The UFC-Que Choisir was worried, in April 2021 and already well before, about the proliferation of mini-consumer credits in France. Loans which are not subject to as strict regulations as mortgage loans, for example, and which create a real risk of household debt distress. The European Central Bank could tighten the screw.
Small consumer loans in the sights of the ECB?
A consumer loan, like a mortgage, is subject to a household risk assessment before being granted: the objective is to prevent households from finding themselves in a situation of over-indebtedness and therefore in the impossibility of pay. It is a legal obligation that micro-credits escape, however.
As soon as the amount borrowed is less than 200 euros and when the repayment is spread over less than 90 days, the law does not impose any restriction: not even on the interest rate which, according to the UFC, can reach 100 % and even more of the amount borrowed, which is much more than the usury rate. Moreover, these consumer credits are not presented as such, which can mislead the consumer: these are “installment” payment methods available directly in stores and, above all, on the Internet.
European screw tightening … paying in installments may become more complicated
In order to resolve the emerging problem all over Europe, especially since the Covid-19 crisis, given that these payment methods are very often offered on the Internet, the European Central Bank has planned, on June 30, 2021, a project to revise Directive 2008/48 / EC concerning, in fact, consumer loans and the controls on them.
The principle is simple: the ECB would like these micro-credits to also be subject to controls, such as larger or longer credits. A guarantee for the consumer but also for the establishments which offer these credits.
But the impact on consumption could be severe: not being able to pay in several installments, or having to justify having the means to pay and therefore waiting for the processing time of the file, could slow down households in their purchases.