The Italian Competition Authority, at its meeting on 23 December 2008, decided to accept and render binding the commitments proposed by Banca Monte dei Paschi di Siena, UniCredit Banca di Roma, Banca Nazionale del Lavoro and Intesa Sanpaolo in the separate proceedings  begun on 4 July 2008 to investigate alleged improper commercial practices in the application of their Maximum Overdraft Commission.

In the Authority’s view, the commitments offered by the Banks introduce important improvements, in terms of information as well as of substance, in the application of the commission charge: the information and contractual documentation explains the conditions better and is accompanied by sufficiently clear worked examples.

All of the Banks have also offered to apply commissions different from the Maximum Overdraft one so that consumers, given the transparency of the information, can make an informed choice among the various options, choosing the one they consider most cost-effective for their particular credit requirements and the use they intend to make of the loan. In order to ensure this freedom of choice is ongoing, the Banks must periodically inform their customers of the total cost of the credit limit provided according to the economic conditions they have chosen. That cost must include not only the debit interest but also every other applicable charge. At the same time, the Banks must also quantify the costs the customers would have sustained if they had chosen alternative conditions.

In monitoring the implementation of these measures, the Authority will obviously take into consideration any changes to the regulatory framework. In any case the proposals currently  under discussion in Parliament are complementary to the commitments now made binding by the Antitrust Authority, with the common aim of protecting consumers.

More specifically:

MPS - Banca Monte dei Paschi di Siena is introducing a new commission as an alternative to the present Maximum Overdraft Commission, called the “Agreed Charge” which is proportional to the agreed overdraft and takes account of the number of days it is in force.

UNICREDIT BANCA DI ROMA - UniCredit Banca di Roma has created a new short-term financing product with a simplified price structure and without the Maximum Overdraft Commission; this product carries a new commission called “Charge for the immediate availability of funds” which is proportional to the amount and duration of the credit line agreed upon. This is a fixed commission in that it does not increase with greater use of the credit line but represents a “flat fee” for the availability of the same and can be calculated much more simply. The introduction of a new offering of this kind, then, should allow for greater transparency and comparability of prices.

BNL – BNL has committed to introducing by the end of the first quarter 2009 a new type of current account: if a credit line is granted, the new Commission on the Agreed Sum will apply as a percentage of the amount granted by the Bank to the customer. This commission remunerates the Bank for its undertaking to keep a certain sum available for the current account holder instead of using it for possible alternative investments.

INTESA SANPAOLO - Intesa Sanpaolo is using a new formula in place of the Maximum Overdraft Commission: this involves a “commission on unused funds” to be applied when the customer does not make use of the amount set aside by the Bank at the time the line of credit was granted.

Rome, 19 January 2009