Leaseurope 2020 Annual Review Published

In this issue we provide an overview of recent regulatory updates, including EBA extension guidelines on payment moratoria and the agreement reached on post-Covid recovery instrument

Leaseurope 2020 Annual Review Published



Leaseurope recently published our 2020 Annual Review, highlighting our Federation’s activities and achievements over the last year. In addition to a special feature on the impact of the COVID-19 pandemic, and the role Leaseurope played in highlighting our industry’s views and concerns to policy makers, the latest Annual Review provides an overview of the wider work of the Leaseurope advocacy and statistics teams in the last year. This includes an update on our advocacy plan to achieve a preferential prudential capital treatment for leasing in Europe, as well as our work on the Motor Vehicle Block Exemption Regulation and access to in-vehicle data. We overhauled our communications in 2020, and this is elaborated on, including our new website and online member area, digital Leaseurope Inside newsletter, and the Leaseurope Policy Latest. Leaseurope statistics also show the impact of the pandemic on the European leasing and automotive rental sector in the first half of the year.

You can find the full publication here.


Leaseurope’s Chair recently communicated with the new European Commissioner for Financial Services, Ms. Mairead McGuinness, on our proposal for a preferential prudential capital treatment for leasing in the European implementation of Basel IV. The aim of the letter was to follow-up with the new Commissioner on Leaseurope’s previous exchanges with Executive Vice-President Valdis Dombrovskis, who no longer holds the financial services portfolio.

You can find the letter here.


On 15 December, a Leaseurope delegation met with Tommy De Temmerman, who is the member of Ms. McGuinness’ cabinet in charge of the implementation of Basel IV in Europe, to discuss our proposals for lower risk weights for leasing in Europe. The meeting was an excellent opportunity to explain our points and evidence in detail to the new cabinet, as well as several DG FISMA officials. We clarified most of their concerns and they now better understand the low risk profile of leasing and how this could potentially be reflected in the prudential regulatory framework. We will continue following-up with the cabinet and DG FISMA on a number of technical aspects.

The European Commission is expected to publish its proposal on the European implementation of Basel IV before summer 2021. Therefore, it is crucial to convince Member States and key MEPs to support the inclusion of any leasing specific adaptations in the European Commission’s final proposal. This will be our focus next year.


Following our lobbying efforts on access to (in-)vehicle data, the European Commission have decided to move ahead with a study to assess the development of regulatory options for a possible legal framework for access to vehicle data. The study is conducted by TRL and fka GmbH. In addition to assessing the viability of a new legal framework, they will also look at amending RMI and OBD rules to enable aftermarket and mobility competition, and to allow independent spare part manufacturers fair access to the market.

Leaseurope responded to a questionnaire for the study, where we underlined that enhanced access to in-vehicle data for all services needs to be rolled out in the coming years and data availability needs to be clarified upfront. We stressed that data is important to monitor electric vehicles/battery status and charging infrastructure information, a level playing field is needed between authorized repairers and independent repairers, and that standardisation and interoperability would need to be encouraged. TRL and fka GmbH are expected to consolidate a report of stakeholder input in January, and it will be submitted to the Commission in February.

You can find our questionnaire response here.



The European Banking Authority (EBA) has decided to reactivate its Guidelines on legislative and non-legislative moratoria. This reactivation will ensure that loans/leases, which had previously not benefitted from payment moratoria, can now also benefit from them. The EBA revised Guidelines, which will apply until 31 March 2021, include additional safeguards against the risk of an undue increase in unrecognised losses on bank balance sheets. The EBA has introduced two new constraints to ensure that the support provided by moratoria is limited to bridging liquidity shortages triggered by the new lockdowns and that there are no operational restraints on the continued availability of credit.

  • Only loans/leases that are suspended, postponed or reduced under general payment moratoria not more than 9 months in total, including previously granted payment holidays, can benefit from the application of the Guidelines.
  • Credit institutions are requested to document to their supervisor their plans for assessing that the exposures subject to general payment moratoria do not become unlikely to pay. This requirement will allow supervisors to take any appropriate action.

The Secretariat will continue monitoring any new developments regarding payment moratoria in Europe.


The European Parliament and Council recently reached an agreement on the next long-term budget and the temporary recovery instrument (NextGenerationEU). The package, worth €1.8 trillion, is the largest relief package ever financed by the EU budget. It will integrate the Commission’s overarching goals into the recovery, with sustainability and digitalisation as key priorities. Over half of the funds will be used to facilitate modernisation of the European economy, through both the Just Transition Fund and the Digital Europe programme. Additionally, 30% of the budget will be used to tackle climate change, and this marks the highest percentage ever allocated to this in the European budget. The budget has also allocated over €60 million for transport infrastructure.


The European Banking Authority (EBA) has recently published two reports on the impact of implementing the final Basel III reforms in the EU. Both reports do not reflect the economic impact of the Covid-19 pandemic on participating banks as the reference date is December 2019.

The first is an updated ad-hoc impact study in response to the EU Commission’s call for advice (CfA). The overall impact is presented under two implementation scenarios: the first one, called “Basel III scenario”, updates the impact presented in the previous CfA Reports; the second one, called “EU-specific scenario”, considers the additional features requested by the European Commission in its CfA. Tier 1 minimum required capital is expected to increase by 18.5% under the Basel III scenario, with an estimated total capital shortfall within European banks of about €52 billion. Under the EU-specific scenario, the impact would reduce to 13.1%, resulting in a shortfall of €33 billion. In addition, the report presents some qualitative reflections on the potential interactions between different elements of Basel III framework and the estimated adverse impact of the COVID-19 crisis. The EBA reaffirms its previous policy recommendations and supports the full implementation of the final Basel III standards in the EU.

The second Report also assesses the impact of implementing the final Basel III reforms in the EU, however the results are not directly comparable to those of the CfA report as they are based on slightly different samples and methodologies. They estimate that a full Basel III implementation by 2028 would result in an average increase of 15.4% on the current Tier 1 minimum required capital of EU banks, equivalent to €9.4 billion.


The European Banking Authority (EBA) has published an Opinion on the amendments proposed by the European Commission regarding the EBA’s final draft Regulatory Technical Standard (RTS) specifying the methodology competent authorities are to follow when assessing compliance with requirements to use the Internal Ratings Based (IRB) approach laid down in the Capital Requirements Regulation (CRR). These RTS are an important part of the EBA’s regulatory review of the IRB approach, as they harmonise the supervisory assessment methodology on the IRB approach across all Member States in the EU.


Earlier this month, the European Commission published their Communication on a “Sustainable and Smart Mobility Strategy - driving forward European connectivity”. The strategy sets out a vision to reach climate targets, including taking into account externalities and applying the polluter-pays principle. In response to a question on whether diesel cars will be phased out, Commissioner Vălean stated that it depends on the category of vehicle (passenger cars, LCVs, HDVs). Initiatives to be delivered include the Eurovignette, the Alternative Fuels Infrastructure Directive and Euro 7 standards.

The strategy also includes measures on the energy transition, road safety and digitalisation. Commissioner Vălean anticipates that R&I funds will be redirected in order to solve the production problem (e.g. for more sustainable biofuels) and that next year the Energy Taxation Directive will be published. The Communication also confirms initiatives for which Leaseurope has been advocating, such as the review of EU type approval legislation and measures to encourage cross-border shared mobility (e.g. car rentals). To achieve this vision, the Strategy identifies 10 flagship areas with a list of policy actions that will guide the Commission’s work in the years to come. These policy actions are built around three pillars: (1) make all transport modes more sustainable; (2) make sustainable alternatives widely available; (3) put in place the right incentives.

You can access the staff working document here and a fact sheet here. You can also read the related press release here.


During the Transport Ministers videoconference on 8 December, a policy debate was held on a proposal to revise the EU road charging directive (Eurovignette) to address issues relating to road infrastructure financing, congestion and environmental impact by reinforcing the ‘polluter pays’ and ‘user pays’ principles. In 2017 the European Commission suggested phasing out time-based charging systems and widening the scope to include buses and coaches, light commercial vehicles, and passenger cars.

The current compromise text keeps the charging system flexible, maintaining time-based charging as a cost-effective alternative to distance-based charging, and introduces a mandatory EU-wide tool which would vary charges for heavy-duty vehicles on the basis of CO2 emissions. The new system seeks to contribute to the internalisation of external costs, promote the entry into the market of less emitting vehicles and help combat climate change. All Member States agreed with the current compromise text, with the exception of Austria. This means that a general approach will likely be reached at the COREPER meeting on 18 December. Commissioner Vălean supported a swift Council-Parliament agreement so that the Eurovignette can be signed into law in 2021.


The European Commission recently released two important pieces of legislation regarding the digital space, the Digital Services Act and the Digital Markets Act.

The Digital Services Act aims to promote improved safety for users, increased transparency of platforms and better enforcement of relevant legislation. With this first instrument, the Commission introduces new due-diligence obligations, and digital platforms will be required to swiftly remove illegal content and to explain to the user why the content was removed. It will also require online marketplaces to check seller identities, and platforms to tell relevant parties (including leasing and automotive rental companies) how their algorithms work. On possible sanctions, the regulation maintains the country-of-origin principle, whereby national authorities where the platform is established can impose redress actions in instances where a platform fails to comply.

Whereas the Digital Services Act is horizontal, and applies to everyone, the Digital Markets Act applies specifically to so-called “gatekeepers” for which the Commission reported numerous competition cases at European level (e.g. three Google cases, and an initial Amazon case) as well as those reported by national authorities (e.g. cases). According to the new rules, these gatekeepers will need to comply with a number of obligations, notably on how they use data, interoperability and self-preferencing. A key achievement with the Digital Markets Act is that gatekeepers shall no longer use the data they collect from the businesses that their platforms host when competing against them.


The European Commission recently issued their highly anticipated Data Governance Act proposal, which creates a framework for the way that non-personal data is shared and governed. The proposal aims to promote the neutrality and transparency of data intermediaries and make it easier for public sector data to be reused. The new rules would also prohibit public entities from granting private entities exclusive access to data. Executive Vice President Vestager noted “The principle behind the intermediaries is to boost voluntary data sharing whilst preserving control over the data from companies and individuals”.

Notably, unlike previous drafts of the proposal, these intermediaries would not necessarily have to be established in the EU. Instead, data sharing services could either be established in the EU or have a “designated representative” in Europe. The proposal is subject to public consultation, with a deadline for feedback by 1 February 2021. Leaseurope will prepare a response, highlighting the importance of access to data in the transport sector. More dedicated proposals on the sharing of non-personal data across different sectors, including transport, are due to be issued in 2021.


The European Commission has recently issued a delegated act to accompany their Taxonomy on Sustainable Finance, alongside a public consultation which is open until 18 December. The delegated act, alongide the annexes, essentially set out which activities can be deemed “sustainable” under the Taxonomy Regulation, and the first delegated act sets out technical screening criteria for activities that substantially contribute to climate change mitigation (Annex 1) or climate change adaptation (Annex 2).

Both the activities and the criteria are based on input from the Technical Expert Group on Sustainable Finance, which was set up in October. Notably, cars would have to reach zero emissions by 2025 in order to be labelled as sustainable. Additionally, in both annexes the vast majority of references to the contribution of leasing and automotive rental are made in relation to mobility/vehicles. Leaseurope is preparing a response to the consultation, where we highlight both the need to have a pragmatic approach to the issue of zero emission vehicles, and the need for the broader role of our industry (beyond leasing vehicles) to be recognised.


The Collective Redress proposal, initially presented in April 2018 as part of the European Commission’s “New Deal for Consumers”, has recently been approved by the European Parliament. The Directive requires all Member States to make it possible for qualified representative entities (e.g., consumer organisations or public bodies) to bring a representative action against a company/entity in instances where multiple consumers were harmed by the same practice.

Notably, the Directive does not allow law firms or similar entities to bring an action on behalf of consumers or for damages to be awarded that go beyond the actual loss incurred by consumers. These measures were included in a bid to prevent a US-style system, where damages imposed on companies can far exceed that caused by the original conduct. The Directive encompasses all infringements of EU law and covers a wide range of areas where an entity’s conduct can potentially harm a group of consumers, ranging from financial services, travel and tourism, and data protection. The Directive will now be published in the Official Journal, and thereafter Member States will have two years to transpose it into national law.


On 16 December, the European Commission released a non-performing loan (NPL) action plan which is intended to address a potential future build-up of NPLs across the European Union as a result of the COVID-19 crisis. The strategy has four main goals: further develop secondary markets for distressed assets; reform the EU’s corporate insolvency and debt recovery legislation; support the establishment and cooperation of national asset management companies (AMCs) at EU level; and implement precautionary public support measures, where needed, to ensure the continued funding of the real economy under the EU’s Bank Recovery and Resolution Directive and state aid frameworks. Leaseurope will engage with the Commission in the coming months on this topic, as debt recovery and insolvency legislation reform in particular is likely to have a significant impact on the types of services offered by our industry.


Earlier this month, the European Parliament reached an agreement with the Council of the EU on adjustments to two interlinked files: Capital Requirements Regulation (CRR): adjustments to the securitisation framework; and General framework for securitisation and specific framework for simple, transparent and standardised (STS) securitisation. Leaseurope welcomes this agreement, which is in line with our set of requests to the European Commission to help credit institutions free-up capital so they can continue financing European business’ and households.

The first dossier relates to the approval of a prudential regulatory capital discount for non-performing loan (NPL) securitisations. This supports leasing companies in freeing up their balance sheets from non-performing exposures, which are expected to grow because of the current crisis.

The second dossier creates an STS framework (inspired by that used for true sale securitisations) for balance sheet synthetic securitisations. This regulation will allow credit institutions to reduce capital requirements, enabling our industry to grant more leases to businesses and households. The new regulation also integrates sustainability into the securitisation framework. Technical Standards will be developed to report on the sustainability of securitisation products and the European Banking Authority will draft a proposal for a dedicated framework for sustainable securitisation. Technical work on both texts is now being carried out by the co-legislators. Following this, the agreement must be formally approved by the European Parliament and the Council of the EU. The Secretariat will keep members informed on the final outcome of this work.



From 26-27 January 2021, the European Banking Federation (EBF) and the United Nations Environment Programme Finance Initiative (UNEP FI) are co-organizing an online event to launch a report called “Testing the application of the EU Taxonomy to core banking products - High level recommendations”. Participants from banks, as well as the European Institutions and other market players, will be discussing the challenges in relation to data, general purpose loans, retail lending, and SME lending. You can find more information and register here.


On 27 November the Connected Vehicle Working Group met via conference call.

On 3 December the Board met via conference call.

On 16 December the Prudential Supervision Committee met via conference call.