MEPs (Members of the European Parliament), along with the British Bankers Association, the Building Societies Association and Council of Mortgage Lenders are accusing the EU Commission of folly over proposals to change the way credit is offered.
In simple terms, part of the proposals will restrict how much credit people can obtain by enforcing stricter rules before you can offer credit.
MEPs and others are warning that this could lead to higher interest rates and higher charges in view increased admininstration costs.
Our view
The EU commission has a duty to protect the consumer, in most cases from themselves, as well as from unscrupulous lenders. Of course the lenders will protest, it may mean that they have to become more competitive to attract a greater share of a smaller market.
There is a danger though that restricting spending/borrowing will have a negative impact of Euro economies.
What will people do? Borrow from outside the EU!