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Publikation: Monographie
Systemic usury and the European Consumer Credit Directive
Grunddaten
Abstract
Autoren
Einrichtung
Grunddaten
Titel
Systemic usury and the European Consumer Credit Directive
Erscheinungsjahr
2019
Verlag
Universität Rostock
Verlagsort
Rostock
Serie
Thünen-series of applied economic theory ; no. 161
Auflage
Revised version Dezember 2019
Publikationsform
Elektronische Ressource
Publikationsart
Monographie
Sprache
Englisch
Letzte Änderung
20.12.2023 13:01:59
Bearbeitungsstatus
durch UB Rostock abschließend validiert
Dauerhafte URL
http://purl.uni-rostock.de/fodb/pub/70692
Links zu Katalogen
Abstract
Usury is a frequent occurrence in consumer credit markets and particularly affects low-income households. Although the term usury conjures images of a greedy individual consciously acting to exploit the weak bargaining position of another by deceitful and even fraudulent means, we consider it as a systemic issue: as a problem of social discrimination, where belonging to a group which is statistically discriminated against leads to entrapment in a chain of usurious credit and financial contracts. This paper reviews the economic rationale for usury legislation and evaluates the European Consumer Credit Directive 2008/48/EC in this context. It identifies systemic usury as the product of market failure: the most powerful explanations for which are monopoly power, where the consumer is locked in a bilateral credit relationship; discrimination through risk-based pricing, and negative externalities. Contrary to the main focus of the European Consumer Credit Directive, improved disclosure of contract terms and other relevant information to consumers at the point of contracting cannot address systemic usury in credit markets. Even fully informed consumers can be discriminated against and become trapped in a situation of bilateral monopoly. As a consequence, the Directive is found to be ineffective: it implicitly acknowledges usurious practices and products as legal and undermines the national fight against usury. The Directive must be reformed.
Autoren
Neuberger, Doris
Reifner, Udo
Einrichtung
WSF/IfVWL/Geld und Kredit