Urgent Decree of the Minister of Economy and Finance, President of the CICR, of 3 August 2016, No. 343

Secretariat of the Interministerial Committee for Credit and Savings

The Minister of Economy and Finance
President of the Interministerial Committee for Credit and Savings

No. 343

HAVING REGARD TO Article 120, paragraph 2, of Legislative Decree No. 385 of 1 September 1993 (Consolidated Banking Act - TUB), as amended by Article 17-bis of Decree-Law No. 18 of 14 February 2016, converted into Law No. 49 of 8 April 2016, which grants the CICR the power to establish methods and criteria for the production of interest in operations carried out in the exercise of banking activities;

HAVING REGARD TO Article 114-quinquies.3 of the TUB, which provides for the applicability to electronic money institutions of the provisions contained in Title VI of the same TUB;

HAVING REGARD TO Article 114-undecies of the Consolidated Banking Act, which provides for the applicability to payment institutions of the provisions contained in Title VI of the same TUB;

HAVING REGARD TO Article 115, paragraph 1, of the TUB, which establishes that the provisions on transparency of contractual conditions in banking and financial operations and services, contained in Chapter I of Title VI of the same TUB, apply to activities carried out on the territory of the Republic by banks and financial intermediaries;

HAVING REGARD TO Article 119, paragraph 1, of the TUB, which assigns to the CICR the task of indicating the content and method of communications relating to the conduct of the relationship that, pursuant to the same paragraph, the subjects referred to in Article 115 of the TUB must provide to the client in continuing contracts;

HAVING REGARD TO Article 127, paragraph 3, of the TUB, which provides that deliberations within the competence of the CICR provided for in Title VI of the same Consolidated Act are adopted on the proposal of the Bank of Italy, in agreement with CONSOB;

HAVING REGARD TO the Decree of the Minister of Economy and Finance of 30 June 2012, No. 644, published in the Official Gazette of 5 July 2012, No. 155, concerning the regulation of remuneration of credit facilities and overdrafts in implementation of Article 117-bis of the Consolidated Banking Act;

ON PROPOSAL formulated by the Bank of Italy, in agreement with CONSOB;

DEEMING it urgent to act, pursuant to and for the effects of Article 3, paragraph 2, of the TUB;

HEREBY DECREES

Art. 1
(Definitions)

1. For the purposes of this measure, the following are defined:

• "client", any subject who has a contractual relationship with an intermediary. Banks, finance companies, electronic money institutions, payment institutions, insurance companies, investment firms, collective investment undertakings for collective investment, alternative investment funds, asset management companies, centralized management companies of financial instruments, pension funds, Poste Italiane S.p.A., Cassa Depositi e Prestiti, and any other subject carrying out financial intermediation activities are not considered clients. Companies having a financial nature that are parent, subsidiary, or under common control of the aforementioned subjects are also not considered clients;
• "intermediary", banks, financial intermediaries referred to in Article 106 of the TUB, and other subjects authorized to professionally provide financing to which Title VI of the TUB applies;
• "payment account", the account as defined in Article 1, paragraph 1, letter l), of Legislative Decree No. 11 of 27 January 2010.

Art. 2
(Purpose and Scope of Application)

1. This decree implements Article 120, paragraph 2, of the TUB and applies to savings collection and credit operations between intermediaries and clients regulated under Title VI of the TUB.
2. The production of interest in the operations referred to in paragraph 1 is regulated according to the methods and criteria indicated in Articles 3 and 4.
3. The imputation of payments is regulated in conformity with Article 1194 of the Civil Code.

Art. 3
(Interest Regime)

1. In the operations indicated by Article 2, paragraph 1, including financing based on credit cards, accrued debtor interest may not produce interest, except for default interest.
2. The provisions of the Civil Code apply to default interest.
3. In current account or payment account relationships, the same periodicity, in any case not less than one year, is ensured in the calculation of creditor and debtor interest. Interest is calculated on 31 December of each year and, in any case, at the end of the relationship for which it is due; for contracts concluded during the year, the calculation is performed on 31 December.

Art. 4
(Accrued Interest in Relation to Credit Lines Settled in Current and Payment Accounts and Overdrafts)

1. This Article applies:
   a) to credit lines settled in current accounts as referred to in Article 2, paragraph 1, letter a), of the Decree of the Minister of Economy and Finance of 30 June 2012, No. 644, published in the Official Gazette of 5 July 2012, No. 155, and to those settled in payment accounts even when the availability on the account, in the form referred to in Article 1842 of the Civil Code, is generated by advance operations on credits and documents; b) to overdrafts as referred to in Article 2, paragraph 1, letters b), c), and d), of the aforementioned Decree of the Minister of Economy and Finance of 30 June 2012, No. 644, as defined by Article 1, paragraph 1, letter d), of the aforementioned Decree.
2. For credit opening contracts that are concluded and exhausted within the same calendar year, only paragraph 7 applies.
3. Accrued debtor interest is accounted for separately from the principal capital. The periodic balance of the principal capital produces interest in compliance with what is established by this Article.
4. Accrued debtor interest becomes due on 1 March of the year following that in which it accrued. The client must in any case be assured a period of thirty days from receipt of the communications provided for under Article 119 or 126-quater, paragraph 1, letter b), of the TUB before the accrued interest becomes due. The contract may provide for different terms if in favor of the client.
5. Pursuant to Article 120, paragraph 2, letter b), of the TUB, the client may authorize, even in advance, the debit of interest on the account at the moment when it becomes due; in this case, the debited sum is considered principal capital; the authorization is revocable at any time, provided that before the debit has taken place.
6. The contract may stipulate that, from the moment when interest becomes due, funds credited to the intermediary's account and destined to flow into the client's account on which the financing is settled are used to extinguish the interest debt.
7. Without prejudice to what is provided by Article 2, paragraph 3, in the event of definitive closure of the relationship, interest is immediately due. The balance relating to the principal capital may produce interest, as provided by the contract; amounts due by way of interest do not produce further interest.

Art. 5
(Final Provisions)

1. Intermediaries apply this decree, at the latest, to interest accrued starting from 1 October 2016.
2. Ongoing contracts are adapted with the introduction of clauses compliant with Article 120, paragraph 2, of the TUB and this decree, pursuant to Articles 118 and 126-sexies of the TUB. The adaptation constitutes justified cause pursuant to Article 118 of the TUB. On the clause containing the authorization provided for in Article 4, paragraph 6, the express consent of the client must be obtained, as provided by Article 117, paragraph 1, of the TUB. For contracts that do not provide for the application of Articles 118 and 126-sexies of the TUB, intermediaries propose to the client the adaptation of the contract by 30 September 2016.
3. Pursuant to Article 127, paragraph 1, of the TUB, the provisions of this decree may be derogated only in a sense more favorable to the client.

This decree shall be published in the Official Gazette of the Italian Republic.

Rome, dated - 3 AUG. 2016

THE MINISTER
(Signature)