policy
by technical committees: the Legal & Policy       Committee. This includes detailed data on                 Statistics               Legal Policy
                                                                                                           Committee                 Committee
Committee and the Statistics Committee.           consumer credit for personal consumption,
                                                  car finance, mortgages, and industrial credit.
The Legal and Policy Committee is respon-         Statistical reports are published twice a year.             Motor                        Join Task
                                                                                                             Finance                       Force on
sible for, inter alia, analysing and shadowing    The Committee is chaired by Umberto Filotto
                                                                                                             Working                      Fraud Data
the various legislative proposals made by the     (ASSOFIN, IT). The secretariat is provided by               Group
European Commission. It develops arguments        Jurgita Bucyte and Eoghan O’Briain, Advisers
and positions on EU regulatory and legisla-       in Statistics & Economic Affairs.                                                       Prudential
                                                                                                                                          Regulation
tive issues that may impact the consumer                                                                                                  Task Force
credit industry. The Committee is currently       More information on the role and priorities of
chaired by Bert Reitsma (Vereniging van           these committees, task forces and working
Financieringsondernemingen in Nederland,          groups can be found on the Eurofinas website.                                           Insurance
                                                                                                                                          Mediation
NL). The secretariat is provided by Alexandre
                                                                                                                                          Task Force
Giraud, Eurofinas Senior Legal Adviser.




                                                   staff news




     • Consumer credit professionals are
                                                  ANKE DELAVA
     joining the newly created Eurofinas’                                       • Anke Delava joined the Eurofinas Secretariat as a legal adviser in
     affinity group on LinkedIn in great                                        March 2011.
     numbers. Contrary to many other
     similar initiatives, Eurofinas’ LinkedIn                                   A Belgian national, Anke has an LLB in European, International and
     Group is restricted to consumer credit                                     Comparative Law from the University of Sheffield (UK) and an LLM in
     professionals. This makes it Europe’s                                      International and Comparative Private Law from the Rijksuniversiteit
     unique on-line community of consumer                                       Groningen (NL). Anke is fluent in Dutch, English and Swedish.
     credit professionals, which allows the
     exchange of views among peers only.          ANKE DELAVA                   Prior to joining the Secretariat, she worked as a legal adviser for
     Join us!                                     Legal Adviser for Eurofinas   the Orde van Vlaamse Balies, the Flemish Bar Association of Belgium.




12                                                                                                                                          print · next page
       CONSUMER CREDIT
       BULLETIN EUROPE

SAVE THE DATE                                                                                                                  EUROFINAS STAFF
events / meetings
June

09                          10
Board                       Workshop on                                                                                        TANGUY VAN DE WERVE                   ALEXANDRE GIRAUD
                                                                                                                               Director General                      Senior Legal Adviser
Brussels                    European Consumer                                                                                  t.vandewerve@eurofinas.org            Legal & consumer affairs
                            Credit Statistics                                                                                  T +32 2 778 05 67                     a.giraud@eurofinas.org
                            Brussels                                                                                                                                 T +32 (0)2 778 05 64

September

07·08                       29                                   29·30
Legal & Policy              General Assembly                     Annual Convention
Committee                   Vienna                               of the European
Copenhagen                                                       Consumer Credit                                               JURGITA BUCYTE                        EOGHAN O'BRIAIN
                                                                 Industry                                                      Adviser                               Adviser
                                                                 Vienna                                                        Statistics & economic affairs         Statistics & economic affairs
                                                                                                                               j.bucyte@eurofinas.org                e.obriain@eurofinas.org
November                                                                                                                       T +32 2 778 05 63                     T +32 2 778 05 71


17                           24
Legal & Policy               Board
Committee                    Brussels
Brussels

• For latest updates on events and meetings, simply consult the calendar                                                       ANKE DELAVA                           ANNE VALETTE
                                                                                                                               Legal Adviser                         Head of Communications
  on Eurofinas’ website home page.                                                                                             Legal & consumer affairs              Communications, marketing
                                                                                                                               a.delava@eurofinas.org                & media relations
                                                                                                                               T +32 (0)2 778 05 73                  a.valette@eurofinas.org
                                                                                                                                                                     T +32 2 778 05 65
     EUROFINAS
                                                                                                     ck
                                                                                               hitlo




     OFFICE IN BRUSSELS
                                                                                         and W




                                          M
                                                                                   Bd. Br




                                        Schuman


     Blvd Louis Schmidt 87
                                                                   Montgomery
     1040 Brussels - Belgium                                                                                Av. de
                                                                                                                   Tervur
                                                                                                                          en
                                                                               l
                                                                           iche




     T +32 2 778 05 60
                                                                      int-M
                                                                    Bd. Sa




     F +32 2 778 05 78                                                                                                         OLIVIA FABRY                          INGRID VERMEERSCH
     www.eurofinas.org                                    is
                                                               T M Petillon                                                    Junior Adviser                        Secretary
                                                       ou
                                                    . L idt
                                                  Bd chm
                                                    S
                                                                                                          M 5
                                                                                                          T 23, 24, 25
                                                                                                                               (Internship until end of July 2011)   Administrative support
                                                                                                                               o.fabry@eurofinas.org                 i.vermeersch@eurofinas.org
                                                                                                                               T +32 (0)2 778 05 72                  T +32 2 778 05 67




                                                                                                                                  YOUR FEEDBACK COUNTS!

                                                                                                                                  To provide feedback on this newsletter, or to be
                                                                                                                                  added/removed from our mailing list, please contact
Eurofinas’ spacious meeting rooms and adjacent lounges are available                                                              a.valette@eurofinas.org
for any Brussels meetings you may wish to organise. Please contact
a.valette@eurofinas.org


13      Closing date: 25/05/2011                                                                                                                                                                print

				
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