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summary annual report 2015 The growth in newly provided consumer credit in 2015 is an important step towards market recovery

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summary annual report 215 The growth in newly provided consumer credit in 215 is an important step towards market recovery After a long lasting downward trend in newly granted consumer credit, the Dutch
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summary annual report 215 The growth in newly provided consumer credit in 215 is an important step towards market recovery After a long lasting downward trend in newly granted consumer credit, the Dutch market showed a modest recovery in 214. In 215 newly granted credit increased significantly. Although pre financial crisis levels of new credit have not been reached yet, a 21% increase in 215 represents an important step towards full recovery in the market. The outlook for further growth in the market is positive. The combination of economic recovery, increasing consumer confidence and willingness to purchase offers a solid base for the market in 216. A better synchronization in creditworthiness assessment criteria for consumer credit and mortgage credit is an important wish for 216. In close cooperation with the various stakeholders, it will be assessed in which way both consumer and mortgage credit can fulfil financing needs for the consumer in a responsible manner. In this discussion, an important aspect is the lowering from the legally allowed maximum Loan to Value (LTV) for mortgage credit in the next years. In 218 the maximum LTV will be 1%. The VFN foresees opportunities for consumer credit to fill in the financing gap which will be caused for consumers by the stricter LTV standard. Therefore, setting up the fundamental structure for a new integrated code of conduct for consumer and mortgage credit is an important project for 216. In 215 the VFN contributed significantly to the availability of responsible products for the consumer. Important progress has been reached in creating a self regulation framework for Private Lease. The VFN has stressed the importance of using the loan assessment criteria which are part of the VFN Code of Conduct for Private Lease contracts. The VFN has also emphasized the need to register Private Lease contracts in BKR s credit register. The Keurmerk Private Lease, which is a form of self regulation, has incorporated these wishes. This improves the level playing field for regular consumer credit providers and guarantees a responsible and transparent offer for the consumer. The VFN continues to expand services for members and associate members. In 215 the VFN introduced additional tooling for sharing information about potential fraudulent credit applications. This new opportunity has enriched the cooperative joint approach towards fighting fraud. The number of members and associate members shows continued growth. Crowdfunding platforms increasingly apply for VFN membership. The VFN will keep contributing to the further discussions on proportionate regulation and supervision for crowdfunding. This framework needs to offer opportunities for innovation, and simultaneously lead towards a responsible and reliable alternative for the consumer. The VFN Code of Conduct offers the consumer a guarantee for a responsible offer and transparent and understandable information. An important goal for this year will be to further accompany the consumer in making responsible borrowing decisions. Together with the involved stakeholders, it will be assessed how support for the consumer can be enhanced, both before and after concluding a credit agreement. Within a sector which is confronted with strict (European) regulation and a diverse field of stakeholders, sound relations are crucial. In the last year, the VFN board invested extensively in these relations. Driven by the notion that a healthy consumer credit market can only function in case the interests of consumers, intermediaries and suppliers are taken into account in a responsible manner, the VFN will continue to strive for connecting stakeholders. In this way consumer credit will remain the engine for economic growth, and the consumer will be supported in realizing his spending goals. guus alfrink, chairman VFN Local Developments Creditworthiness assessment The VFN Code of Conduct prescribes the criteria on how the financial position (income and financial obligations) of the consumer determines the maximum amount of consumer credit which can be granted. The Dutch supervisor AFM considers the VFN Code of Conduct to be a sufficient and concurrently minimal standard to comply with the open regulation in the Dutch law which obliges credit suppliers to prevent over-indebtedness. Based on local developments in payment behaviour and risk developments within the various family types which are important components in the VFN framework, the VFN proposed changes in the framework which were supported by the Dutch institute for budgeting (NIBUD). After discussions with the AFM, it was concluded that sufficient mutual support for a new framework was not yet within reach. The discussions on a new framework, which are also intended to incorporate a strengthened relation between consumer and mortgage credit, will continue in 216. Credit Register developments The BKR credit register offers important insight for Dutch credit providers. The credit register in the Netherlands offers both positive and negative data on consumer credit and thereby enhances credit application processes and the availability of credit for the consumer. The VFN supports the further anticipated enrichment of the register, which involves a broader registration of overdraft facilities and the positive registration of mortgage credit. In the current situation mortgage credit is only negatively registered, whereas consumer credit is already registered positively and negatively. Theme investigation on Car Finance Product Approval & Review Processes (PARP) In 215 the AFM investigated Car Finance Product Approval & Review Processes and specific Car Finance product features which are currently common in the Dutch market. Since 213, PARP regulations are in the Dutch law. Financial product suppliers are obliged to have a PARP in place which incorporates the consumer interest in product development procedures. As is often the case, the Dutch legislation on this topic clearly precedes the European legislation, which is still in a preliminary stage. Following the results from the investigation, the AFM has discussed provisional findings with the VFN. Based on the desirability to keep a wide range of products available for the consumer, the VFN has discussed potential changes with the AFM. These discussions are expected to be finalized in the beginning of 216. Implementation Mortgage Credit Directive (MCD) As in the other EU member states, the MCD is implemented in Dutch legislation. Contrary to many member states, the MCD will have no significant impact on consumer credit providers in the Dutch market. However, the impact for the mortgage credit providers will be substantial. An important change for Dutch mortgage credit providers will be the binding character of proposals for the consumer. This change will lead to the necessity to finalize all aspects which are related to the creditworthiness assessment before the offer is presented to the consumer, including taxation of the property. The MCD will also lead to the introduction of standardized pre-contractual information, which is already in place in consumer credit since the Consumer Credit Directive implementation. Crowdfunding regulation and supervision In 215 the VFN contributed to the work of the legislator and the supervisor on a regulatory and supervisory framework for crowdfunding platforms. Crowdfunding platforms which comply with the VFN Code of Conduct, and which are responsible for the creditworthiness assessment can become full VFN members. In the discussions on a proportionate regulatory and supervisory framework for crowdfunding, the VFN has emphasized the need for transparent information for the borrower and the necessity to have clearly defined responsibilities regarding the creditworthiness assessment. Market Figures The VFN members provide annual insight into the development of the newly granted consumer and commercial credit and receivables. 1,8 1,6 REVOLVING The downward trend in newly granted consumer credit in the post financial crisis years ended in 214. In 214 the newly granted credit increased slightly (+2%). In 215 the growth accelerated. In 215 VFN members provided 21% more new credit for consumers compared to ,4 1,2 1, PERSONAL Total vfn members Granted Personal Loans and Revolving Credit 8 Car Finance showed a growth of 18%. Consumer credit for other spending purposes showed an even larger growth (+23%). 6 4 Provided Consumer Credit by VFN members Consumer Credit excl. private car loans Private car loans Total Consumer Credit 2, ,938 2,253 1,16 3,359 1,475 1,73 2,548 1, ,37 1,352 1, 2,352 1,663 1,177 2,84 The VFN members outstandings in consumer credit increased (+2%) to a level of 8,2 bn in 215. The increase was mainly driven by outstandings in Car Finance (+8%). The outstandings in the other consumer credit categories hardly changed (+,1%) to a level of 6,1 bn in 215. Total VFN members outstanding Consumer Credit 4,5 4, TOTAL CONSUMER ,5 3, 2,5 2, CONSUMER excl. private car loans PRIVATE CAR Provided Consumer Credit by VFN members Consumer credit excl. private car loans Private car loans Total Consumer Credit 6,879 1,675 8,554 7,272 1,921 9,193 7,26 1,969 9,175 6,187 1,929 8,116 6,79 1,932 8,11 6,82 2,94 8,176 1,5 1, , TOTAL CONSUMER In the last years, the share of Personal Loans in new credit has increased. This trend continues in 215. The amount of new Personal Loans in 215 increased by 55%. The amount of new Revolving Credit increased by 11%. The share of Personal Loans in new credit increased to a level of 35%. 7, 6, 5, 4, 3, 2, CONSUMER excl. private car loans PRIVATE CAR Total VFN members outstanding Consumer Credit Personal Loans and Revolving Credit provided by VFN members 1, Personal loans Revolving credit 266 1, , , ,41 In 215 VFN members provided more (+22%) new Commercial Credit. The outstandings also increased (+12%) to a level of 612 mn. Total VFN members outstanding Commercial Credit Outstandings New Credit OUTSTANDINGS NEW Nautilus Seashell
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