INTRODUCTION

Consumer credit is ‘a basic element of participation in the economic life of modern society’. Access to credit in the form of a deferred payment, (mortgagebacked) loan or other similar financial accommodation enables consumers to meet their basic needs, such as buying a family home, obtaining education or receiving health care. Consumer credit is also an important element of the EU economy. A consumer's ability to borrow money easily allows markets to function more efficiently and stimulates economic growth. Yet the wide availability and use of credit by consumers also have a dark side – consumers run the risk of becoming over-indebted and failing to meet their obligations under the credit agreement.

It is certainly true that over-indebtedness and loan default can be caused by a number of factors, in particular a change of life circumstances after credit is granted. Particularly in the aftermath of the global financial crisis, however, it cannot be denied that irresponsible lending practices by certain market actors, which allowed consumers to fall victim to disproportionate credit-related commitments that they were unable to meet, have significantly exacerbated the problem. At the micro-level, such practices may have a dramatic impact not only on the consumer's financial situation, but also on his or her individual and family well-being, especially when losing a family home. At the macro-level, irresponsible lending to consumers may contribute to a housing bubble and undermine consumer confidence in the financial system; this in turn may not only adversely affect the financial markets but also have potentially severe social and economic consequences.

It is not surprising, therefore, that the post-crisis era has witnessed growing attention to the duty of responsible lending as a regulatory technique of consumer protection in the credit market. The thrust of this duty is that lenders must assess whether a consumer borrower can afford to meet repayments in a sustainable manner; in this sense, it goes beyond a mere determination of whether lenders will recover their money in case of the borrower's default. However, the concept of responsible lending poses problems of definition and has been subject to continuing regulatory debate at both EU and Member State level.