Peer-to-Peer Lending and EU Credit Laws: A Creditworthiness Assessment, Credit-Risk Analysis or … Neither of the Two?

Abstract

The Article deals with the protection of consumer borrowers and lending investors in peer-to-peer lending within the legal framework provided by EU credit laws. This is the legal framework for EU Member States in the area of loans to consumers. In particular, the article analyses the business model of taking lending decisions on financial technologies (“Fintech”) and big data vis-à-vis the legal obligation of the creditworthiness assessment by lenders. At the same time, it extends the applicability of such a business model to the credit-risk analysis undertaken in the interest of lenders. Ultimately, it questions to what extent EU law caters for peer-to-peer lending, and and to what extent consumers and lenders can find protection. It hints that peer-to-peer lending presents risks for both consumers and lenders, falling short of legal obligations and established practices for their protection.

Bankruptcy according to the bankruptcy law and postponement of payment perspective of creditor legal protection

“…If necessary, the Creditor can sue the Debtor to Court if the Debtor violates his obligations or does not fulfill the PKPU requirements.It is important to understand that the substance of this may vary depending on the particular law or jurisdiction. [8] The fundamental issue related to submitting a PKPU application is in connection with the provisions in Article 224 paragraph (4) of the Bankruptcy Law and PKPU, which states that "A request for a postponement of debt payment obligations is legally obligated to be granted by the court, especially when there is a bankruptcy application submitted by a creditor as stated in which is regulated in Article 229 paragraph (3) and paragraph (4)the Bankruptcy and PKPU Law. Based on the Bankruptcy Law and PKPU, both creditors and debtors have the right to apply for PKPU.…”

Why do bank customers switch? A systematic literature review

“…Although there were intermittent dips in publication frequency, the overall interest in switching behavior is increasing. Bank switching behavior is an emerging research area as the past decade has brought about major changes to the financial landscape, such as (Aji et al, 2020;Sun et al, 2020;Ferretti, 2021).…”

Optional problem solving in peer-to-peer lending

“…As a basis for granting rights to the aggrieved party in cases of default, this is based on the provisions of Article 1267 of the Civil Code which states Parties against whom the agreement is not fulfilled can choose; force the other party to fulfill the agreement, if this can still be done, or demand cancellation of the agreement, with reimbursement of costs, losses, and interest. Continuing the provisions of Article 1267 of the Civil Code above, Claims can be filed separately or in combination with other lawsuits, including Fulfillment (nakoming); Compensation (vervangende vergoeding); Dissolution, termination, or cancellation (ontbinding); Fulfillment plus complementary compensation (nakoming en anvvullend vergoeding); or Dissolution plus complementary compensation (ontbinding en anvvullend vergoeding) (Butarbutar, 2020;Ferretti, 2021). Furthermore, regarding compensation regulated in Article 1248 of the Civil Code which states that compensation can only be given as a direct and immediate result of non-fulfillment of the agreement (Ko, Lin, Do, & Huang, 2022).…”

“…In its application, problems or disputes often occur between the two parties in an agreement that occurs without collateral or only guaranteeing an identity as payment for the rights of creditors that are violated by the debtor or borrower in the event of default or default in payment of installments and interest previously agreed upon. With the trigger for the dispute by the debtor and because there is no guarantee that the creditor can use to receive his rights, what often happens in dispute cases in the field is that the creditor tries to misuse the collateral in the form of the identity by tapping the debtor's cell phone and contacting parties who related or have a relationship with the debtor such as family, friends, and others as an effort to collect creditor rights on the basis of a mutual agreement (Ferretti, 2021). That makes the problem widen, because in several existing cases, the debtor does not accept the creditor's treatment on the basis that the creditor has abused his identity and taken privacy rights or is reducing the honor of the debtor as a human being (Lee, 2021).…”