The EU Charter of Fundamental Rights and Consumer Credit: Towards Responsible Lending?

Abstract

This contribution explores the actual and potential impact of the Charter of Fundamental Rights of the European Union (CFREU) on European contract law in the field of consumer credit. Given the growing impact of the CFREU in this area, it is submitted that the debate on the purport of the duty of responsible lending may also be shaped by the fundamental rights enshrined in the Charter. What impact will the introduction of fundamental rights in European contract law have on standards of fairness in the relationship between professional lenders and consumer borrowers? It is certainly the case that the original function of fundamental rights has been to protect the weaker party, i.e. an individual citizen, against the powerful state. But will these rights play a similar role in the contractual setting involving horizontal relationships between private parties, as some commentators have suggested? In particular, will these rights serve to protect consumers against harsh contract terms in credit agreements or otherwise improve the position of consumers vis-a-vis creditors? Or, on the contrary, will those rights serve to defend the interests of creditors? And how will fundamental rights affect a complex balancing exercise between concerns regarding over-indebtedness and those regarding access to credit?