Government publishes bill for the implementation of the Consumer Credit Directive 2023

On 3 September 2025, the Federal Ministry of Justice and Consumer Protection (Bundesministerium der Justiz und für Verbraucherschutz) published the government bill for the implementation of the Consumer Credit Directive (EU) 2023/2225 of 18 October 2023 (CCD 2023). The bill builds on the earlier draft bill published on 23 June 2025. Specifically, this means that in consumer credit law, the government bill adopts the proposals from the earlier draft without any significant changes. The new provisions proposed in relation to financial supervision law have also been adopted in the bill and have been developed further only in terms of details and questions of responsibility compared to the earlier draft.

I. Proposed changes to consumer credit law

The significant changes to consumer credit law that were already proposed in the earlier draft have been consistently adopted in the government bill (see part 10 of the information paper from the Federal Ministry of Justice and Consumer Protection). These changes mainly concern the following provisions (for details, see our article on the earlier draft bill).

• Expansion of scope in the case of standard consumer credit agreements: In future, consumer credit law will also apply to interest-free and short-term loans, as well as loans under €200 and corresponding deferrals of payment (proposed section 491 of the German Civil Code). This will mean that “buy now, pay later” models in particular will be more strictly regulated. Exceptions are laid down for purchases on account. However, the exemption for large online providers is narrowly defined (proposed section 506(1), sentence 2 no. 4 and, sentence 3 of the German Civil Code).
• Stricter rules for overdraft facilities: A right of withdrawal is envisaged for authorised overdrafts (proposed section 504 of the German Civil Code). In addition, for authorised and tolerated overdrafts, there will be information obligations in the event of intended termination as well as the possibility to pay in instalments to avert compulsory enforcement (proposed sections 504(2) and 505(5) of the German Civil Code).
• Standard consumer credit agreements will no longer have to be in writing: When entering into a standard consumer credit agreement, text form (section 126b of the German Civil Code) will suffice in future instead of writing (section 126 of the German Civil Code) (proposed section 492(1), sentence 1 of the German Civil Code).
• Stricter credit checks: Granting loans, including for standard consumer credit agreements, will in future only be permitted if loan repayment is likely (proposed section 505a(1), sentence 2 of the German Civil Code). In addition, stricter regulation will govern which information may be used as the basis for the credit check (proposed section 505b(2), sentence 2 and subsection (3), sentence 1 of the German Civil Code).
• Leniency measures must be offered: It is also stipulated that, before initiating enforcement measures, the lender is obliged to exercise reasonable leniency in favour of the borrower if this is appropriate in the circumstances (proposed section 497a(2) of the German Civil Code).
• Maximum withdrawal period and removal of the presumption of lawfulness: Finally, a maximum withdrawal period of twelve months and fourteen days from the conclusion of the contract is to be introduced, with the period only beginning once information has been provided in accordance with Art. 247, section 6(1), sentence 1, no. 17 and subsection (2), sentences 1 and 2, of the Introductory Act to the German Civil Code (proposed section 356b(2), sentence 5 of the German Civil Code). The reference to “legally compliant” information, which was included in the draft bill, is no longer present in the government bill (see draft bill, p77; government bill, p81). The legal presumption of lawfulness is to be removed without replacement.

II. Proposed changes to financial supervisory law

The government bill also draws on the proposals relating to financial supervisory law set out in the draft bill (for details of the financial supervisory provisions, see our corresponding article on the draft bill). However, these proposals are, in part, further developed and modified in the government bill. The following points are particularly noteworthy in this regard:

Independent licensing requirement for intermediaries of standard consumer credit agreements and financing assistance (proposed section 34k of the German Industrial Code (Gewerbeordnung ‒ “GewO”)).

• As already provided for in the draft bill, an independent, albeit not materially new, licensing requirement for the commercial intermediation of consumer credit agreement and financing assistance is to be introduced under the proposed section 34k GewO. The government bill clarifies that the licensing requirement only applies to intermediation in return for remuneration, which may consist of a cash payment or another agreed economic benefit. At first glance, this seems surprising, as the requirement for commercial activity already presupposes an intention to make a profit. The explanatory notes to the legislation use as an example the case of a commercial agent who, on behalf of a company, arranges sales of goods and receives remuneration exclusively for the sale of goods and (presumably this should be added) not also indirectly for brokering a related loan. Thus, in future, the mere pursuit of an indirect economic advantage is unlikely to trigger the licensing requirement for loan intermediation.
• Compared to the draft bill, the material scope of the licensing requirement for loan intermediation is restricted when it relates solely to consumer credit agreement and financing assistance. The previous licensing requirement for the intermediation of corporate loan agreements (section 34c(1) no. 2 GewO) is thus to be abolished in future, as is explicitly stated in the explanatory notes to the legislation.
• As already set out in the earlier draft, the authorisation requirement is to be waived for traders who carry out relevant activities solely to finance the sale of goods or provision of services they have concluded, and who qualify as micro, small or medium-sized enterprises (proposed section 34k(4) no. 3 GewO).
• For practical purposes, it may be helpful that the government bill’s explanatory memorandum makes it clear that “recommenders” who merely put potential borrowers in contact with lenders, or refer them to a credit intermediary, are not subject to the authorisation requirement.
• A new feature compared to the earlier draft is that the roles of fee-based credit advisor and credit intermediary are now mutually exclusive (proposed section 34k(5), sentence 2 GewO). The requirement remains that fee-based credit advisors must consider a sufficient number of contracts available on the market for their recommendations, may not accept incentives from the lender, and must not be dependent on the lender in any way (proposed section 34k(5), sentence 1 GewO).
• As previously set out in the draft bill, intermediaries and fee-based credit advisors requiring authorisation will in future be subject to a registration requirement in the intermediary register (proposed section 11a GewO). This requirement also includes the registration of those responsible for management in the intermediary and advisory activities (proposed section 34k(8) GewO).
• With regard to proof of expertise and the obligation for ongoing training, the government bill introduces certain facilitations compared to the earlier draft. For the proof of expertise required to obtain authorisation (namely, passing an exam at the Chamber of Industry and Commerce), it is sufficient if such proof is provided for a reasonable number of natural persons employed by the applicant, who are responsible for supervising those directly involved in authorised activities and who have authority to represent the applicant (proposed section 34k(3), sentence 2 GewO). This facilitation also applies to the obligation for ongoing training (proposed section 34k(6), sentence 3 GewO). However, these facilitations do not apply when the trader is a natural person and personally carries out the authorised activities or is responsible for these activities in the management of the business (proposed section 34k(3), sentence 3 GewO and proposed section 34k(6), sentence 4 GewO).
• The transitional arrangements in the government bill are more generous than those in the earlier draft. According to the government bill, holders of authorisation under section 34c GewO must apply for the new authorisation under the proposed section 34k(1) GewO for intermediation of standard consumer credit agreements and financing aids by 31 May 2027, and must promptly register themselves and any persons to be listed after authorisation is granted (proposed section 162(1) GewO). For these traders, renewed checks on reliability and orderly financial circumstances are generally not required (proposed section 162(2) GewO). If they have been continuously active since 1 January 2021, the requirement for the professional competence exam is also waived, subject to appropriate proof (proposed section 162(3) GewO). If no application for the new authorisation is submitted by 31 May 2027, the existing authorisation will expire on 19 November 2027. The deadline of 31 May 2027 also applies to traders who, solely to finance sales of goods or provision of services they have arranged, arrange loan agreements or provide evidence of opportunities to enter into such agreements, and who do not qualify as micro, small or medium-sized enterprises (proposed section 162(4) GewO).

New registration requirement and oversight of point-of-sale financiers

• As already set out in the earlier draft, the government bill introduces, 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”), supervision of lenders of standard consumer credit agreements and financing aids within the framework of sales finance (proposed section 1 of the Consumer Credit Supervision Act). Under this regime, lenders/point-of-sale financiers are subject to a registration requirement, unless an exemption applies (for example, for micro-enterprises or small and medium-sized enterprises that grant payment deferrals solely for the acquisition of goods or services they offer, and where the deferral is interest-free and provided with limited costs (proposed section 4 of the Consumer Credit Supervision Act)). Nevertheless, these entities must comply with the regulatory requirements for granting consumer loans and remuneration provisions accordingly (see below).
• For institutions that agree in advance with a lender/point-of-sale financier on the assignment of payment claims against the consumer, and where the contract concluded between the lenders/point-of-sale financiers and the consumer is structured according to the institution’s specifications, reporting and registration obligations apply (as was already set out in the earlier draft). Such institutions are also required to fulfil the obligations applicable to lenders/point-of-sale financiers (see proposed section 6 of the Consumer Credit Supervision Act).
• The government bill clarifies the question left open in the earlier draft regarding which authority will be responsible for supervising compliance with the provisions of the Consumer Credit Supervision Act. This responsibility is assigned to the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) (proposed section 3(1) of the Consumer Credit Supervision Act). The German Federal Financial Supervisory Authority will be equipped with extensive powers for effective supervision, modelled on its existing powers under other supervisory laws.
• A new feature of the government bill is a set of fines which classifies intentional or negligent breaches of certain provisions of the Consumer Credit Supervision Act as administrative offences which can be punished with fines of up to €500,000 (see proposed section 8 of the Consumer Credit Supervision Act). Similar to the German Federal Financial Supervisory Authority’s publication powers under other legislation, the government bill provides that the German Federal Financial Supervisory Authority will generally publish its measures and fine decisions on its website (proposed section 9 of the Consumer Credit Supervision Act).
• A transitional period of up to twelve months after the proposed Consumer Credit Supervision Act becomes law is envisaged for registration and notification obligations under that Act (proposed section 10).

Stricter requirements for granting consumer loans, credit checks, and requirements for the internal structure of credit institutions

• The government bill adopts the recommendations from the earlier draft regarding stricter requirements for granting consumer loans, running credit checks, and the internal structure of credit institutions. This means that the requirements for granting standard consumer credit agreements will be aligned with the standards already applicable to consumer loans relating to immovable property.
• In future, standard consumer credit agreements will only be granted following a stricter credit check. The credit check must show it is “likely” the borrower can meet their obligations (previously, “no significant doubts” were sufficient; see the proposed section 18a(1) of the German Banking Act (Kreditwesengesetz, KWG)). For loans with multiple borrowers, the creditworthiness must be assessed based on their joint ability to repay (proposed section 18a(1a) of the German Banking Act). Decisions on the granting of credit must be based on necessary, relevant, and accurate information about the borrower’s income, expenses, and other financial and economic circumstances, with the information requested being proportionate to the nature, term, amount, and risks of the loan for the borrower (proposed section 18a(4) of the German Banking Act, p201 of the government bill). Internal and external sources may be used to obtain this information, but social networks may not (proposed 18a(3) of the German Banking Act, p201 of the government bill). These proposed changes will bring the civil law provisions into alignment.
• Credit institutions will be required to warn borrowers if a consumer credit agreement may pose a specific risk to the borrower, taking into account the borrower’s financial situation (proposed section 18a(1b) of the German Banking Act).
• The qualification requirements for staff involved in granting consumer loans relating to immovable property are to be extended to standard consumer credit agreements (proposed section 18a(6) of the German Banking Act). The same applies to the requirements for risk-appropriate advisory services (proposed section 18a(8)).
• Furthermore, under the provisions of the government bill, credit institutions must have appropriate strategies and procedures in place to identify borrowers of standard consumer credit agreements who are experiencing financial difficulties at an early stage; they will also be required to refer such borrowers to debt counselling services (proposed section 18a(8c)).
• The proposed changes also include – as already set out in the earlier draft – an amendment to the German Remuneration Ordinance for Institutions (Institutsvergütungsverordnung – InstitutsVergV). Remuneration for employees involved in granting loans and advising clients must not run counter to the aim of acting in the best interests of the borrower (proposed section 5(1) nos. 4 to 5a of the Remuneration Ordinance).

III. Outlook

The Bundestag will now debate the bill. The corresponding act must be passed by 20 November 2025 in order to meet the implementation deadline for the CCD 2023. According to Article 48(1) of the CCD 2023, the new rules must be applied from 20 November 2026. With regard to financial supervision requirements, the transitional periods for applying for authorisation for intermediary or fee-based credit advisory activities under the proposed section 34k(1) GewO (by 31 May 2027 at the latest) and for registration and notification under the proposed Consumer Credit Supervision Act (up to twelve months after the Consumer Credit Supervision Act becomes law; this is expected to be by 20 November 2026) will be of particular practical importance. Companies in the real economy as well as financial institutions should promptly review their business models to determine how the upcoming changes will affect their regulatory and civil law obligations, so as to take the necessary steps in good time.