WRITTEN QUESTION P-4157/00

by Mauro Nobilia (UEN) to the Commission

(9 January 2001)

Subject: Exorbitant interest rate threshold in respect of bank interest in Italy

In Italy, the exorbitant interest rate threshold in respect of bank interest is formally laid down each quarter by the Bank of Italy, as provided by Law No 108/96, thereby converting a fixed interest loan into a variable interest loan. In a recent judgment of 17 November 2000, the Italian Court of Cassation ruled that interest above the exorbitant interest rate threshold laid down by that Law was exorbitant and therefore unlawful and illegal. However, that judgment went further,

formulating the principle that anyone who had in the past charged rates of interest higher than market values had committed an unlawful act (an offence deemed to have been committed on the date of payment of the interest), thus paving the way for the principle propounded to become retroactive. This situation led consumers' associations to call for the repayment of the interest paid at higher rates on loans contracted even before the Law against Exorbitant Interest Rates adopted in April 1996 came into force. On the other hand, the Associazione Banche Italiane (Association of Italian Banks), which represents all the Italian credit institutions, confirmed the validity of the conditions agreed upon initially by the contracting parties, stating in addition that the implications of the Court of Cassation's judgment were untenable for many credit institutions and would necessitate a corresponding reduction in savers' interest on long-term funds and deposits and lead the banks to raise the rates on new loans. The ABI therefore exerted great pressure to have Law No 108/96 amended, together with an amnesty for unlawful acts committed by member institutions against consumers of banking services.

Can the Commission therefore:

- Verify whether the above statements are true?

- Ascertain whether the past and present uniform conduct of the credit institutions can be deemed to constitute the essential elements of an agreement between undertakings capable of distorting competition within the Union market?

- Examine the possibility of adopting, as part of current Community law, measures to protect the interests of individuals and undertakings which have wrongfully paid sums of money to credit institutions on the basis of interest rates declared unlawful because they are above the exorbitant interest rate threshold laid down by the law?

Answer given by Mr Bolkestein on behalf of the Commission

(7 February 2001)

Two complaints have been lodged with the Commission by, on the one hand, the ABI (Italian Banking Association) and the AIBE (Italian External Banking Association) and, on the other, the European Banking Federation regarding Italian Law No 108/96 on usury. They were registered under No 2000/5209. By letter of 22 December 2000, the Commission called on the Italian Government to comment on this entire matter.

The Commission is aware of the various difficulties which the provisions in question, their interpretation or their modification can cause for Community law and it intends to gather the information necessary to conduct a thorough investigation.

On the basis of its findings it will certainly adopt any measures which might prove necessary.

It will also take steps to ensure compliance with the rules on competition laid down in Articles 81 and 81 (former Articles 85 and 86) of the EC Treaty, particularly in the light of the information recently made available to it by a consumer association.