No. A consumer should be free to choose their own payment or savings account to service a loan. Requiring a borrower to have such accounts is not good for competition and it may leave the consumer...
3.7 Article 14(2) of CCD2
Closed19 Sep, 2024, 12:00 - 18 Oct, 2024, 17:00
Article 14(2) provides for a derogation from the general prohibition on tying practices, which can induce consumers to enter into credit agreements that are not in their best interest. However, Member States may allow creditors to request consumers to maintain a payment or saving account where the purpose of the account is to accumulate capital to repay the credit, to service the credit, to pool resources to obtain the credit or to provide additional security for the creditor in the event of default.
Question 7 – Should creditors be allowed to require borrowers to open or maintain accounts as part of the credit agreement for the above purposes?
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Observations
For context, to obtain a loan from a credit union, the borrower must first become a member by holding a share account with at least one fully paid share, as required by the Credit Union Act 1997....
Yes. This is a useful exemption for lenders, as well as facilitating the provision of credit to consumers.
Yes. Credit Unions have members who must join before accessing credit or using the credit union. This is set out in Section 17 of the CUA. It could be read in such a way that for the abundance of...
In order to obtain credit from a credit union, the borrower must first be a member. A member is required to have a share account (“at least one fully paid up share in the credit union” Section 17,...