Credit card debt as Credit for Consumption

Background provided by the submitter · verbatim

According to the answer given to the

Q&A 5167

(published as final Q&A in 04/12/2020) where it says “

In accordance with the BSI Regulation, the definition of Credit for consumption shall be limited to the narrow definition of in 1(a)(i) of the Loans category (“loans granted for the purpose of mainly personal use in the consumption of goods and services

”). The items listed from 1.(b) to 1.(k) shall not be part of the definition to use for Credit for consumption for the purpose of the FINREP reporting.”; since “Credit Card Debt” is an item defined in 1.(b) of the BSI regulation mentioned before, we understand that Credit for Consumption for the purpose of FINREP should not include credit card contracts.

However, according to the BSI Manual (released in January 2019), which provides a comprehensive overview of the conceptual and methodological framework for data collection, in its section 4.3.2 about “

Convenience and extended credit card credit

” (pages 41-42 of the manual) provides the following explanation: “…

In terms of classification by purpose of lending, convenience and extended credit card credit to households should be classified as credit for consumption

…”.

Therefore, in our point of view, there is no clear answer to the fact of the classification of the Credit Card Debt according to its purpose of lending:

- Not including it as credit for consumption according to the Q&A 5167, or

- Including it as credit for consumption according to eh BSI Manual.

Rationale for rejection · verbatim

This question has been rejected because the objective of the Q&A tool is not to answer questions that put into doubt the correctness of the legal framework or try to lobby for a modification of the text. The Single Rule Book Q&A tool has been established to provide explanations and non-binding interpretations on questions relating to the practical application or implementation of the provisions of legislative acts referred to in Article 1(2) of the EBA’s founding Regulation, as well as associated delegated and implementing acts, and guidelines and recommendations, adopted under these legislative acts. This particular Q&A would have direct implications on the text of the current legal framework (ITS on supervisory reporting of institutions (Annex V)).

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