The bill of law implementing the new consumer credit directive: balancing enhanced borrowers’ protection in credit agreements while avoiding unnecessary burdens for lenders
On 19 February 2026, bill of law 8708 implementing Directive (EU) 2023/2225 on credit agreements for consumers and repealing Directive 2008/48/EC (the “Bill of Law”) was filed with Parliament.
The Bill of Law aims notably at broadening the information provided to consumers in the context of the provision of consumer credits and enhancing consumer protection. It amends i.a. the Consumer Code in this respect.
Scope of the Bill of law
The scope of the chapter of the Consumer Code regarding consumer credit contracts is amended by the Bill of Law. The new scope now excludes the following consumer credit agreements:
- credit agreements secured by a security on immovable property;
- credit agreements over EUR 100,000, with the exception of loans over this amount taken out to renovate residential properties and which are not backed by a security;
- rental or leasing contracts where the obligation or option to purchase the object of the contract is not provided for either in the contract itself or in a separate contract;
- deferred payments, e.g. “buy-now-pay-later” schemes, under specific conditions; and
- certain deferred debit cards provided by a credit or payment institution, with a reimbursement period of 40 days, free of interest and with only limited charges for the provision of the payment service.
The Bill of Law further extends the scope of application to include i.a.
- credit agreements providing for the granting of an overdraft facility, repayable within one month;
- credit agreements with no interest and no other charges;
- credit agreements under which the credit must be repaid within a period not exceeding three months and for which only negligible charges are required; and
- rental or leasing agreements with a purchase obligation or option.
Conditions to the granting of credit agreements
The granting of consumer credits to consumers residing within the European Union (“EU”) must not be made contingent upon, nor may their terms or conditions be varied by reference to, a consumer’s nationality, habitual residence, or any other characteristic protected under Article 21 of the Charter of Fundamental Rights of the EU. Differential terms of access to consumer credits may be offered only where, and to the extent that, they are justified by objective criteria.
The granting of consumer credits without a consumer’s prior request and express consent is strictly prohibited. The Bill of Law now also prohibits the practice of tying the sale of consumer credits with other financial services. Exceptions to this prohibition include the possibility for the lender to ask the consumer (i) to open an account intended, in particular, for the accumulation of capital allocated to the repayment of the loan and (ii) to subscribe an insurance policy.
The Bill of Law also introduces the concept of “right to be forgotten” (“Droit à l’oubli”). Personal data relating to the diagnosis of oncological diseases of consumers shall not be used for the purposes of determining an insurance policy premium relating to a consumer credit contract under certain conditions, Further, a “right to be forgotten” in relation to oncological diseases is acknowledged, allowing consumers who have suffered from a cancerous pathology to avoid declaring this pathology under certain conditions.
The Bill of Law further sets out additional requirements regarding advertising and marketing materials of consumer credits, which must contain fair, clear and non-misleading information, including mandatory warnings on the fact that borrowing money costs money. Advertising and marketing must not lead the consumers to believe that a consumer credit improves their financial situation.
The Bill of Law further includes new mandatory general information requirements. Lenders or credit intermediaries are required to make available to consumers, on a permanent basis and on paper or any other durable medium previously chosen by the consumer, clear, intelligible, and comprehensive general information relating to credit agreements, as specifically enumerated under the new Article L. 224-5-1 of the Consumer Code. In addition to this general obligation, lenders or credit intermediaries are required to provide, on the one hand, pre-contractual information strictly defined as to its content, form, and the time of delivery, and, on the other hand, adequate explanations regarding both the credit agreement and any ancillary services that may be offered, in order to enable the consumer to assess the suitability of the offer in light of their needs and financial situation. It is also expressly permitted that personalised offers may be prepared by means of automated processing of personal data.
Lenders or credit intermediaries may provide advisory services consisting in identifying the most appropriate credit agreement and formalising a reasoned recommendation for the benefit of the consumer. Such advisory services and requirements applicable thereto are described in the Bill of Law and included under a new Article L. 224-10-4 of the Consumer Code.
Prior to the conclusion of any contract, the lender is required to conduct a rigorous, comprehensive, and documented assessment of the consumer’s creditworthiness (the “Assessment”), in the interest of the consumer and in order to prevent irresponsible lending and any risk of over-indebtedness. While this requirement already existed previously, the new formulation of Article L. 224-10 of the Consumer Code goes beyond previously applicable requirements. In particular, the Assessment must take into account all relevant factors enabling verification of the likelihood that the consumer will fulfill the obligations arising from the credit contract, based on information collected from appropriate internal or external sources, including the consumer’s statements and, where applicable, information provided by the credit intermediary. The lender must retain a written record of the methodology and data used. Consumer credits may only be granted if the outcome of the Assessment reasonably indicates that the contractual commitments will be duly honored. In the event of a refusal to grant the credit based on the Assessment, the lender informs the consumer, without undue delay and free of charge, and specifies notably the categories of data that were taken into account in case the Assessment was based on the use of databases.
The statutory withdrawal period is significantly extended where the consumer has not received all the contractual terms and mandatory information required to be included in the credit agreement: in such case, the statutory withdrawal period is set at twelve months and fourteen days after the conclusion of the credit agreement. This period shall not apply in case the consumer was not informed of the right of withdrawal.
Balanced approach
Finally, it should be noted that Luxembourg has chosen to exercise certain options left to the discretion of Member States by Directive (EU) 2023/2225, such as (i) the exclusion of certain deferred debit cards provided by credit or payment institutions from the scope of the Consumer Code, (ii) the exclusion of the Assessment for overdraft facilities, and (iii) the exclusion of the application of a limited number of provisions relating to advertising, pre-contractual information and contractual information for three limited categories of loans. Thereby, the Bill of Law confirms that Luxembourg legislators used a nuanced and balanced approach to enhance borrowers’ protection in credit agreement while avoiding further burdens for lenders.
The Bill of Law currently provides for an entry into force of the law on 20 November 2026.
Should you have any questions on the above, please do not hesitate to contact one of our experts of the regulatory team.
