Urgent Decree of the Minister of Economy and Finance, President of the CICR, No. 380 of 29 September 2016

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. 380

HAVING REGARD TO Legislative Decree No. 385 of 1 September 1993, and subsequent amendments, containing the Consolidated Act of Laws on Banking and Credit (TUB);

HAVING REGARD TO Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property, amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010;

HAVING REGARD TO Legislative Decree No. 72 of 21 April 2016, implementing Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property, as well as amendments and integrations to Title VI-bis of the TUB, regarding the regulation of financial activity agents and credit intermediaries, and to Legislative Decree No. 141 of 13 August 2010;

HAVING REGARD TO Chapter I-bis ("Consumer Mortgage Credit") of Title VI of the TUB and, in particular:

• Article 120-quinquies, paragraph 3, which assigns to the Bank of Italy, in accordance with the resolutions of the CICR, the task of establishing the methods for calculating the Annual Percentage Rate of Charge (APRC);

• Article 120-octies, paragraph 4, according to which the CICR, upon proposal by the Bank of Italy, specifies the characteristics of the information to be included in advertising announcements, the methods for their dissemination, and the criteria for defining the representative example;

• Article 120-novies, paragraph 6, which entrusts the CICR, upon proposal by the Bank of Italy, with the implementation of the regulations on the pre-contractual obligations of lenders, also with reference to: the content, drafting criteria, and methods for making pre-contractual information available; the methods and scope of clarifications to be provided to the consumer; the specific obligations to be observed in cases of communications via voice telephony, also providing additional information compared to what is provided for in Article 67-novies of the Consumer Code; the information to be provided to the consumer regarding the content and possible effects of the agreement provided for in Article 120-quinquiesdecies, paragraph 3, of the TUB;

• Article 120-quaterdecies, paragraph 2, pursuant to which the CICR, upon proposal by the Bank of Italy, may establish conditions for the right to convert the currency in which the financing is denominated, with particular regard to: the minimum variation in the exchange rate that must have occurred compared to the time of contract conclusion, in any case not exceeding that indicated in paragraph 4 of Article 120-quaterdecies; the all-inclusive compensation that the consumer may be required to pay the lender based on the contract;

HAVING REGARD TO Article 3, paragraph 2, of Legislative Decree No. 72 of 2016, which establishes that Articles 120-octies and 120-novies of Legislative Decree No. 385 of 1 September 1993, apply from 1 November 2016, and that the implementing provisions of the aforementioned articles are issued by 30 September 2016;

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

HAVING REGARD TO the Decree adopted in an urgent manner by the Minister of Economy and Finance in the capacity of President of the CICR of 3 February 2011, No. 117, containing "Regulation on credit to consumers and amendments to the Resolution of 4 March 2003 on the matter of transparency of contractual conditions of banking and financial operations and services";

HAVING REGARD TO the Provision of the Bank of Italy of 24 March 2010, containing "Regulation on the adoption of acts of a normative or general content by the Bank of Italy in the exercise of banking and financial supervision functions, pursuant to Article 23 of Law No. 262 of 28 December 2005" and, in particular, Articles 1, 3, 4, and 8;

CONSIDERING the need to implement the new provisions of the TUB regarding consumer mortgage credit, in conformity with Directive 2014/17/EU of the European Parliament and of the Council;

CONSIDERING that the prerequisites set forth in Article 3, paragraph 3, and in Article 8, paragraph 1, third indent, of the Provision of the Bank of Italy of 24 March 2010, are met, and therefore the proposal of the Bank of Italy was formulated without first conducting a regulatory impact analysis and carrying out a public consultation, given the deadline provided for in Article 3, paragraph 2, of Legislative Decree No. 72 of 2016, and the time necessary for the issuance of the implementing discipline of the present decree by the Bank of Italy;

ON PROPOSAL of the Bank of Italy, formulated in agreement with CONSOB, pursuant to Article 127, paragraph 3, of the TUB;

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

DECREES

Article 1
(Purposes and General Principles)

1. This decree implements Chapter I-bis of Title VI of the TUB. In harmony with the rules and objectives of Community law, it aims to achieve a transparent and efficient internal market for mortgage credit, guaranteeing consumers a high level of protection.

2. The information and explanations provided for by this decree are rendered in a correct, clear, understandable, and non-misleading manner, adequate to the communication tool used, the characteristics of the credit contract, and, when personalized, to the consumer's needs, thereby favoring comparison between different credit offers on the market and enabling the consumer to evaluate their implications and make an informed and conscious decision regarding the conclusion of the 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 by Directive 2014/17/EU, 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.

Article 2
(Scope of Application)

1. This decree applies to consumer mortgage credit contracts as defined by Article 120-quinquies, paragraph 1, letter c), of the TUB and with the exceptions provided for in Article 120-sexies of the TUB (hereinafter "credit contracts").

Article 3
(Calculation of the APRC)

1. Pursuant to Article 120-quinquies, paragraph 3, of the TUB, the Bank of Italy establishes the methods for calculating the APRC in conformity with Article 120-quinquies, paragraph 1, letter m), and paragraph 2 of the TUB, Article 17, and Annex I of Directive 2014/17/EU.

Article 4
(Advertising Announcements)

1. Pursuant to Article 120-octies of the TUB, advertising announcements relating to credit contracts are disseminated in methods conforming to what is established by Article 11 of Directive 2014/17/EU and contain a clear, concise, and realistic representative example as provided for by the same article of the Directive.

2. Advertising announcements that do not report the interest rate or other figures concerning the cost of credit specify their nature as advertising messages and indicate that the documentation provided for pre-contractual information is available to customers.

Article 5
(Pre-contractual Information)

1. Pursuant to Article 120-novies of the TUB, before the conclusion of the credit contract, the consumer has the right to receive the general and personalized information provided for in Articles 13 and 14 and Annex II of Directive 2014/17/EU.

2. Before the conclusion of the credit contract, the lender ensures that the consumer can easily and free of charge obtain clarifications that allow them to evaluate whether the proposed contract is suitable for their needs and financial situation. To this end, the lender adopts organizational and internal control procedures regarding the methods and scope of assistance to be provided to the consumer, thereby ensuring that the clarifications:

a. respond to questions formulated by the consumer regarding the pre-contractual documentation provided to them, the characteristics of the proposed contract, and the effects that may derive from its conclusion;

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 discipline adopted pursuant to this decree.

3. For credit contracts marketed via telephony, the description of the main characteristics of the contract provided for in Art. 67-novies of the Consumer Code includes at least the information provided for in Article 14, paragraph 10, and Annex II of Directive 2014/17/EU.

4. The obligations provided for in the preceding paragraphs also apply in the case of offers through credit intermediaries.

5. If the credit contract contains the clause provided for in Article 120-quinquiesdecies, paragraph 3, of the TUB, the consumer is provided with information on the specific content of the clause, on the characteristics of the default referred to in paragraph 4, letter c), of the same Article 120-quinquiesdecies, and on the possible effects for the consumer.

Article 6
(Financing Denominated in Foreign Currency)

1. The consumer has the right to convert the foreign currency in which the credit is denominated, pursuant to Article 120-quaterdecies of the TUB, when, compared to the time of contract conclusion, a variation in the exchange rate equal to or greater than 20 percent has occurred.

2. For the exercise of the right of conversion, the consumer may be required to pay the lender, if provided for by the credit contract, an all-inclusive compensation that takes into account the nature and extent of the costs that the lender may be required to bear in relation to the conversion of the financing into a currency different from that in which the credit was denominated at the time of contract conclusion.

Article 7
(Amendments to the Resolution of 4 March 2003)

1. In Article 1, paragraph 1-ter, of the Resolution of 4 March 2003, after the word "capi" (chapters), the following are inserted: "I-bis,".

Article 8
(Final Provisions)

1. The Bank of Italy issues implementing provisions of this decree.

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

Rome, dated 29 September 2016

THE MINISTER