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      Introduction

      The new Consumer Credit Directive (“CCD II”) overhauls existing EU regulations to address a wider range of credit offerings and significantly expands consumer protections.

      CCD II applies from 20 November 2026 and is being introduced to a consumer-credit market that has evolved significantly since the introduction of CCD I.

      Gillian Kelly

      Partner

      KPMG in Ireland

      A changing credit landscape

      Consumers increasingly encounter credit through online checkouts, buy now-pay later arrangements, embedded-finance propositions, instalment plans, appliance/asset financing and other non-traditional lending models.

      • Organisations not historically considered as consumer-credit providers will need to redesign their customer journeys, process and documentation.
      • Traditional lenders will also need to significantly uplift processes from advertising and consumer engagement to forbearance and lifecycle changes.

      Impacted organisations

        • Buy Now Pay Later (BNPL) providers
        • Motor-finance providers
        • Device-finance businesses
        • Traditional consumer lenders
        • Digital platforms
        • Embedded-credit providers
        • Retailers offering instalment or deferred-payment arrangements

        What is changing?

        As well as expanding the scope of the credit framework, the directive strengthens obligations across six key areas:

        • Communications: advertising and pre-contract
        • Creditworthiness assessments
        • Customer-first practices
        • Automated decisioning and consumer rights

          Faster implementation does not remove the risk of future challenge.

        • Financial difficulty and forbearance
        • Governance, oversight and evidence

        Our point of view

        For many organisations, CCD II will require an end-to-end overhaul of processes.

        Products and offerings previously treated as payment features, instalment options or commercial arrangements will now need to operate within a regulated consumer-credit framework.

        • For some organisations this will require the creation of capabilities that have not historically existed within the business.
        • For existing lenders, CCD II requires a significant uplift to customer processes, engagement models and documentation.

        An approaching deadline


        Entities should establish their “readiness” for the 20 November 2026 deadline.

        New processes and practices need to be supplemented with training and, for many entities, tactical solutions and controls may need to be introduced while processes continue to be automated and capabilities expanded.

          What changes under CCD II

          Key changes to scope

          • Expanded products
            • Buy-Now-Pay-Later and deferred-payment arrangements.
            • Hire purchase and leases with option to purchase.
            • Interest-free certain short-term credit.
            • Deferred debit cards, one-month overdrafts and “overrunning” arrangements.
          • New thresholds
            • €200 lower threshold removed.
            • Upper threshold increased from €75,000 to €100,000.
          • Providers affected
            • Motor, device and asset-finance businesses with relevant credit arrangements.
            • Retailers and digital platforms acting as creditors or credit intermediaries.
            • BNPL and alternative-credit providers.
            • Existing lenders with newly covered products.

          Key changes for credit providers

          Providers’ responsibilities

          • Identify affected products and entities
          • Determine creditor and partner intermediary roles
          • Resolve scope uncertainty, for example exemptions

          How KPMG can help

          • Assess product applicability
          • Analyse entity and partner roles
          • Review customer journeys

          Providers’ responsibilities

          • Identify applicable CCD II obligations and define requirements
          • Map these to products and customer journeys

          How KPMG can help

          • Interpret and map obligations to journeys, processes and controls
          • Define communications, decision and servicing impacts

          What changes?

          • Explicit request and affirmative agreement
          • Bundling restrictions and advisory safeguards
          • Withdrawal and early-repayment protections

          Implications for providers

          • Review of sales practices, consent journeys, product design, early-repayment charges and ancillary services
          • Demonstrate consumer choice is not driven by default options

          What changes?

          • Disclosure of automated personalised offers
          • Explanation of automated creditworthiness assessments
          • Human review, viewpoint and challenge rights

          Implications for providers

          • Automated journeys will require explainability, human-review routes and clear communications
          • Connect customer-facing channels and decision engines

          What changes?

          • Early identification of financial difficulty
          • Reasonable forbearance before enforcement
          • Term modification and accessible debt-advice referral

          Implications for providers

          • Documented early-warning processes and forbearance options
          • Trained servicing teams and effective referral arrangements

          What changes?

          • Explicit conduct-of-business standards
          • Staff competence and remuneration safeguards
          • Documented procedures and compliance evidence

          Implications for providers

          • Clear accountability, ownership, controls, monitoring and evidence
          • Documented training policies and incentive processes

          CCD II: An illustrative roadmap

          Our implementation roadmap allows for transparent, targeted advice and assessment regardless of where you are on the implementation journey.

          Providers’ responsibilities

          • Identify affected products and entities
          • Determine creditor and partner intermediary roles
          • Resolve scope uncertainty, for example exemptions

          How KPMG can help

          • Assess product applicability
          • Analyse entity and partner roles
          • Review customer journeys

          Providers’ responsibilities

          • Identify applicable CCD II obligations and define requirements
          • Map these to products and customer journeys

          How KPMG can help

          • Interpret and map obligations to journeys, processes and controls
          • Define communications, decision and servicing impacts

          Providers’ responsibilities

          • Assess and evaluate people, processes, data, technology, governance and policies
          • Identify gaps, risks and dependencies

          How KPMG can help

          • Perform a current-state assessment
          • Review business readiness and assess gaps
          • Prioritise gaps by impact and delivery needs

          Providers’ responsibilities

          • Define the target operating model
          • Design journey, process and control changes
          • Set priorities, owners and milestones

          How KPMG can help

          • Support target-state and customer-journey design
          • Develop a prioritised implementation roadmap

          Providers’ responsibilities

          • Implement required changes to policy and process
          • Test journeys, systems and controls
          • Maintain evidence and track issues

          How KPMG can help

          • Support implementation and governance
          • Validate calculations and decision logic
          • Assess communications and processes

          Providers’ responsibilities

          • Establish oversight and reporting
          • Monitor controls and customer outcomes
          • Conduct ongoing compliance reviews for new products

          How KPMG can help

          • Design compliance monitoring and reporting
          • Assess controls and residual risks
          • Perform post-implementation reviews

          How we can help

          Whether you are seeking a readiness assessment of the new CCD II Directive, an end-to-end review or more targeted advice and benchmarking, we would be delighted to discuss how we can support you on your journey.

          • Accelerated readiness assessment
            • Two-week readiness assessment.
            • Clear roadmap produced showing areas requiring attention ahead of 20 November 2026.
          • Benchmarking vs industry standards
            • Clarity on “what good looks like”.
            • Fresh perspective and knowledge of Central Bank expectations.
          • End-to-end post-implementation review
            • End-to-end compliance review covering six pillars of changes.
            • Full compliance assessment of policies and procedures, documentation including advertising/SECCI, IT landscape, and use of data in creditworthiness assessments.
          • Targeted regulatory advice
            • Clarity on scope of regulations, exemptions and interpretation of the directive.
            • Advice on sufficiency of policies, training, remuneration, etc.

          Different organisations, different levels of readiness

          All organisations have different starting points in their compliance journey.

          Compliance is an ongoing activity involving implementation, assessment and improvement.

          Get in touch

          Gillian Kelly

          Partner

          KPMG in Ireland

          Brendan Crowley

          Managing Director

          KPMG in Ireland

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