Academic research

The general research question guiding the project is: how, from a qualitative perspective, do different strategies of implementation of duties of Knowledge & Competence (K&C) of Staff created by the Mortgage Credit Directive (MCD) translate in the Staff’s financial literacy in the specific area of mortgage credit agreements (MCA)? The particular research question is: how drawing form the experience of other Member States (MS), can an adequate level of K&C of bank staff members’ selling MCA to financial illiterate consumers (the vast majority of banks’ clients) be ensured in Portugal?

 

The project is being carried out in NOVA School of Law, in partnership with Roma Tre and IFF – Institut für finanzdienstleistungen e.V.

The proposed research project tackles a critical challenge in the realm of consumer financial protection, specifically within the context of MCAs for consumers relating to residential immovable property. The investigation into the K&C duties of banks’ staff, as mandated by the MCD, is poised to address significant gaps in the current understanding and implementation of these duties across MS. Its aim is to contribute to an efficient and effective implementation of the K&C requirements in a context of significant consumer vulnerability stemming from a poor level of financial literacy. This endeavor is crucial, as the degree to which banks adhere to these K&C duties directly impacts the quality of information and advice provided to consumers, thereby influencing consumer protection and market stability.

 

The objectives of this research are notably ambitious and represent an unusual approach beyond the current state of the art from different perspectives. Firstly, the project adopts an interdisciplinary methodology that bridges legal analysis with social science-based empirical research. This blend of methodologies is designed to provide a more holistic understanding of the effectiveness of K&C duties implementation and its influence on staff financial literacy and consumer protection. Additionally, the project’s own approach and design sets a novel and different perspective of addressing the problem of financial literacy: with an intervention on the side of the agent offering the services, not the consumer. Furthermore, the comparative analysis across three legal systems (Portugal, Italy, and Germany) introduces an ambitious cross-border perspective that is rare in existing studies.

This comparison aims to unearth the diversity in implementing the Directive’s requirements, shedding light on best practices and areas for improvement across different regulatory environments.

 

The research will culminate in the development of a normative compound for the enhancement of K&C compliance, potentially setting a new benchmark for policy and regulatory reform in national settings, in particular, the Portuguese one, and the European Union (EU). The envisaged structure of this normative compound encompasses several multilevel guidelines and recommendations addressed not only at legislative and regulatory actions by the competent authorities, but also at the practices performed by financial institutions and training entities.

 

By pushing the boundaries of traditional legal research and incorporating empirical, social science methodologies, the project sets a precedent for future studies in the field. It not only addresses an urgent and important challenge by seeking to improve consumer protection in the mortgage credit market but also pioneers a methodological shift that could influence interdisciplinary research approaches in socio-legal studies.