The Legal Framework of Consumer Credit Bureaus in the EU: Pitfalls and Challenges. Over-indebtedness, Responsible Lending, Market Integration, and Fundamental Rights

The integration of European Union (EU) credit markets is crucial for the efficient functioning of the EU financial system, for the EU economy as a whole, and for the full achievement of the four freedoms guaranteed by the EU’s internal market.1 Neither the consumer nor the mortgage-credit markets are an exception to this need for integration, and EU policymakers are paying increased attention to them. Concurrently, the market for loans available to consumers—both consumer loans and mortgage-credit loans—has grown rapidly in the last decade across the EU and is becoming increasingly sophisticated. However, the development of retail and mortgage-credit markets has increasingly left European consumers in debt. This growth of consumer indebtedness is becoming a concern for national and EU policymakers alike. First, this Article will review the function of consumer-information sharing and scoring within the EU context. Then, it will present the corresponding institutional arrangements and laws in an attempt to understand if they provide sufficient protection for consumers vis-à-vis responsible lending policies, as well as established fundamental rights and principles enshrined in EU law. Because important legal rights and liberties are involved, this Article ultimately takes the stance that the function of credit bureaus should be to inform the design and use of the underlying information and scoring systems, as well as the institutional form they take. Whether credit bureaus perform a public function or a function in the private interest of credit providers, this distinction makes a very important difference in policy, legal, and institutional terms.