What is responsible lending? The EU Consumer Mortgage Credit Directive in the UK and the Netherlands

This article assesses if and how the recently adopted EU Directive concerning consumer mortgage credit agreements (Directive 2014/17/EU) contributes to defining a common Bresponsible lending^ policy in the varied contexts of the Member States’ mortgage markets. It addresses that question by analysing how the Directive’s rules will complement or change the regulatory regimes of the UK and the Netherlands. Drawing on data from economics studies regarding household debt, affordability of credit, and the institutional framework of mortgage market regulation, the article seeks to explain how different regulatory choices in these legal systems are informed by the sources of risk that regulators seek to control. Even with the harmonized rules laid down in the Mortgage Credit Directive, the modalities of Bresponsible lending^ will still differ significantly between EU Member States. Nevertheless, the study of Member States’ policies may reveal common concerns and direc- tions on how to address them.