The Consumer Credit Directive 2: four pillars every bank must understand
How to use CCD2 requirements for competitive advantages in risk management, market expansion, and customer trust.
*This article is based on the keynote speech delivered by Alex Blay, Head of Partnerships at Mifundo, at the World Banking Forum 2025 in Athens.
Most financial institutions are treating the Consumer Credit Directive 2 (CCD2) as a compliance project. Teams are analysing regulations, updating policies, and preparing for the 2026 implementation deadline.
But this directive is not just a regulatory hurdle to clear. It is also a framework for competitive differentiation. The banks that recognise this have an opportunity to gain market share instead of simply ticking boxes.
Here is what you need to know about the four core pillars.
Pillar 1: Significantly expanded product scope
The directive now covers a much broader range of consumer credit products. This includes buy now, pay later instruments, overdrafts, small loans below €200, and leasing agreements with purchase options. The upper threshold sits at €100,000. Beyond this, products fall outside the directive's scope. Mortgages remain under the separate Mortgage Credit Directive.
If you offer any form of unsecured consumer credit, you are almost certainly within scope. The breadth represents a fundamental shift from the previous framework. But here is the strategic angle: regulatory certainty enables innovation. When you know exactly which products fall under which rules, you can build with confidence. The ambiguity that previously constrained product development is gone. Some institutions are already considering which new products the regulatory clarity enables.
Pillar 2: Enhanced affordability and creditworthiness assessment
This pillar creates the biggest operational shift and the biggest opportunity. Banks must now assess whether borrowers can repay without undue burden. Not just whether they can technically make payments, but whether those payments will cause financial stress.
Purely mathematical credit scoring models will not meet the standard. Profiling-based assessments without supporting data will not either. Articles 18 and 19 require institutions to consult relevant credit databases, both public and private. They must make reasonable efforts to access available data. The assessment needs to be holistic, considering the consumer's full financial circumstances.
This is precisely where solution providers like Mifundo add value. We help institutions access cross-border credit data and make more informed, responsible lending decisions. But the opportunity extends beyond compliance. Better data means better risk management, lower default rates, and improved customer outcomes. Banks that invest in robust creditworthiness infrastructure have the potential to outperform competitors still relying on limited data sources.
Pillar 3: Stricter marketing and remuneration controls
Expect enhanced regulatory scrutiny in two areas. First, advertising standards will prevent aggressive marketing tactics, eliminate misleading or ambiguous campaigns, and require clear, transparent communication. Second, staff compensation cannot be directly linked to loan volume. Remuneration structures must align with consumers' best interests. Quality trumps quantity in credit origination.
Every institution must comply. The playing field levels. Banks that built their growth on aggressive marketing or volume-based incentives lose their edge. Your brand's reputation for responsible lending just became more valuable. Consumer trust matters more. Institutions that already prioritised ethical lending practices now have a structural advantage.
Pillar 4: Non-discrimination in cross-border credit
Article 6 establishes a clear principle: credit institutions cannot treat consumers less favourably based on nationality or place of residence. Permitted exceptions exist – differentiation based on objective, fact-driven risk assessments like AML requirements – but not on nationality or residence alone.
This provision removes barriers to cross-border lending within the EU. For institutions willing to invest in the right infrastructure and partnerships, it represents a genuine market expansion opportunity. When we read this provision at Mifundo, we joked that it looked tailor-made for our platform. (We did not draft it with Christine Lagarde, I promise.) But the strategic value is real: by enabling access to credit data across borders, we help banks comply with non-discrimination requirements while responsibly expanding their addressable market.
From compliance mindset to competitive advantage
CCD2 takes effect in 2026. Your compliance teams are already working on implementation. Consider how your strategy teams might get equally engaged.
Two fundamentally different approaches emerge. The compliance-only path means meeting the regulatory requirements, updating processes, ticking boxes, and moving on. The strategic compliance path means building infrastructure that creates differentiation: better risk models, expanded markets, and superior customer experience. Similar investments, radically different outcomes.
What strategic institutions are doing now
Banks that see this directive as an opportunity are taking specific actions.
They are auditing their product scope to identify everything now covered, and some are considering which new products the regulatory clarity enables. They are evaluating creditworthiness assessment processes against the new standards, with many investing in data infrastructure that improves every credit decision. They are reviewing marketing and compensation practices, recognising that the new rules give ethical lenders a competitive advantage.
Forward-thinking institutions are also exploring cross-border opportunities, mapping out how non-discrimination provisions might expand their market while maintaining responsible lending standards.
The deadline approaches
2026 is closer than it looks. Most institutions have this directive on their compliance agenda. Your compliance teams need to do this work. But your strategy teams need to be equally involved.
The institutions that view this directive strategically – as a framework for building better, more inclusive, more responsible financial products – will lead in 2026 and beyond. Compliance is mandatory. What you build along the way determines your competitive position.
