Bums and variable interest rates


Bersani has done a tiny wee bit of liberalisation. For the moment without touching strong powers. The banks have only been touched by pinpricks like the contextual adjustment, following monetary policy decisions about interest rates for borrowing and lending by a client.
This is a request that seems obvious. If the cost of money increases, it increases for the client as well as for the bank. And the bank cannot make pots of money from it. In fact, the banks should have aligned their rates without waiting for the State to impose that.
The new president of the Associazione Bancaria Italiana {ABI - Italian Banking Association} doesn’t accept this and has given an interview to il Corriere that needs interpreting.

Interview: the new president of ABI, Corrado Faissola
Date: Saturday 5 August 2006
Newspaper: Il Corriere della Sera

“It was not felt that this measure was necessary.”
should be read:
”It’s legitimate to cream off money from people.”

“It has not created advantages for competitors. In fact it creates further reasons for conflict between banks and clients.”
should be read:
”Now the clients can get angry with the banks if they rip them off and this is justified by the law.”

"Individual banks will decide how to apply the new regulations. I want to say that it isn’t an obligatory law but a guiding law. It is subject to many interpretations, as happens for all laws.”
should be read:
”We will interpret the law, that is the guidance, and then we will do a bit of what pleases us.”

Faissola also talked about the increase in the interest rates of the European Central Bank and about the increase in mortgage costs.
The journalist asked him if the banks were responsible for having suggested the variable interest rates and increasing the risks for the clients if there is an increase in interest rates, he replied:
“The increase in costs of the mortgages will be automatic considering that the repayments refer to the market interest rates”
should be read:
”We’ll take no prisoners”
”It seems strange that anyone who has taken out a mortgage at 2% should think that interest rates would fall further and not – as is happening - that they would rise… The client asked for it (the variable interest rate). It was too tempting.”
should be read:
”We think of the interests of the bank, not of the client’s interest.”

The increases in mortgage repayments will be too much for many families. What will happen to their houses? Who will gain from this situation?
Italians with variable interest rates on your mortgages, tell us your stories. I’ll collect them to send them to the ABI.

Posted by Beppe Grillo at 11:29 AM in | Comments (6)
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In Bendigo,Australia,the comunity got fed up with the bank system,and started their own community bank,now they have branches around Australia,this is a pioner spirit,but when is enough is enough and it can be done,you just need it likeminded peoples,and same goals,ciao

Posted by: evakulnuraee | August 9, 2006 10:43 AM

Hi Maria,

I experienced a similar situation (1996).

I had a bank account with the Banca Toscana ( an aged one ) which I decided to close from Hong Kong ( where at that time I was living).

I sent the insruction via fax.

At the end of ´99 I received an Account balance: they charged me the administration costs for ´98 and ´99.

Well to make this story short, because it became a pain in the ass, it was over only once I met personally the director with a copy of the fax in my hand! ( 2000 ).

Good luck.

Posted by: gabriele | August 8, 2006 09:02 AM

Yes Maria

There are laws - European laws. When you spoke with the person in the bank what she did was give you advice as a representative of that bank. Any advice given verbally is legally binding. However the advice must be 1. accurate 2. complete and covering all details concerning the request and 3. understandable.

On all 3 points the banks representative has negleted to fulfil their duty under the law. In fact you were misled by that person which also comes under the penal code in Italy.

You must immediately send a "raccomandata" to the bank stating that you will not pay those fees and charges outling the reasons why (see above.

If you want you can also ask the police to have both the bank (as the primary responsible)and the person who gave you the advice charged under those laws. If I was you I would seek help from a Consumer Protection organisation. But don't pay bank!

Posted by: Robert Tuppini | August 7, 2006 08:01 PM

I wonder what should i do ?
Nearly three years ago i decided to go back to Ireland and wanted to close my account with the BANCA COMMERCIALE SEDE in PALERMO.
I therefore got in touch with MRS Iolanda Billeci, who had helped me in opening it a few months before.
She replied that it wasn't worth it.
During the three years that went by , i have been charged eur 30 every three months for the keeping of the account and sending of the statments at my parents address. I asked my parents to go to the bank and close the account but the bank said it couldnt be done.
I do not want to pay the interests and do not know if to argue with the bank .
Ive been back since last week and havent opened my ' mail' yet!
I aint afraid of facing the above named bank officer, but is there any scrap of law that i could quote for avoiding paying some fees i feel i shouldnt?
Ta 4 replying

Posted by: Maria Consuelo Spera | August 7, 2006 07:36 PM

Stupid question: What would happen if the Italians will choose to put their money into non italian banks like Deutsche Bank or ABN Amro?

Posted by: Giovanni Principe | August 7, 2006 06:06 PM

I think the alternative here is to put the money into the mattress,like the old day,and live in a tend,it is far better sycure,than put money in the bank,or in a mortagage,that maybe my great great granchildrens can finish to pay,in 100 years time,if the interest rate hasen't raise up meanwhile.ciao

Posted by: evakulnurae | August 7, 2006 11:56 AM

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