No. If suitability and creditworthiness checks are performed adequately by credit providers, for many borrowers, there should be no need for this extra security. The requirement to have an...
3.8 Article 14(3) of CCD2
Closed19 Sep, 2024, 12:00 - 18 Oct, 2024, 17:00
Article 14(3) provides for a derogation from the general prohibition on tying practices to permit Member States to allow creditors to require the consumer to have a relevant insurance policy in order to guarantee repayment of the credit or to insure the value of the security. This is without prejudice to the right of the consumer to choose his or her own insurance provider offering an equivalent level of guarantee as the insurance policy proposed or offered by the creditor.
Question 8 - Should creditors be allowed to require borrowers to have an appropriate insurance policy as part of the credit agreement for the above purposes?
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Observations
CUMA believes the insurance requirement to be reasonable if justified by the credit risk. While not typically part of loan agreements, products like gadget insurance may become necessary as consumer...
Yes. This is a useful exemption for lenders, as well as facilitating the provision of credit to consumers.
Yes. Currently borrowers drawing down a mortgage must have mortgage protection insurance as required under Section 126 of the Consumer Credit Act 1997 as amended. Credit Union loans (excluding...
On the face of it, we believe the requirement is fair, providing the condition to obtain a policy is reasonable and without such a policy, the proposed loan would be an unacceptable credit risk....