Search
Contact
Bankberaterin berät zwei Kunden
13.05.2026 | KPMG Law Insights

What the new Consumer Credit Directive means for retail banks

The new Consumer Credit Directive (CCD II) tightens the requirements for the granting of consumer loans for retail banks. Read this article to find out what retail banks will have to consider when granting and marketing loans from November 20, 2026 and what liability traps they may face.

The most important changes for retail banks

CCD II significantly tightens the requirements for granting consumer loans. In particular, retail banks will be faced with changes in the areas of overdrafts, creditworthiness checks, revocation rights, forbearance obligations and the marketing of credit products.

Stricter requirements for overdraft facilities

In future, both granted and tolerated overdrafts will be subject to stricter requirements. If there is a granted overdraft facility, the lender must in future inform the consumer on a monthly basis about the main conditions of the overdraft, in particular about the debit interest rate applied and the current balance. If the bank intends to terminate or partially terminate an overdraft facility, extended information obligations also apply – both for granted and tolerated overdrafts. The borrower must be informed of the intended termination or restriction at least 30 days before the termination or reduction takes effect.

Stricter requirements for creditworthiness checks

In future, general consumer loan agreements will be subject to significantly stricter requirements for creditworthiness checks. While it was previously sufficient that there were no “significant doubts” about the borrower’s ability to fulfill the contract, in future the lender must positively determine that it is likely that the borrower will be able to meet their obligations under the loan agreement.

In future, a creditworthiness check must also be carried out for tolerated overdrafts. However, the obligation to check is not linked to each individual overdraft, but only arises prior to the agreement of a fee for tolerating the overdraft.

Special requirements must also be observed in future when granting overdraft facilities. As consumers are legally entitled to repay the overdraft facility they have drawn down in twelve equal monthly installments, the creditworthiness check should ensure that the amount used can be repaid from the freely disposable monthly income within a maximum of twelve months.

In addition, the permissible scope of data for credit scoring will also be more strictly regulated in future. In particular, no special categories of personal data within the meaning of Art. 9 GDPR may be used. This expressly excludes the use of particularly sensitive information – such as health, religious or ideological beliefs or ethnic origin.

Right to information in the case of automated credit checks

If credit checks are carried out automatically, consumers have a legal right to human decision-making. Consumers can also demand that the lender disclose the decision-making logic.

The nationally defined rights to information are also continuously flanked by directly applicable European law. In future, banks will also have to reckon with claims for information on the basis of Art. 86 of the European AI Regulation. This provision grants affected consumers who are the subject of an automated credit assessment an independent right to a human review of the decision and to a comprehensible explanation of how the AI system used works and the relevant decision parameters.

Changes in the area of the right of withdrawal

The previous model revocation information in Annex 7 of the Introductory Act to the German Civil Code (EGBGB) will be deleted without replacement; the fiction of legality created by this will therefore no longer apply. In practice, this initially means increased legal uncertainty, as lenders must independently ensure the legality of their withdrawal information. In addition, there will be a “reminder obligation” in future. If the revocation information is provided less than one day before the contractual declaration is submitted, the lender must provide a separate reminder between one and seven days before the right of revocation expires.

The reminder obligation is particularly important in the distance selling of consumer loans, as there are often less than 24 hours between the signing of the loan agreement and the provision of the pre-contractual information.

Forbearance obligations (“duties of care”)

In the event of consumers experiencing financial difficulties, lenders must examine appropriate relief measures (e.g. deferral, repayment adjustment, debt restructuring) and document them transparently. In particular, more lenient measures must be examined before foreclosure proceedings are initiated to enforce the borrower’s claims. While in the past these so-called duties of forbearance were primarily structured under supervisory law in the German Banking Act (KWG ), the legislator has now created a civil law claim in the form of Section 497a of the German Civil Code (BGB), which borrowers can invoke if they get into financial difficulties.

Adjustments under unfair competition law

In future, the legislator will also tighten the requirements for the marketing of credit products in terms of unfair competition law. To this end, a separate misleading offense will be introduced for credit advertising. From November 20, 2026, it will in particular be illegal to specifically encourage consumers to take out a loan, for example by giving the impression that a loan could improve their financial situation or lead to a higher standard of living.

Amendments to the Remuneration Ordinance for Institutions

In future, there will also be stricter requirements in the area of the Remuneration Ordinance for Institutions. Among other things, this stipulates that the remuneration of employees may not be linked to sales targets in relation to consumer loan agreements. Furthermore, the remuneration of employees responsible for assessing creditworthiness may not be made dependent on the number or proportion of approved applications.

Stricter registration obligations under the Sales Financing Supervision Act

The newly created Sales Financing Supervision Act (AbsFinAG) also establishes stricter legal obligations for credit institutions that conclude factoring agreements with companies that are not KWG institutions. The systematic purchase of receivables will in future be subject to an extended regulatory framework, which in particular includes registration and reporting obligations vis-à-vis the German Federal Financial Supervisory Authority (BaFin).

New liability dimension through the CCD II

The German implementation of CCD II significantly increases the liability risks for lenders. Numerous obligations that were previously primarily characterized by supervisory law – such as the forbearance obligations anchored in Section 18a KWG – are now flanked by civil law and are therefore becoming increasingly important in the consumer credit business. Violations can therefore not only result in supervisory measures. Consumers can also assert these directly, for example in the form of claims for damages, objections or reversals.

Particularly in the area of forbearance obligations, the legislator does not tolerate half-heartedness. If there is a breach of the obligation to check and document appropriate forbearance measures, there is a risk of severe sanctions: In addition to the civil liability of the asserted claim, the law also provides for fines of up to 50,000 euros or – in the case of larger lenders – up to 4 percent of annual turnover if this exceeds 1.25 million euros.

There are also other economically relevant liability consequences. For example, acting in breach of duty in connection with consumer loans can lead to the partial or complete loss of interest and cost claims. At the same time, the risk of warnings and injunctions increases considerably, particularly in the event of breaches of the new fairness regulations on credit advertising.

Retail banks face three key areas of action until November 20, 2026

1. reorganize overdraft, overdraft facility and consumer credit processes

Retail banks should comprehensively review and adapt their products and processes for granted and tolerated overdrafts and overdraft facilities. This includes, in particular, the introduction of monthly information requirements, adapted termination and advance notice processes as well as creditworthiness checks to ensure that loans in general and overdraft facilities in particular can be repaid from freely disposable income within at least twelve months.

2. make credit scoring, database and automation legally compliant

The new requirements require a fundamental review of existing creditworthiness models, data sources and scoring logics. Retail banks should ensure that the positive probability standard is adhered to, that sensitive data as defined by the GDPR is excluded and that automated decisions are designed in such a way that information claims, transparency obligations and human review can be fulfilled in a legally secure manner.

3. consistently redesign forbearance, revocation and marketing processes

Against the backdrop of the enforceability of forbearance obligations under civil law, the increased requirements for revocation information including the obligation to send reminders and the stricter requirements under fair trading law, banks should review their end-to-end processes along the entire credit life cycle. In particular, this includes receivables management, standardized and documented follow-up decisions as well as the legally compliant design of all marketing and sales measures.

 

Read here how KPMG Law can support retail banks in implementing the new rules.

Explore #more

20.10.2026 | In the media

KPMG Law Guest Column in it daily: The Business Judgment Rule and the Use of AI

The rapid advancement of artificial intelligence presents corporate leadership with diverse and far-reaching decisions. These decisions concern not only the selection and deployment of appropriate…

19.10.2026 | In the media

New articles have been published in PERSONALFÜHRUNG

The current issue of PERSONALFÜHRUNG (10–11/2026) features two articles by female experts from KPMG and KPMG Law. In the article “Will AI Save the Day?…

15.10.2026 | KPMG Law Insights

Faster Building Permits – Legal Options for Businesses

Planning and permitting procedures do not always have to delay construction projects. The law provides several options for expediting the process. To take advantage of…

09.10.2026 | KPMG Law Insights

Claims Management for Cyber Incidents: How Insurers Actively Manage Claims

Cyber incidents are among the most complex claims scenarios for insurers. Ransomware attacks, in particular, can paralyze entire IT infrastructures—with enormous financial consequences. Insurers for …

08.10.2026 | In the media

KPMG Law Guest Column in AUTOHAUS: Consumer Credit Directive: Sales Under New Circumstances

Car dealerships should use the time remaining before the new Consumer Credit Directive takes effect to systematically review their financing and sales processes for regulatory…

08.10.2026 | In the media

KPMG Law Interview with HAUFE: Even If AI Makes a Mistake, the Board of Directors Is Still Liable

AI analyzes, makes recommendations, and helps make decisions. But who bears the consequences if it’s wrong? KPMG Law experts Nikolaus Vincent Manthey and Sabrina Riesenbeck…

30.09.2026 | KPMG Law Insights

Mixed-Use Real Estate as an Opportunity for Downtown Areas

Downtown areas should be vibrant, sustainable, and attractive. But the traditional business model behind them—retail—is becoming less and less viable. Rents are high, customers are…

28.09.2026 | Deal Notifications

KPMG Law and KPMG are advising Rohde & Schwarz on the acquisitions of NEOSAT and PHYTRONIC

KPMG Law Rechtsanwaltsgesellschaft mbH (KPMG Law) and KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG) advised the Munich-based technology group Rohde & Schwarz on its acquisitions of NEOSAT GmbH…

28.09.2026 | Deal Notifications

KPMG Law and KPMG are advising Diehl Defence on the acquisition of the Dr. Carls aerial imagery database

KPMG Law Rechtsanwaltsgesellschaft mbH (KPMG Law) and KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG) advised Diehl Defence on its acquisition of the aerial imagery database Dr. Carls GmbH.…

26.09.2026 | In the media

Op-Ed in *Lebensmittelzeitung*: PPWR Introduces New Requirements for the Food Industry

The EU Packaging Regulation (PPWR) has been in effect since August 12, 2026—and presents companies in the food industry with a question that requires urgent…

Contact

Miriam Bouazza

Partner
CHRO

THE SQUAIRE Am Flughafen
60549 Frankfurt am Main

Tel.: +49 69 951195044
mbouazza@kpmg-law.com

Marc Pussar

Partner
Head of Legal Financial Services

THE SQUAIRE Am Flughafen
60549 Frankfurt am Main

Tel.: +49 69 951195-062
mpussar@kpmg-law.com

Frank Michael Bauer, LL.M.

Senior Manager

Luise-Straus-Ernst-Straße 2
50679 Köln

Tel.: +49 221 271689 1649
frankmichaelbauer@kpmg-law.com

© 2026 KPMG Law Rechtsanwaltsgesellschaft mbH, associated with KPMG AG Wirtschaftsprüfungsgesellschaft, a public limited company under German law and a member of the global KPMG organisation of independent member firms affiliated with KPMG International Limited, a Private English Company Limited by Guarantee. All rights reserved. For more details on the structure of KPMG’s global organisation, please visit https://home.kpmg/governance.

KPMG International does not provide services to clients. No member firm is authorised to bind or contract KPMG International or any other member firm to any third party, just as KPMG International is not authorised to bind or contract any other member firm.

Scroll