Obligation to assess the creditworthiness of the consumer
Article 18
1. Member States shall require that, before concluding a credit agreement, the creditor carry out a thorough assessment of the consumer’s creditworthiness. That assessment shall be carried out in the interest of the consumer, to prevent irresponsible lending practices and over-indebtedness, and shall take appropriate account of factors relevant to verifying the prospect of the consumer meeting his or her obligations under the credit agreement. 2. Member States shall ensure that credit intermediaries accurately submit the necessary information obtained from the consumer to the relevant creditor in accordance with Regulation (EU) 2016/679 to enable the creditworthiness assessment to be carried out. 3. The assessment of creditworthiness shall be carried out on the basis of relevant and accurate information on the consumer’s income and expenses and other financial and economic circumstances which is necessary and proportionate to the nature, duration, value and risks of the credit for the consumer. That information may include evidence of income or other sources of repayment, information on financial assets and liabilities, or information on other financial commitments. That information shall not include special categories of data referred to in Article 9(1) of Regulation (EU) 2016/679. The information shall be obtained from relevant internal or external sources, including the consumer and, where necessary, on the basis of a consultation of a database referred to in Article 19 of this Directive. Social networks shall not be considered as an external source for the purpose of this Directive. The information obtained in accordance with this paragraph shall be appropriately verified, where necessary through reference to independently verifiable documentation. 4. Member States shall require the creditor to establish procedures for the assessment referred to in paragraph 1 and to document and maintain such procedures. Member States shall also require the creditor to document and maintain the information referred to in paragraph 3. 5. If the credit application is submitted jointly by more than one consumer, the creditor shall perform the creditworthiness assessment on the basis of the joint repayment capacity of the consumers. 6. Member States shall ensure that the creditor only makes the credit available to the consumer where the result of the creditworthiness assessment indicates that the obligations resulting from the credit agreement are likely to be met in the manner required under that agreement, taking into account relevant factors as referred to in paragraph 1. 7. Member States shall ensure that, where a creditor concludes a credit agreement with a consumer, the creditor shall not subsequently cancel or modify the credit agreement to the detriment of the consumer on the grounds that the assessment of creditworthiness was incorrectly conducted. This paragraph shall not apply where it is demonstrated that the consumer knowingly withheld or falsified the information referred to in paragraph 3 provided to the creditor. 8. Where the creditworthiness assessment involves the use of automated processing of personal data, Member States shall ensure that the consumer has the right to request and obtain from the creditor human intervention, consisting of the right to: (a) request and obtain from the creditor a clear and comprehensible explanation of the assessment of creditworthiness, including on the logic and risks involved in the automated processing of personal data as well as its significance and effects on the decision; (b) express the consumer’s own point of view to the creditor; and (c) request a review of the assessment of the creditworthiness and the decision on the granting of the credit by the creditor. Member States shall ensure that the consumer is informed of the right as referred to in the first subparagraph. 9. Member States shall ensure that, where the credit application is rejected, the creditor is required to inform the consumer without delay of the rejection and, where relevant, refer the consumer to easily accessible debt advisory services. Where applicable, the creditor shall be required to inform the consumer of the fact that the assessment of creditworthiness is based on automated processing of data and about the consumer’s right to human assessment and the procedure for contesting the decision. 10. Where the parties agree to change the total amount of credit after the conclusion of the credit agreement, Member States shall ensure that the creditor is required to reassess the consumer’s creditworthiness on the basis of updated information before any significant increase in the total amount of credit is granted. 11. Member States may require creditors to assess the creditworthiness of consumers on the basis of a consultation of the relevant database. However, the assessment of creditworthiness shall not be based exclusively on the consumer’s credit history.