No question that consumer protection is an “institution” that has its justification. Thanks to various institutions in this area, many consumers have been warned in the past of dubious companies along with their offer and so serious financial damage prevented. In addition, under the umbrella of consumer protection in the form of corresponding laws have significantly more rights in complaints, reimbursements, etc. granted. Good thing? But consumer protection also has a downside, which is because the concept of consumer protection can be interpreted quite broadly. After all, the question behind the activity of consumer protection is always: to whom and what does it make sense to protect consumers? It usually gets problematic with consumer protection, especially when legislative institutions are committed to this topic. One of those projects from the ranks of the EU is the so-called ” Residential Property Credit Directive “, which was implemented in Germany on March 21, 2016. The core of this guideline is to protect consumers from over-indebtedness through loans. So far so good! Or not, because, as the practice now shows, this “Residential Property Credit Directive” has certain disadvantages for certain target groups when taking out a loan.
Real estate property no longer counts for lending
The reason for the extreme disadvantage lies in the guideline itself, because it states that banks and savings banks must pay particular attention to the income when checking the creditworthiness. So far, the rule was that, for example, a weak income was upgraded by a corresponding real estate in the application for a loan, this procedure may no longer apply. This means in plain language, who owns a property, but has only a low income, which has the European Union Directive in fact at the banks in the context of borrowing significantly worse opportunities. If you now look at the target group to which such a constellation applies, these are primarily pensioners and young families, in which only one family member has a corresponding income.
Renovation of your own property with a loan? It’s getting harder!
Was until recently still propagated by the banks, which represents the possession of their own property a corresponding value, which serves as a security for any necessary borrowing, the sheet has now turned completely. In this respect, the practice that has been in place since March of this year shows that the topic of consumer protection is certainly a difficult one. What is often well-intentioned, unfortunately proves to be a stumbling block and a handicap in everyday life. In the current case, this not only affects real estate owners with lower incomes, but also the banks, which are virtually taken by law to renew their lending business.