Deliberations of the CICR and Urgent Decree of the Minister of Economy and Finance, President of the CICR, of 3 February 2011, No. 117

• Secretariat of the Interministerial Committee for Credit and Savings

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

HAVING REGARD TO Title VI, Chapter II ("Consumer Credit") of Legislative Decree No. 385 of 1 September 1993 (hereinafter, "TUB"), as substituted by Legislative Decree No. 141 of 13 August 2010, and in particular:
a) Article 121, paragraph 3, of the TUB, which assigns to the Bank of Italy, in accordance with the deliberations of the CICR, the task of establishing the methods for calculating the APR; b) Article 122, paragraph 4, of the TUB, which provides that for payment installments and other favorable repayment methods for an existing debt, agreed between the parties following a consumer's default, the provisions of Chapter II of the TUB apply only partially, in the cases established by the CICR; c) Article 123, paragraph 2, of the TUB, according to which the Bank of Italy, in accordance with the deliberations of the CICR, specifies the characteristics of the information to be included in advertising announcements and the methods of their dissemination; d) Article 124, paragraph 7, of the TUB, which entrusts to the Bank of Italy, in accordance with the deliberations of the CICR, the implementation of the rules on pre-contractual obligations of lenders, with reference to the characteristics of pre-contractual information, the adequate clarifications to be provided to the consumer, as well as specific obligations or derogations to be observed in certain cases; e) Article 124-bis, paragraph 3, of the TUB, which delegates to the Bank of Italy, in accordance with the deliberations of the CICR, the implementation of provisions regarding the verification of the consumer's creditworthiness; f) Article 125, paragraph 1, of the TUB, which provides for the access of lenders from Member States of the European Union to credit databases on non-discriminatory terms compared to those guaranteed to Italian lenders and entrusts the CICR, after hearing the Data Protection Authority, with identifying the conditions of access; g) Article 125-bis of the TUB, containing the rules on credit contracts and related communications, which:

• in paragraph 1 provides that the Bank of Italy, in accordance with the deliberations of the CICR, identifies the information and conditions to be included in credit contracts;

• in paragraph 4 establishes that the Bank of Italy, in accordance with the deliberations of the CICR, determines the content and methods of periodic communications to the consumer regarding the progress of the financing relationship;
  h) Article 125-septies, paragraph 2, of the TUB, which provides for a communication to the consumer of the assignment of credit, according to the methods defined by the Bank of Italy, in accordance with the deliberations of the CICR;

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

2. i) Article 125-octies, paragraph 3, of the TUB, which provides, in the case of significant overdrafts lasting more than one month, the consumer's right to receive a communication regarding the overdraft and entrusts to the Bank of Italy, in accordance with the deliberations of the CICR, the setting of the deadline for sending the communication and the criteria for determining the extent of the overdraft;
   j) Article 125-novies, paragraph 3, of the TUB, which delegates to the CICR the regulation of the obligation of the credit intermediary to communicate to the lender any compensation due to it by the consumer for the purposes of calculating the APR;

HAVING REGARD TO Title VI, Chapters I ("Banking and Financial Operations and Services") and III ("General Rules and Controls") of the TUB, as substituted by the same Legislative Decree No. 141 of 13 August 2010, and in particular:
a) Article 116, paragraph 3, of the TUB, which attributes to the CICR the power to issue provisions on the advertising of operations and services; b) Article 118, paragraph 2, of the TUB, which provides that in bearer relationships, the communication to the client of unilateral changes to contractual conditions is carried out according to the methods established by the CICR; c) Article 119, paragraph 1, of the TUB, which attributes to the CICR the power to indicate the content and methods of periodic communications to customers; d) Article 120-bis of the TUB, which delegates to the CICR the identification of cases in which the client may be asked to reimburse expenses related to additional services requested by him upon withdrawal from an indefinite-term contract; e) Article 127 of the TUB, which:

• in paragraph 1 attributes to Credit Authorities the power to issue provisions on organization and internal controls in order to promote the transparency of contractual conditions and the correctness of relationships with customers;
• in paragraph 1-bis provides that the rules of Title VI of the TUB apply to guarantee associations listed in the register provided for in Article 112, as established by the CICR;
  f) Article 127-bis of the TUB, which delegates to the CICR the definition of the limits and conditions under which, in financing contracts, the delivery of personalized documents may be subject to the payment of processing fees;

HAVING REGARD TO the CICR Deliberation of 4 March 2003, concerning "Regulation on the transparency of contractual conditions of banking and financial operations and services";

CONSIDERING the need to implement the new provisions of the TUB regarding consumer credit, in conformity with Directive 2008/48/EC, and to adapt the transparency regulation adopted in 2003 to the innovations introduced subsequently and to the modifications made by Legislative Decree No. 141 of 13 August 2010;

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

DEEMING that the objective of ensuring the organicity and coherence of the transparency regulation requires the coordination of the implementation provisions of Chapter II of Title VI of the TUB with those adopted under other Chapters of the same Title VI;

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

HEARING the Data Protection Authority, with reference to the implementation of Article 125, paragraph 1, of the TUB;

DEEMING the urgency of providing for measures, pursuant to and for the effects of Article 3, paragraph 2, of the TUB;

DECREES

SECTION I

Article 1
(Purposes and General Principles)

1. This Section implements Chapter II of Title VI of the TUB. In harmony with the rules and objectives of Community law, it aims to promote the transparency and efficiency of the consumer credit market, the diffusion of responsible practices in the granting of credit, and to ensure a high degree of consumer protection.

2. The information and explanations provided for by this Section are rendered in a correct, clear, complete, and concise manner, appropriate to the communication tool used, the characteristics of the credit contract, and, when personalized, to the needs of the consumer, thereby favoring comparison between different credit offers on the market and enabling the consumer to make informed and conscious decisions regarding the conclusion of a credit contract.

3. When the information and explanations are contained in documents, these are drafted in compliance with the provisions regarding structure and content provided for by Directive 2008/48/EC, according to methods that ensure graphic readability, syntactic simplicity, lexical clarity, structural logic, and are presented in a manner consistent with the communication tool used.

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4.
The Minister of Economy and Finance
President of the Interministerial Committee for Credit and Savings

Article 2
(Scope of Application)

1. This Section applies to consumer credit contracts, as defined by Article 121, paragraph 1, letter c), of the TUB and with the exceptions provided for in Article 122 of the TUB (hereinafter "credit contracts").

2. With regard to credit cards, the Bank of Italy issues provisions to coordinate the application of the rules on consumer credit with those on payment services, respectively under Chapters II and II-bis of Title VI of the TUB, and to identify the characteristics of credit cards that, performing solely payment functions, are subject only to the rules on payment services.

3. The derogation provided for in Article 122, paragraph 4, of the TUB applies to payment installments and other favorable repayment methods for an existing debt, agreed between the parties following a consumer's default, when both of the following conditions are met:
   a) the agreement between the parties offers the consumer greater probability of avoiding judicial proceedings related to the default; b) the conditions of the agreement are not less favorable for the consumer compared to those of the initial credit contract.

Article 3
(Calculation of the APR)

1. Pursuant to Article 121, paragraph 3, of the TUB, the Bank of Italy establishes the methods for calculating the APR in conformity with Article 121, paragraph 2, of the TUB, Article 19, and Annex I of Directive 2008/48/EC.

Article 4
(Advertising Announcements)

The Bank of Italy specifies the methods of dissemination of advertising announcements related to credit contracts in conformity with Article 123 of the TUB and Article 4 of Directive 2008/48/EC. For advertising announcements that do not report the interest rate or other figures concerning the cost of credit, Article 7 of the Deliberation of 4 March 2003 applies.

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

Article 5
(Pre-contractual Information)

1. Pursuant to Article 124 of the TUB, the Bank of Italy defines, in conformity with Articles 5 and 6 of Directive 2008/48/EC, the list of information that the consumer has the right to receive before the conclusion of the credit contract.

2. Before the conclusion of the credit contract, the lender also ensures that the consumer can easily and freely obtain clarifications that allow him to evaluate whether the proposed contract is suitable for his needs and financial situation. The Bank of Italy, through provisions on organization and internal controls, regulates the methods and extent of assistance to be provided to ensure that the clarifications:
   a) respond to questions formulated by the consumer regarding the pre-contractual documentation provided to him, the characteristics of the offered product, and the effects that may derive from the conclusion of the contract; b) can be obtained by the consumer orally or otherwise through distance communication techniques that allow for individual interaction; c) are provided by personnel possessing adequate and updated knowledge of the credit contracts offered, consumer rights, and the regulation adopted pursuant to this Section.

3. The obligation to provide the consumer with clarifications regarding the credit contract pursuant to paragraph 2 does not apply to credit line openings in current accounts repayable upon the bank's request or within three months from withdrawal, to non-gratuitous payment installments, and to other favorable repayment methods for existing credit, agreed between the parties following a consumer's default.

4. The Bank of Italy defines specific and additional consumer assistance measures compared to those provided for in the preceding paragraphs for the case where the credit contract is offered concurrently with accessory services or other contracts, including credit, not linked pursuant to Article 121, paragraph 1, letter d), of the TUB; such measures ensure the consumer clear information on the existence and effects of the connection with other contracts.

5. For credit contracts marketed via telephony, the description of the main characteristics of the financial service provided for in Article 67-novies of the Consumer Code includes at least the information provided for in Articles 5, paragraph 2, and 6, paragraph 4, of Directive 2008/48/EC.

6. The obligations provided for in the preceding paragraphs also apply in the case of offers through credit intermediaries, according to the methods established by the Bank of Italy, which take into account the organizational and operational specifics connected to the use of subjects, other than financial activity agents and credit brokers, for whom credit intermediation does not constitute the main purpose of their commercial or professional activity.

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

Article 6
(Verification of Consumer Creditworthiness)

1. In order to avoid imprudent behavior and ensure responsible practices in the granting of credit, lenders fulfill the obligation to verify the consumer's creditworthiness, provided for in Article 124-bis of the TUB, by applying the procedures, methodologies, and techniques related to the assessment and monitoring of customer creditworthiness provided for the purposes of the sound and prudent management of entities supervised under Articles 53, 67, 108, 109, and 114-quaterdecies of the TUB and their implementing provisions.

Article 7
(Databases)

1. Non-discriminatory access to databases containing nominal credit information ("databases"), provided for by Article 125 of the TUB, is permitted to lenders from Member States of the European Union authorized in conformity with the legislation of the Member State of origin or where they operate ("lenders"), who intend to acquire information on a consumer who has requested or received financing regulated by Directive 2008/48/EC or on subjects with the same co-obligors, even jointly. The information thus acquired may be used exclusively for the assessment of the consumer's creditworthiness.

2. Access to databases by lenders from Member States of the European Union other than Italy is permitted within limits and on non-discriminatory contractual conditions compared to those provided for for lenders having their seat or otherwise established in Italy ("Italian lenders"). In particular, equivalent conditions are practiced regarding costs and quality of the data access service, methods for its use, and the quantity and type of information provided.

3. Database managers may subordinate the access of the lenders referred to in paragraph 2 to the communication, by the latter, of the information in their possession on the consumer for whom the database was queried, in compliance with legislation on personal data protection. Any limitations provided for by the legislation of the lender's country of origin remain unaffected.

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7.
1.
The Minister of Economy and Finance
President of the Interministerial Committee for Credit and Savings

Article 8
(Contracts)

Pursuant to Article 125-bis, paragraph 1, of the TUB, the Bank of Italy specifies the information and conditions to be inserted in credit contracts in conformity with Article 10 of Directive 2008/48/EC.

Article 9
(Periodic Communications)

1. Pursuant to Article 125-bis, paragraph 4, of the TUB, in credit contracts of indefinite duration, the lender provides the consumer with a complete and clear communication at least annually to ensure that the consumer has a periodically updated overview of the economic conditions applied and the progress of the relationship.

Article 10
(Assignment of Credit)

1. In the cases provided for in Article 125-septies of the TUB, the consumer is informed of the assignment of credit with an individual communication according to the methods provided by the Bank of Italy. Cases are reserved where collective communication is permitted by law.

Article 11
(Communication of Overdraft)

1. Pursuant to Article 125-octies of the TUB, the Bank of Italy establishes, for the case where an overdraft has occurred:
   a) the deadline for sending the communication regarding the overdraft to the consumer, which cannot exceed the third working day following the expiration of the month of the persistence of the overdraft; b) the conditions under which the overdraft is to be considered significant, taking into account the amount of sums used or the overall burden that the overdraft entails for the consumer.

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

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Article 12
(Credit Intermediaries)

When the consumer must pay a compensation to the credit intermediary for his services, pursuant to Article 125-novies of the TUB, the credit intermediary communicates to the lender the amount of such compensation according to the methods agreed upon, in any case in sufficient time for the lender to take it into account in the calculation of the APR.

Article 13
(Implementation and Repeal)

The Bank of Italy issues implementing provisions for this Section, also to coordinate the rules on consumer credit with those adopted pursuant to the Deliberation of 4 March 2003, as modified by Article 14.

The Decree of the Minister of the Treasury of 8 July 1992, concerning "Regulation and criteria for the definition of the annual percentage rate of charge for the granting of consumer credit", as modified by the Decree of the Minister of the Treasury of 6 May 2000, is repealed as of the date of entry into force of the regulation adopted by the Bank of Italy pursuant to paragraph 1.

Until the entry into force of the Bank of Italy provisions provided for in paragraph 1, the pertinent provisions of the Bank of Italy in force at the time of the entry into force of this Section continue to apply.

For contracts in progress at the time of the entry into force of the Bank of Italy provisions provided for in paragraph 1, the same apply in conformity with Article 30 of Directive 2008/48/EC and within the limits provided therein. For remaining aspects, such contracts remain regulated by the Decree of the Minister of the Treasury of 8 July 1992 recalled in paragraph 2 and by the pertinent provisions of the Bank of Italy in force at the time of the entry into force of this Section.

SECTION II

Article 14
(Modifications to the Deliberation of 4 March 2003)

The following modifications are made to the Deliberation of 4 March 2003:

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

a) to Article 1, the following modifications are made:

• the heading is replaced by the following "Definitions and Scope of Application"
• in paragraph 1, letter b), is replaced by the following:
  «b) "intermediaries", banks and financial intermediaries»;
• after paragraph 1, the following paragraphs are inserted:
  9,
  «1-bis, Unless otherwise provided by paragraph 1-ter, this Deliberation applies to operations and services that, alternatively, are:
  a) regulated by Chapter I of Title VI of the TUB; b) marketed together with those referred to in letter a), in the cases and limits regulated by the Bank of Italy, without prejudice to the application of Legislative Decree No. 58 of 24 February 1998, and subsequent amendments, to services and products identified by Article 23, paragraph 4, of the same Legislative Decree, as well as to composite products whose exclusive or predominant purpose is investment; c) regulated through a reference to provisions of Title VI of the TUB to which this Deliberation gives effect. 1-ter, Section III-bis also applies to operations and services regulated by Chapters II and II-bis of Title VI of the TUB.»; b) to Article 3, after paragraph 1, the following is inserted: "1-bis. The Bank of Italy may establish that the provisions of this Section do not apply, in whole or in part, to offers directed to non-retail clients or relating to operations and services little known to the public"; c) to Article 4, the following modifications are made:

1. the heading is replaced by the following: "Documents on Client Rights and Protection Tools";
2. the words from "expose" to "banking" are replaced with the following: "make available to clients informative documents on the main rights recognized to them and on protection tools";
   d) to Article 5, paragraph 1, after the word "containing", the following are inserted: "also in separate documents"; e) to Article 6:
   the words "the notice" are replaced by the following: "the documents"; after paragraph 2, the following is inserted: "2-bis. The Bank of Italy identifies the cases in which an intermediary must publish documents and information sheets on an internet site".

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

10. f) to Article 8, after paragraph 1, the following is inserted: "1-bis. In financing contracts, when the determination of economic conditions is carried out based on processing, the delivery to the client of personalized documents may be subject to the payment of processing fees, as established by the Bank of Italy".
    g) after Article 10, the following is inserted:
    «Article 10-bis
    (Withdrawal from Indefinite-Term Contracts)
11. Reimbursement to intermediaries of expenses incurred in relation to additional services requested by the client who withdraws from a contract pursuant to Article 120-bis of the TUB is possible only in relation to services not necessary for the exercise of withdrawal or, if necessary, only when the service presupposes the intervention of a third party and the related expenses have been advertised and reported in the contract.»
    h) Article 11 is thus replaced:
    «Article 11
    (Communication of Contractual Variations in Bearer Relationships)
12. In bearer relationships, unilateral changes to contractual conditions pursuant to Article 118 of the TUB are communicated to customers using impersonal communication tools easily accessible at the intermediary's premises and on its internet site, if existing.»;
    i) after Section III, the following is inserted:
    "SECTION III-bis
    Article 12-bis
    (Organizational Requirements)
13. Intermediaries adopt organizational and internal control procedures to ensure the correctness of their behavior in all phases of the relationship with clients and, in particular:
    the comprehensibility of the products offered by the clients to whom they are destined and their conformity to the law;

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1J.
The Minister of Economy and Finance
President of the Interministerial Committee for Credit and Savings

the conformity of the documentation prepared with the provisions and principles provided for pursuant to Title VI of the TUB; the reliability of product marketing practices, having regard also to the professionalism and structure of incentives of staff involved in the sale."