Banking Law

The application of interest rates may constitute usury if it exceeds the limit set quarterly by law (Usury Threshold Rate – TSU). This may occur at the time of signing the contract (original usury) or during the contractual relationship (incidental usury) due to economic changes. The check is extended to all financing costs, including charges, expenses and commissions (i.e. APR/CIR). The preliminary consultancy activity consists of a technical-economic analysis of the contract and of the account statements, to ascertain, through specialised econometric surveys, whether the TSU has been exceeded and to define the most appropriate strategy for the protection of the account holder or for the management of the dispute by the bank.

The correctness of the calculation of interest in current account contracts has been the subject of significant developments in case law, particularly with regard to the compounding of interest (compound interest capitalisation). Although current legislation has introduced new rules for the calculation of interest, there is still scope for disputes in respect of past relationships. The purpose of the verification activity is to establish whether the bank has correctly applied the interest calculation regime for liabilities and assets, whether the compounding clauses were validly agreed and whether the capitalisation was carried out at equal intervals. Once the illegitimacy has been established, the balance is re-determined, with the illegitimate interest being removed in order to calculate the actual debt or credit of the account holder.

The identification of usurious or anatocistic clauses that have not been validly agreed upon has significant legal consequences for the contractual relationship. In the case of usury, the sanction provided for by the Civil Code establishes that the clause is null and void and that no interest is due (the customer must only repay the principal amount). In the case of anatocism, the consequence is the nullity of the clause and the need to recalculate the interest in accordance with the law. The legal and expert activity is aimed at quantifying with precision the undue banking debt accumulated by the customer (company or private individual) during the relationship, providing the necessary support for the start of the extrajudicial or judicial phase for the recovery of the sums or the reduction of the residual debt.

The validity of omnibus guarantees is closely linked to the conformity of the contractual schemes with the rules for the protection of competition (antitrust legislation). Many guarantees drafted in accordance with the uniform models prepared by the ABI may contain clauses considered to be unlawful by case law, such as the ‘reviviscence’ clause or the clause waiving the time limits for revocation. The identification of such defects makes it possible to establish the partial or total nullity of the guarantee provided, allowing the scope of the obligation to be reduced or the guarantor to be completely released, thus protecting his/her assets.

The signature of a guarantee involves the guarantor’s liability for the performance of the guaranteed obligation with all of his assets, present and future. In the case of omnibus guarantees, the commitment extends to all debts, including future ones, of the principal debtor to the bank, up to a predetermined ceiling (maximum amount). The determination of the actual asset risk depends on the validity of specific clauses, such as the waiver of the benefit of prior call, which allows the bank to directly attack the guarantor’s assets without first attempting to recover from the principal debtor. The verification of the clarity and conformity of these constraints is essential to define the limits of the obligation and to prevent the attachment of personal assets.

The enforcement process begins with the sending of a notice of default and a demand for payment, through which the lender formally requests the guarantor to pay the outstanding debt. Once the notice has been received, it is essential to immediately verify the legitimacy of the claim, analysing the validity of the title and the conformity of the contractual clauses (including any antitrust nullity issues). If the bank proceeds by judicial means and obtains an injunction order, the guarantor has a peremptory deadline of 40 days from the notification to file an objection. Timely intervention at this stage is crucial to raise objections relating to the extinction of the guarantee or the expiry of the deadlines, preventing the order from becoming final and triggering enforcement proceedings on the guarantor’s personal assets.

The variable rate of a mortgage is often linked to interbank indices (such as Euribor). The case law has raised questions about the validity of such rates in specific periods, following the ascertained manipulation of the reference index. The analysis focuses on verifying the possible impact of such manipulation on the calculation of the interest paid by the borrower and on ascertaining the transparency and correctness of the initial agreements. Through technical-economic assessments, the potential undue payment is quantified, in order to support the action for the re-determination of the interest due and the recovery of the amounts not legitimately collected.

Variable rate mortgage contracts may include rate-limiting clauses (i.e. floor and cap), designed to protect both the borrower and the lender from extreme market fluctuations. The validity and effectiveness of such clauses are subject to in-depth legal analysis, particularly with regard to their clarity, their actual negotiation and their transparency to the client. The advisory activity focuses on verifying the legitimacy of such agreements and assessing their correct inclusion in the amortisation plan, in the context of litigation or negotiation, ensuring that the conditions applied reflect a fair contractual balance.

The onset of economic or financial difficulties can make it difficult or impossible to repay the loan instalments regularly, exposing the debtor to the risk of enforcement actions. Legal assistance is aimed at finding sustainable solutions (such as substitution or renegotiation with the bank) and at preventing or defending the client from enforcement procedures, managing the dialogue with the lender and evaluating all the options provided for by current legislation for the protection of the real estate assets.

The withdrawal of credit facilities must be carried out in accordance with the principle of good faith and fairness, avoiding conduct that could be considered ‘abrupt termination’. Although contracts often provide for the right to terminate, the interruption of credit cannot be arbitrary or without adequate notice, especially when the stability of the company’s liquidity depends on these lines. The existence of a just cause, such as a serious default, is the prerequisite for immediate termination; in the absence of this, the bank’s action can be challenged as an abuse of rights. Verifying the legitimacy of the withdrawal and the timeliness of communications allows for negotiating sustainable repayment terms or opposing contractual resolutions that unjustifiably prejudice the client’s operations.

The notification to the Central Risk Register (CR) is not an automatic consequence of a simple delay in payments, but requires a comprehensive assessment of the debtor’s solvency. For the entry in the ‘distressed’ category, the institution must establish a state of insolvency or equivalent situations characterised by a serious and non-transitory financial difficulty. The procedure also imposes the obligation of a formal prior notice to the customer, the absence of which makes the notification unlawful. If the entry is disproportionate or does not comply with the procedural requirements, it is possible to take action to obtain the immediate correction or deletion of the data, restoring creditworthiness and protecting the financial reputation necessary for new financing operations.

The assignment of the claim, typical of portfolios of non-performing loans (NPLs), involves the transfer of the position of the original bank to an assignee company. Despite the change in creditor, the legal position of the debtor remains unchanged: he retains the right to raise all the objections that he could have raised against the assigning bank against the new holder, including those relating to contractual defects, usury or compound interest. The management of the new relationship requires the verification of the formal regularity of the assignment, ascertaining that the notification or publication in the Official Gazette has taken place correctly. This phase is crucial for setting up strategies for settlement and write-off or for challenging the legitimacy of the credit claim, ensuring that the change of interlocutor does not prejudice the rights acquired in the original relationship.

Financial market regulations require intermediaries to assess the client’s profile through suitability and appropriateness tests. This duty of care is designed to ensure that each transaction is consistent with the investor’s objectives, technical experience and ability to withstand losses. If the financial instruments recommended are not consistent with the profile established (inadequacy), the intermediary may be held liable for the losses incurred. The assessment focuses on the correspondence between the products purchased and the information obligations fulfilled, allowing the validity of claims for compensation in the event of a lack of transparency or breach of conduct rules to be ascertained.

In the investment services sector, correctness requires intermediaries to manage and make explicit any situations of conflict of interest, always acting to maximise the benefit of the client. A frequent problem concerns the placement of ‘in-house’ financial products or the execution of transactions primarily aimed at generating commissions for the institution rather than returns for the investor (churning practices). If the transaction was concluded without transparent communication of the conflict of interest or in breach of the best execution obligation, it is possible to challenge the intermediary’s actions, requesting the cancellation of the transaction or compensation for the damage resulting from unfair management of the assets.

To establish the liability of a financial intermediary, it is necessary to prove the existence of a breach (such as a breach of duties of diligence or information), the existence of economic damage suffered (loss of capital) and the direct causal link between the institution’s breach and the financial loss. This stage requires a complex probative analysis that often requires specialised Technical Expert Reports (CTP) to reconstruct the investment’s performance and quantify the damage. The activity focuses on the collection of documentary evidence and the preparation of a solid technical-legal dossier, which is essential for managing litigation before the Judicial Authorities or out-of-court dispute resolution bodies (ACF).