Consumer Credit Directive (CCD II) tightens rules for the banking industry

The revised Consumer Credit Directive fundamentally reorganizes the consumer credit business. From November 20, 2026, an extended scope of application and significantly stricter requirements will apply – not only for retail banks, but also for companies with strong B2C sales financing.

These are the most important facts:

• Legislative process for implementation underway: In September 2025, the German government submitted the draft for the implementation of the Consumer Credit Directive to the Bundestag; the legislative process is expected to be completed in the first quarter of 2026.

• Broad target group: CCD II applies equally to retail banks and corporates without a banking license. Consumer protection is not linked to whether the loan is granted by a credit institution. Particular focus: B2C sales financing for consumer goods, retail and e-commerce companies. BaFin receives extended supervisory powers.

• Extended scope of application: In future, buy-now-pay-later (BNPL), interest-free loans, microloans of less than EUR 200 and short-term merchant loans will also be covered. This means that numerous previously unregulated payment and financing models will be subject to the full consumer protection standard.

• Urgent need for action: Banks and corporates should carry out an early review of their credit and financing solutions – particularly with regard to creditworthiness processes, information and advertising requirements, product design, oversight of sales partners and IT-supported workflows.

Expanded definition of credit: CCD II covers modern financing models

The consumer credit market has changed fundamentally since CCD I: Digital, atypical forms of financing (for example BNPL, interest-free merchant loans, instant check-out financing) are relevant for consumers, but have so far been largely outside the scope of the law.

This is precisely where the new Consumer Credit Directive comes in: A “loan” does not only exist when a bank grants credit. Any form of financial assistance – regardless of whether it is provided by a credit institution or a company – can fulfill the definition of a loan under CCD II. Example: Even an interest-free “pay-in-5” installment model from a retailer is considered a loan and triggers the full regulatory obligations. The concept of a loan under civil law is considerably expanded.

The most important innovations at a glance

1. BNPL and interest-free loans: rules for previously unregulated models. CCD II covers BNPLs, microloans and interest-free loans for the first time. These are considered traditional consumer loans – with far-reaching consequences for creditworthiness checks, information obligations, advertising requirements and regulatory market monitoring by BaFin. Example: Telcos with 0% installments when purchasing devices are effectively treated as lenders.

2. Overdraft facilities: Increased information requirements for overdrafts. Overdraft facilities remain regulated consumer loans. Institutions must provide clear and comprehensible information about costs, contractual penalties and risks at an early stage; extended information obligations apply in the event of persistent overdrafts.

3. Forbearance obligationsSystematic debt relief review. In the event of consumers experiencing financial difficulties, lenders must review and transparently document appropriate relief measures (e.g. deferral, repayment adjustment, debt rescheduling). Forbearance requirements are transferred from supervisory law to consumer credit law and extended.

4. Credit scoring: transparency and methodology. It is no longer enough to have “no doubts” about solvency. The probability of repayment must be determined systematically and on the basis of comprehensible criteria – even for BNPL and zero percent dealer financing. Transparency regarding the data basis and decision-making logic must be established for automated decisions.

5. Text form: Digitization push with limits. In future, general consumer loans can be concluded in text form. This facilitates the digital conclusion of contracts and reduces bureaucracy.

6. Remuneration systems. Remuneration systems must be designed in such a way that incentives do not conflict with acting in the best interests of the borrower – particularly in the case of employees in lending and consulting.

7. Credit intermediaries. Credit intermediaries – such as retailers who broker zero-percent financing with partner banks – are subject to extensive information/advice obligations and may be subject to stricter licensing requirements.

What new obligations will lenders and credit brokers face?

The Consumer Credit Directive significantly increases the regulatory requirements for the sale of consumer loans – for banks as well as for retailers, FinTechs and corporates. The key new obligations include in particular

1. Clear and timely consumer information. Lenders must provide transparent, complete and easily understandable information before the contract is concluded.
2. Creditworthiness check also for very small amounts. The review requirement now also applies to small financing amounts of less than EUR 200 as well as to BNPL models or zero percent dealer financing.
3. Transparency about the basis for decisions. In the case of automated or algorithmic credit decisions, providers must disclose what data is processed and what criteria are used to make decisions.
4. Expertise and training requirements. Employees who broker or advise on loans must have verifiable qualifications; companies must implement appropriate training.
5. Stricter advertising guidelines. Advertising must not be misleading or create false incentives; information on risks and costs must be clearly communicated.
6. Possible licensing and registration requirements. Companies that offer or broker credit products may be subject to a licensing or registration requirement in future, depending on the model.
7. Comprehensive documentation and verification obligations. All relevant processes – from information and decisions to audits – must be documented in a traceable manner.

How affected companies should prepare for the Consumer Credit Directive

• Carry out an in-depth analysis and a structured impact assessment. Companies should examine the extent to which CCD II covers their existing or planned business model, which financing offers will be considered regulated loans in the future and which legal, operational and regulatory risks will arise as a result.
• Develop a clear target image and systematically plan its implementation. Based on the analysis, prioritized fields of action should be identified, a regulatory target picture defined and a coordinated project and action plan developed that involves all affected areas – from sales and legal to compliance and IT.
• Clarify and support the regulatory classification at an early stage. Companies should determine their role under CCD II – for example as lenders or credit intermediaries – with legal certainty, have potential licensing or registration obligations checked and conduct the exchange with BaFin in a prepared and professionally accompanied manner.
• Ensure the operational implementation of the new requirements. Contract documentation, online routes, checkout processes and advertising materials must be revised and adapted to the new legal requirements; in addition, robust procedures for checking creditworthiness must be developed and technically implemented.
• Strengthen organizational structures and establish training measures. Companies should adapt their internal governance, define clear responsibilities and set up targeted training and qualification measures in order to meet the increased expertise and compliance requirements in the long term.