High Court Lawyer
Expert Bank Law
Problems of Banking Compound Interest? Are you looking for a lawyer in Rome experienced in this field? Compound interest in the banking language is the production of interests (capitalization) from other interests rendered productive even if expired or unpaid, on a given capital. It is a common practice, which often leads to an illegal interest calculation and tends to make a loan or mortgage extremely expensive. The prohibition of anatocism (banking and non) has always existed in the Italian legal system under art. 1283 of the Civil Code. Nonetheless, the banks acted legitimately when they applied the methodology for calculating the interests described above, because such behaviour had been largely endorsed by the case-law, at least until the time when the whole process of Interpretative revision of the Norms concerning the anatocism, which led after many years to the famous ruling of the Court of Cassation of November 4, 2004, N. 21095. Before this ruling, there was still art. 25 of Legislative Decree N. 342/1999, paragraph 2, which, by introducing a new subparagraph to art. 120 of D. Lgs. n. 385/1993 (Single bank text), provided for the possibility of establishing, through a special resolution of the ICRC (Inter-ministerial Committee for Credit and Savings), the modalities and criteria for the production of interest on interest accruing in the financial year ff the banking activity, provided that the same periodicity is respected in the counting of both the passive and the active balances. The official seal on the aforementioned new course on the calculation of bank interest was then affixed by the judgment of the ICRC issued on 9 February 2000, which definitively fixed the time of the date of the obligation, to be borne by the banks, to recognise To the depositionists equal periodicity in the liquidation of interest. In Decree no. 342/1999 at the same time, with a transitional provision, the legislator established a real rectification for the past, without prejudice to the quarterly capitalization clauses contained in the contracts concluded before the entry into force of the new regulations. However, the transitional rule was declared unlawful for breach of article 77 of the Constitution by the Constitutional Court by judgment of 17 October 2000 n. 425. The revision process at the moment can be considered concluded with the aforementioned Judgment of 4 November 2004 N. 21095, of the United sections of the Court of Cassation, in which it is essentially affirmed the unlawful, even for the past, of bank charges for compound interest. In essence, the Court affirms that the quarterly capitalization clauses of debtor interests prior to 1999 have never been responsive to a regulatory use but rather a negotiation and therefore in contrast with the principle contained in art. 1283. The normative use consists, in fact, as reported in the sentence, in the “general, uniform, constant and public repetition of a certain behavior, accompanied by the conviction that it is a juridically obligatory behavior, as it conforms to a norm that already exists or that is believes it should be part of the legal system “. In other words, the compound interest clauses were accepted not because the users were convinced of their compliance with the principles of the legal system, but rather because they were obliged to accept them in order to access the banking services. This psychological attitude is therefore very far from the spontaneous acceptance that instead distinguishes the custom as a juridical institution. Del Monte law firm in Rome deals extensively and professionally with the problems of bank compound interest, erroneous calculation of interest on loans, financing and mortgages. For the needs of banking anatocism, problems with banks and financial, entrusted to the studio lawyer Roma Federica Del Monte
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