Yesterday, the European Commission (EC) launched “a public consultation on 'Responsible lending and borrowing in the EU'.” The deadline for public comment is August 31, 2009, and a public hearing on responsible lending and borrowing will be held in Brussels on September 3, 2009, to review the main conclusions from the consultation and to “discuss with stakeholders the most appropriate policy responses to the challenges faced by borrowers and the financial services industry.”

The EC stated in its release that this initiative “should be viewed in the context of the Commission's 4 March 2009 Communication 'Driving European Recovery' where the Commission undertook to come forward with measures at [the] EU level on responsible lending and borrowing.” Internal Market and Services Commissioner Charlie McCreevy noted that "[t]he financial crisis has shown the damage that irresponsible lending and borrowing practices can have on consumers, lenders, the financial system and the economy at large. We are therefore determined to learn from possible mistakes to ensure that lending and borrowing takes place in a responsible manner. This public consultation will allow the Commission to gather views and ideas on the extent of irresponsible behavior and to assess which measures may be most appropriate."

The consultation will specifically focus on the areas of retail financial services and mortgage credit with the goals of achieving greater understanding of outstanding issues “surrounding responsible lending and borrowing” and contributing to the EC’s analysis of the “varying policy options in this area.” The consultation will cover, “amongst other things, the advertising and marketing of credit products, the pre-contractual information provided, ways to assess product suitability and borrower creditworthiness, advice standards, responsible borrowing and issues relating to the framework for credit intermediaries (e.g. disclosures, registration, licensing and supervision).”