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17 September 2010
Legislative Decree 141/2010 has implemented the EU Consumer Credit Directive (2008/48/EC) in Italy. The decree enters into force on September 19 2010.(1)
The decree amends the Banking Law with particular reference to entities operating in the financial sector, including financial agents and credit brokers. 'Financial agents' are defined as entities promoting and entering into agreements connected with the provision of loans and payment services under mandate by financial intermediaries, payment institutes and e-money institutes. 'Credit brokers' are defined as entities promoting and offering advice on connections between banks or financial intermediaries and potential customers (ie, consumers) for the granting of loans.
In order to increase consumer protection, the decree regulates the advertising of consumer credit. The previous framework, which set out only general transparency obligations, has been replaced by specific provisions regarding the content of advertisements.
The new rules on pre-contractual duties impose certain information obligations on lenders or intermediaries in order to make potential consumers aware of the terms of the proposed loan (or other transaction) and its consistency with their needs. Such information must be provided in a particular format, including the standard European consumer credit information form (with additional information attached as appropriate). These duties are seen as a less strict suitability evaluation for the proposed loan or other transaction. The new rules declare void all contractual clauses that impose costs on the client that are not fully included in the annual percentage rate disclosed in the pre-contractual documentation.
In addition, a consumer has:
The Bank of Italy is required to issue regulations in order to provide specific implementation provisions, mainly regarding the content and disclosure of advertising and the drafting criteria applicable to pre-contractual documentation.
Intermediaries may no longer include clauses in fixed-term agreements (eg, loan agreements) that allow the lender to change interest rates unilaterally. Such clauses are permitted in open-end agreements, but only where they are reasonably justified.
The law is reinforced by provisions under the so-called Bersani Decree (Legislative Decree 223/2006) concerning loan portability (ie, from one credit institution to another during the loan period), early termination and withdrawal at no charge. The provisions previously applied only to personal loans (eg, residential loans), but now apply to loans for commercial activities.
The decree adds a new Article 111 to the law, introducing a new form of financial intermediary. Such intermediaries may grant micro-credit or loans to individuals, partnerships or cooperatives. Several limitations apply, including the following:
Financial intermediaries will be enrolled - subject to certain requirements - in a register managed by a private board whose members will be appointed by the Ministry of Finance and Economy.
The decree amends the law to include new rules regarding financial agents and credit brokers. Among other things, it provides that:
For further information on this topic please contact Mia Rinetti, Carlo Trucco or Giulia Corti at Pavia e Ansaldo by telephone (+39 02 855 81), fax (+39 02 8901 1995) or email (email@example.com, firstname.lastname@example.org or email@example.com).
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