3.21 Article 35(3) and (4) of CCD2

Given the significant consequences of enforcement proceedings for creditors and consumers and potentially for financial stability, it is necessary that creditors  proactively address emerging credit risk at an early stage and put in place necessary measures to ensure that they exercise, where appropriate, reasonable forbearance before enforcement proceedings are initiated. When deciding whether it is appropriate to exercise forbearance measures the creditor should take into account the individual circumstances of the consumer, such as his or her ability to repay the credit and his or her reasonable needs for living expenses. The creditor should limit the costs for the consumer in the event of default. 

Member States may allow creditors to define and impose charges on consumers arising from a default. However, such charges should be no higher than what necessary to compensate the creditor for costs incurred as a result of the default. In cases where Member States allow such charges on consumers, they shall provide for a maximum cap.

Question 21 – Should creditors in Ireland be permitted to impose cost-recouping charges on consumers in default? If yes, then what should the cap on such charges be?