Draft bill on the implementation of the EU Consumer Credit Directive 2023 ‒ new regulatory requirements

On 23 June 2025, the German Federal Ministry of Justice and Consumer Protection published its draft bill to implement the Consumer Credit Directive (EU) 2023/2025 of 18 October 2023 (“Consumer Credit Directive 2023”) together with a synopsis of the amendments. The draft bill introduces significant reforms to consumer credit agreements, which we have addressed separately (see our article). This summary focuses on the regulatory changes proposed in the bill.

Separate authorisation requirement for credit intermediaries under the German Industrial Code (Gewerbeordnung ‒ GewO)

The draft bill incorporates the supervisory requirements of the Consumer Credit Directive 2023 for credit intermediaries into national supervisory law by amending the German Industrial Code (GewO). Specifically, the proposed section 34k GewO creates an independent authorisation requirement for credit intermediaries, who were previously regulated together with real estate agents, property developers, construction supervisors and residential property managers in section 34c GewO.

The authorisation requirement in section 34k GewO shall apply to the professional intermediation of credit agreements or, new in scope, financial accommodation within the meaning of section 506 of the German Civil Code (Bürgerliches Gesetzbuch ‒ BGB). This means, for example, that intermediaries of finance lease agreements, which have so far not been classified as credit agreements under section 34c GewO, will become subject to an authorisation requirement for the first time. Intermediaries of consumer credit agreements relating to immovable property will remain subject to the authorisation requirement under section 34i GewO.

A further substantive change is the restriction of the exemption from the authorisation requirement for credit intermediaries who only arrange credit agreements to finance the sale of goods or provision of services they have concluded, or who demonstrate the opportunity to enter into such agreements. Under section 34d GewO, this exemption shall in future (unlike the current provision in section 34c(5) no. 2 GewO) apply only to traders that qualify as micro, small or medium-sized enterprises within the meaning of Recommendation 2003/361/EC. If the draft is enacted in this form, it is likely to result in the requirement for some business undertaking to apply for a licence.

Similar to the requirements already established for fee-based investment advice in the securities sector, credit intermediaries acting as independent advisers will be prohibited from accepting inducements and must consider a sufficient number of credit agreements available on the market for their recommendations (proposed section 34k(5) GewO).

A further proposed change is the requirement for credit intermediaries to demonstrate appropriate knowledge and competence (Sachkundenachweis), together with a corresponding obligation for ongoing professional training, provided for in Section 34k(6) GewO. This applies to employees who are involved in intermediation or advising on credit agreements or financial accommodation or who are responsible for these activities in a managerial position.

Furthermore, authorised credit intermediaries will in future be required to register in the intermediary register, as is already known for insurance and investment intermediaries (proposed section 11a GewO).

The draft bill provides transitional provisions for the newly structured authorisation requirement for credit intermediaries (section 162 GewO). However, credit intermediaries who already hold an authorisation under section 34c GewO will not be deemed to have been granted authorisation under section 34k GewO; rather, they will benefit from certain privileges in the examination process as part of the authorisation procedure. By 19 November 2026, these authorisation holders must obtain authorisation under section 34k GewO and must be registered in the intermediary register. The same applies to traders who have previously relied on the exemption in section 34c(5) no. 2 GewO but do not fall within the narrower future exemption for micro, small or medium-sized enterprises. 

Stricter requirements for the granting of consumer credit agreements

The draft bill introduces additional regulatory requirements for the granting of consumer credit agreements and financial accommodation (section 18a of the draft amendment to the German Banking Act (Kreditwesengesetz, KWG)). Like the Consumer Credit Directive 2023 itself, the draft bill aims to harmonise the rules for providing general-purpose consumer credit agreements (Allgemein-Verbraucherdarlehen) with those already applicable to consumer credit agreements relating to immovable property (Immobiliar-Verbraucherdarlehen).

Creditworthiness assessment

Under current law, concluding a general-purpose consumer credit agreement requires only that the creditworthiness assessment does not raise significant doubts about the borrower’s creditworthiness. The draft bill now proposes applying the standard already established for consumer credit agreements relating to immovable property, namely that concluding the credit agreement is only permitted if it is likely that the borrower will be able to fulfil their obligations under the credit agreement in accordance with the contract (section 18a(1) KWG). This higher threshold will extend to general-purpose consumer credit agreements.

The draft further requires that, where a consumer credit agreement involves multiple borrowers, creditworthiness must be assessed based on their joint ability to repay (section 18a(1a) KWG ). Such a provision does not currently exist for consumer credit agreements relating to immovable property due to the absence of a similar provision in the Mortgage Credit Directive. However, the draft acknowledges that the Mortgage Credit Directive allows for additional methodological requirements in creditworthiness assessments.

In addition to further harmonising the credit granting process for general-purpose consumer credit agreements with existing provisions for consumer credit agreements relating to immovable property, the draft clarifies the types of information on which creditworthiness assessments must be based (sections 18a(3) and (4) KWG). For all consumer credit agreements, decisions on credit granting must rely on necessary, relevant and accurate information regarding the borrower’s income, expenditure and other financial and economic circumstances. Both internal and external sources may be used, but social networks are excluded. It is emphasised that the information collected must be proportionate to the nature, duration, amount and risks of the credit for the borrower.

A new restriction introduced by the draft is that the information collected for general-purpose consumer credit agreements must not include categories of personal data as defined in Article 9(1) of the GDPR. Such personal data includes data revealing racial or ethnic origin, political opinions, religious or philosophical beliefs or trade union membership. It is not readily apparent why the draft bill does not follow the implementation mandate of the Consumer Credit Directive 2023 to extend the prohibition of discrimination in credit granting to age and gender (Article 6 of the Consumer Credit Directive 2023 and Article 21 of the Charter of Fundamental Rights of the European Union), especially considering that the Directive expressly allows for differentiated treatment based on objectively justified criteria (Article 6(2) of the Consumer Credit Directive 2023).

A new requirement applies to both general-purpose consumer credit agreements and consumer credit agreements relating to immovable property: lenders must now warn the borrower of any specific risks associated with the consumer credit agreement (section 18a(1b) KWG).

The proposed amendments to the creditworthiness assessment requirements will ensure consistency with the relevant civil law provisions (sections 505a to 505d, 511(2) of the draft amendment to the German Civil Code (BGB)). At the same time, these provisions will acquire a supervisory dimension, making them relevant for regulatory audits and the assessment of proper business conduct by credit institutions.

Requirements for the internal organisation of credit institutions

The draft bill also extends the existing requirements on the qualifications of staff involved in approving consumer credit agreements relating to immovable property to staff engaged in approving general-purpose consumer credit agreements (section 18a(6) KWG). The same applies to the requirements for providing risk-appropriate advisory services (section 18a(8) KWG).

A new requirement obliges credit institutions to implement an early warning system for non-performing general-purpose consumer credit agreements and to refer affected borrowers to debt advisory services (section 18a(8c) KWG).

By supplementing the criteria for the appropriate design of remuneration systems in the German Remuneration Ordinance for Institutions (Institutsvergütungsverordnung, InstitutsVergV), the draft bill also aims to ensure that loans are granted in the best interests of the borrower (see section 5(1) nos. 4, 5 and 5a InstitutsVergV).

Supervisory duty for point-of-sale financiers

The Consumer Credit Directive 2023 extends the scope of requirements for general-purpose consumer credit agreements to include certain deferred payment arrangements used for point-of-sale financing such as invoice and instalment purchase agreements. Suppliers of goods and other providers of deferred payment arrangements that fall within the scope of the Directive are considered creditors and, pursuant to Article 37(1) of the Consumer Credit Directive 2023, are subject to supervisory obligations.

With the German Act on the Supervision of Consumer Credit in the Context of Point-of-Sale Financing (Gesetz zur Aufsicht über Verbraucherkredite im Rahmen der Absatzfinanzierung ‒ AbsFinAG) (“Consumer Credit Supervision Act”), the draft bill proposes a corresponding new supervisory framework. However, it does not yet specify which authority will be responsible for supervision. It therefore remains to be seen whether, for example, the German Federal Financial Supervisory Authority (BaFin), similar to the approach taken with the German Secondary Credit Market Act (Kreditzweitmarktgesetz), will be assigned additional responsibilities or whether the authorities responsible for trade supervision will be designated as the competent supervisory bodies.

To subject suppliers of goods and other providers of deferred payment arrangements within the scope of the Consumer Credit Directive 2023 to supervisory requirements, the scope of the Consumer Credit Supervision Act is intended to cover creditors of general-purpose consumer credit agreements or equivalent financial accommodation that are not institutions (i.e. not credit institutions, payment institutions, electronic money institutions or investment firms) (see sections 1 and 2 AbsFinAG). However, institutions may exceptionally fall within the scope of the Consumer Credit Supervision Act if, prior to the transaction, a contractual agreement is made between the institution and an entity normally subject to the Act regarding the assignment of the payment claim against the consumer to the institution, and the underlying contract between the creditor and the consumer is structured according to the institution’s specifications. In such cases, particularly interesting questions of supervisory competence may arise if, during the legislative process, the German Federal Financial Supervisory Authority is not designated as the competent supervisory authority.

Creditors within the meaning of the Consumer Credit Supervision Act are required to register unless they are micro, small or medium-sized enterprises that grant deferred payment arrangements exclusively for the purchase of their own goods or services, provided the deferral is interest-free and subject only to limited charges (section 4 AbsFinAG). Creditors that are already registered in another EEA Member State and act within the scope of that registration are not required to register in Germany.

In substantive terms, creditors will be subject to the supervisory requirements for the granting of consumer credit as set out in section 18a KWG (section 5 AbsFinAG).

Where institutions fall within the scope of the Consumer Credit Supervision Act, they must ensure compliance with all obligations imposed on creditors under the Act and are also subject to extensive reporting requirements (section 6 AbsFinAG).

The draft bill also provides transitional provisions for creditors. These allow companies that were already carrying out the relevant activities before the Consumer Credit Supervision Act entered into force to continue these activities without registration for up to twelve months after the Act takes effect. However, this does not constitute an exemption from the substantive requirements of the Act. The same is intended to apply to the registration obligation for institutions.

Conclusion

The draft bill contains several new supervisory requirements that are of practical relevance for both real economy companies and institutions.

Real economy companies should already be reviewing their business models to determine whether in future they will require authorisation as credit intermediaries or providers of financial accommodation or whether, as providers of deferred payment arrangements, they will be subject to a registration requirement under the new Consumer Credit Supervision Act.

Credit institutions should, in light of the requirement set out in the Consumer Credit Directive 2023 to transpose the Directive into national law by 20 November 2025, already be making the necessary adjustments to their processes for granting consumer credit.

Although interested parties may submit comments on the draft bill until 18 July 2025 before the Bundestag considers it, no fundamental changes are expected since most provisions of the draft bill are intended to implement the Consumer Credit Directive 2023. It can therefore be expected that the key provisions of the draft bill will, as provided in Article 48 of the Consumer Credit Directive 2023, generally enter into force on 20 November 2026.