Consumer loan agreements and financing assistance for consideration; power to issue a statutory instrument

(1) Credit institutions must examine the borrower's creditworthiness before concluding a consumer loan agreement. The credit institution may conclude the consumer loan agreement only where the creditworthiness assessment shows that, for a general consumer loan agreement, there is no significant doubt as to creditworthiness, and that, for a residential immovable property consumer loan agreement, it is likely that the borrower will comply, in accordance with the agreement, with its obligations connected with the loan agreement.
(2) Where the net loan amount is significantly increased after the loan agreement is concluded, creditworthiness must be reassessed on an updated basis, unless the increase in the net loan amount was already included in the original creditworthiness assessment.
(2a) For residential immovable property consumer loan agreements that
1. grant, following a loan agreement concluded between the contracting parties, a new right to use capital in order to achieve the purpose pursued by the borrower with the previous loan agreement, or
2. replace or supplement another loan agreement between the contracting parties, in order to avoid termination for the borrower's default in payment or to avoid enforcement measures against the borrower, a fresh creditworthiness assessment is required only under the conditions of subsection (2). Where, under this, no creditworthiness assessment is required, the lender may not conclude the new residential immovable property consumer loan agreement where it is already aware that the borrower will be permanently unable to comply with its obligations connected with that loan agreement.
(3) The creditworthiness assessment may be based on information from the borrower and, where necessary, information from bodies that, on a commercial basis, collect, store, alter, or use, for the purpose of transmission, personal data that may be used to assess consumers' creditworthiness. The credit institution is required to verify the information appropriately, where necessary also by inspecting independently verifiable documents.
(4) For residential immovable property consumer loan agreements, the credit institution must thoroughly examine the borrower's creditworthiness on the basis of necessary, sufficient, and proportionate information on the borrower's income, expenses, and other financial and economic circumstances. In doing so, the credit institution must appropriately take into account the factors relevant to assessing whether the borrower is likely to be able to comply with its obligations under the loan agreement. The creditworthiness assessment may not be based mainly on the fact that the value of the residential immovable property exceeds the loan amount, or on the assumption that the value of the residential immovable property will increase, unless the loan agreement serves to build or renovate the residential immovable property.
(5) The credit institution is required to document, in accordance with section 25a(1), sixth sentence, point 2, the procedures and particulars on which the creditworthiness assessment is based, and to retain the documentation.
(6) The internal and external staff involved in granting residential immovable property consumer loans must have adequate knowledge and competence relating to designing, offering, arranging, or concluding residential immovable property consumer loan agreements, or to providing advisory services in relation to those agreements, and must keep their knowledge and competence up to date.
(7) Credit institutions that grant residential immovable property consumer loans secured by a charge or an encumbrance must
1. use reliable standards when valuing the property, and
2. ensure that internal and external appraisers who carry out property valuations for them are professionally competent and sufficiently independent of the loan-granting process to be able to provide an objective valuation. The credit institution is required to document, on a durable medium, in accordance with section 25a(1), sixth sentence, point 2, valuations of properties serving as security for residential immovable property consumer loans, and to retain the documentation.
(8) Insofar as credit institutions grant, arrange, or provide advisory services under section 511 of the Civil Code in relation to residential immovable property consumer loans or ancillary services, they must base these on information on the consumer's circumstances, the specific needs stated by the consumer, and realistic assumptions as to the risks to the consumer's situation over the term of the loan agreement.
(8a) Approval for tying arrangements in residential immovable property consumer loan agreements under section 492b(3) of the Civil Code may be granted only where the lender can demonstrate to the supervisory authority responsible for it that the tied products or product categories offered on similar contractual terms, which are not available separately, offer a clear benefit to the consumer, having due regard to the availability and prices of the relevant products offered on the market, and are products marketed after 20 March 2014.
(8b) Credit institutions must have appropriate strategies and procedures in place, so that they make efforts, where appropriate, to exercise reasonable forbearance before enforcement proceedings are initiated on the basis of a consumer loan agreement. The measures that may need to be taken must, among other things, have regard to the individual circumstances of the consumer concerned and may include, among other things:
1. a full or partial refinancing of the loan agreement, or
2. an amendment of the terms of the loan agreement, which may include, among other things:
a) an extension of the term of the loan agreement,
b) a change in the type of the loan agreement,
c) a deferral of payment of all or part of the repayment instalments for a specified period,
d) a change to the interest rate,
e) an offer of a payment holiday,
f) partial repayments,
g) currency conversions,
h) a partial waiver and debt consolidation. For a residential immovable property consumer loan agreement, the circumstances to be taken into account in the efforts to exercise forbearance include, in particular, the question whether the residential immovable property consumer loan agreement is secured by a residential immovable property that is the consumer's main residence.
(9) The provisions on the protection of personal data remain unaffected.
(10) Subsections (1) to (9) also apply to the respective corresponding financing assistance for consideration.
(10a) The Federal Ministry of Finance and the Federal Ministry of Justice and Consumer Protection are empowered, by joint statutory instrument not requiring the consent of the Bundesrat, to set guidelines on the criteria and methods for the creditworthiness assessment for residential immovable property consumer loan agreements under subsections (1) to (5). The statutory instrument may in particular set guidelines:
1. on the factors relevant to assessing whether the borrower is likely to be able to comply with its obligations under the loan agreement,
2. on the procedures to be applied and on collecting and verifying information.
(11) The Federal Ministry of Finance is empowered, by statutory instrument not requiring the consent of the Bundesrat, to issue more detailed provisions on the knowledge and competence required under subsection (6) of the internal and external staff involved in granting loans. The Federal Ministry of Finance may, by statutory instrument, transfer the power under the first sentence to the Federal Institute.