3.17 Article 29(4) of CCD2

Under Article 29, the consumer has the right to discharge his or her obligations before the date agreed in the credit agreement. As interpreted by the Court of Justice of the European Union in the Lexitor ruling, the right of the consumer to a reduction in the total cost of the credit to the consumer in the event of early repayment of the credit includes all the costs imposed on the consumer. The reduction in the total cost of the credit to the consumer should be proportionate to the remaining duration of the credit agreement and should also include costs which are not dependent on the duration of that credit agreement, including those which are fully exhausted at the time of granting the credit.

By way of derogation, Member States have the right to provide that compensation for early repayment may be claimed by the creditor only on condition that the amount repaid over a 12 month period exceeds a threshold defined by Member States. When fixing that threshold, which should not exceed €10,000, Member States should take into account the average amount of consumer credits in their market.

Question 17 – Should creditors have a right to compensation for early repayment and, if so, what should the threshold for early repayment be that triggers the right to compensation?

[NB The threshold is currently set at €10,000 under Regulation 19 para 5 of SI 281 of 2010]