Mortgage Credit Directive (MCD)
A European directive transposed into French law that frames mortgage lending to individuals: standardized information (ESIS), creditworthiness assessment, cooling-off period and intermediary competence. It is the common regulatory bedrock underpinning IOBSP mortgage-credit activity.
Key points
- European directive transposed in France, governing mortgage lending to private individuals.
- Requires delivery of a standardized ESIS sheet enabling comparison between loan offers.
- Obliges the lender and intermediary to assess creditworthiness before any financing decision.
- Sets minimum professional competency requirements for all credit intermediaries.
Frequently asked questions
What does the Mortgage Credit Directive concretely change for a broker?
It requires the broker to systematically provide the ESIS sheet to each client and to document the creditworthiness assessment. Without this formalism, a transaction can be challenged and the broker's liability engaged. It is therefore both a legal obligation and a professional safeguard.
What is the difference between the MCD and national ACPR rules?
The MCD establishes a common baseline across the entire European Union; the ACPR rules in France supplement and sometimes reinforce this baseline, particularly on IOBSP registration conditions and training obligations. A broker must comply with both levels simultaneously.
Does the directive also apply to consumer credit?
No, the MCD specifically targets residential mortgage credit secured by a mortgage or equivalent security. Consumer credit falls under a separate dedicated European directive with distinct requirements. The distinction matters for a multi-product broker.
In practice
A broker hands the ESIS to their client before any formal offer: this document lists the rate, fees, cooling-off period and required guarantees, allowing the client to calmly compare two competing bank proposals.
Official sources
- Article L519-1 of the Monetary and Financial Code · Légifrance
- Mortgage credit (official guide) · Service-Public.gouv.fr
- Prudential supervision and resolution authority · ACPR (Banque de France)