The European Commission proposed the updating and harmonisation of consumer credit rules.
The commission said existing rules, introduced in 1987, have not kept pace with innovations in consumer credit and have largely been overtaken by national regulations.
New EU-wide rules will give borrowers greater transparency and will provide lenders with better ways of assessing borrower risk, it said.
"A new consumer credit directive has long been on the to-do list of actions for building the internal market in financial services and improving opportunities for e-commerce," EU internal market commissioner Ms Frits Bolkestein said.
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