European Commission issues formal notice to 16 member states regarding consumer credit directive

The European Commission has escalated infringement proceedings against 16 member states, including Cyprus, for failing to fully transpose Directive (EU) 2023/2225 on consumer credit into their national law. The countries were required to comply with the new regulations by November 20, 2025. Other nations receiving a reasoned opinion include Bulgaria, the Czech Republic, Estonia, Ireland, Spain, France, Croatia, Latvia, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, and Slovenia.

This legal action follows an initial wave of warning letters sent to 23 member states in January 2026. The directive aims to modernize consumer protection, covering various credit products such as traditional loans, 'Buy Now, Pay Later' schemes, and digital marketplace transactions. It seeks to ensure transparency and fairness across the European credit market.

Following the receipt of the reasoned opinion, the affected governments now face a 60-day deadline to enact the necessary legislative measures. Failure to comply within this period may result in the European Commission referring the cases to the Court of Justice of the European Union, which could lead to the imposition of significant financial penalties.