On 4 February 2014 the European Parliament and the Council adopted Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property (the "Mortgage Credit Directive"). The purpose of the Mortgage Credit Directive is to establish a well-functioning internal mortgage market. The Mortgage Credit Directive should be implemented into national law before 21 March 2016. On 21 May 2015 a proposal to amend the Netherlands Financial Supervision Act (Wet op het financieel toezicht) and the Netherlands Civil Code (Burgerlijk Wetboek) implementing the Mortgage Credit Directive was published for consultation with market participants.
The Mortgage Credit Directive provides for rules relating, inter alia, to (a) financial education of consumers, (b) information to be provided to the consumer (information in advertising, general information and pre-contractual information), (c) adequate explanation of the proposed credit agreement, (d) assessment of the borrower's creditworthiness, (e) calculation of the annual percentage rate of charge in accordance with a prescribed formula and (f) rules relating to the sound execution of credit agreements, such as relating to arrears and foreclosure. The Mortgage Credit Directive also imposes supervisory and prudential requirements for credit intermediaries and non-bank lenders. Member States are allowed to impose or maintain more stringent consumer protection laws (save in relation to pre-contractual information and the calculation of the annual and percentage rate of charge).
On 21 May 2015 a proposal to amend the Netherlands Financial Supervision Act (Wet op het financieel toezicht) and the Netherlands Civil Code (Burgerlijk Wetboek) implementing the Mortgage Credit Directive was published for consultation with market participants. The Netherlands Financial Supervision Act is currently, for a substantial part, in line with the Mortgage Credit Directive and the changes thereto will be limited. The changes to the Netherlands Civil Code are more significant and include a new section exclusively on credit agreements with consumers relating to residential property. The new section follows the Mortgage Credit Directive closely and deals, inter alia, with the matters described under (b), (e) and (f) above. The new section of the Netherlands Civil Code will not apply to credit agreements entered into before the day these provisions become effective.
Pursuant to the Mortgage Credit Directive, the Netherlands Financial Markets Authority ("Autoriteit Financiele Markten") is appointed as supervisor.
For the proposed amendments to the Netherlands Financial Supervision Act (Wet op het financieel toezicht) and the Netherlands Civil Code (Burgerlijk Wetboek) implementing the Mortgage Credit Directive and the explanatory notes thereto, click here
Furthermore, on 1 June 2015 the European Banking Authority has issued guidelines on the creditworthiness assessment and the arrears and foreclosure provisions in the Mortgage Credit Directive. These guidelines aim to ensure the consistent implementation and supervision across the Member States.
For EBA's Guidelines on creditworthiness assessment, click here.
For EBA's Guidelines on arrears and foreclosure, click here.