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Proposal For a New Directive By the European Commission Sets Out to Harmonise Consumer Credit-based Crowdfunding

by EUROCROWD on 12.07.2021

On 1 July 2021, the European Commission issued the long-awaited proposal for a Directive on Consumer Credits which will repeal and replace the current Consumer Credit Directive. This revised proposal is a direct response to the increasing digitalisation of consumer credit services, notably also during Covid. It has been written to clarify the rules at Union level concerning consumer credit agreements and, especially, crowdfunding credit services for consumers (also known as P2P).

As such, the proposal is a supplement to the previous crowdfunding regulation, the European Crowdfunding Service Provider Regulation (ECSP) for Business (Regulation (EU) 2020/1503) which excludes from its scope crowdfunding services offering consumer credit as defined in the Consumer Credit Directive (Directive 2008/48/EC).

EUROCROWD is welcoming the final step in setting clear guidance to the crowdfunding industry toward a professional service provision with strict consumer protection in mind. The proposal is substantive and complex, throwing up several issues for the crowdfunding sector. It no doubt will lead to significant adjustments in national implementations, as it aims at harmonising the rules to a maximum degree within its scope. The proposal will next be read in the Council and the Parliament.  

The Commission also published the Annexes to the draft Directive, an impact assessment report, an executive summary of the report and a factsheet. The European Parliament and the Council of the EU will now consider the draft Directive.

EUROCROWD and its members will continue to monitor the process and provide relevant information to the European Commission, Council and European Parliament in due course.