The Bank of Italy takes the assignment of the Fifth by hand, and accompanies consumers towards greater transparency, launching new supervisory guidelines to protect customers.

The Bank of Italy takes the assignment of the Fifth by hand, and accompanies consumers towards greater transparency, launching new supervisory guidelines to protect customers.

 

“Cessione del Quinto” means the provision of loans to employees or pensioners , and consists in the repayment of installments (no more than one fifth of salary / pension) directly in payroll.

But how did the Bank of Italy intervene? What changes for credit intermediaries.? And what are the goals ? Let’s see in detail what it is.

 

How are the new supervisory guidelines born and what do they foresee?

How are the new supervisory guidelines born and what do they foresee?

The new supervisory guidelines arise from the various critical issues that exist in the financing system for Cession del Fifth, to be resolved with a limitation to the easy disbursement of loans and the reduction of costs .

What do they foresee?

  • solutions consistent with the customer’s financial profile
  • production of information easily understood by the consumer
  • responsibility on the part of operators , compliance with transparency requirements
  • remuneration policies and incentives for the network , proportionate to the content and quality of the activity
  • in the case of renewal , compensation based on the difference between the amount of the new loan and that of the residual that is to be paid off.

 

The 9 sections of the document

The 9 sections of the document

The document has 9 sections which indicate the major critical issues encountered up to now and which therefore must be addressed and resolved, but the main legal references and application guidelines are also shown.

The 9 sections of the document are divided into:

  • credit rating and risk of over – indebtedness
  • pre-financing and other conduct prior to granting the loan
  • the costs of the assignment of the fifth : level, structure and their representation in the pre contractual and contractual documentation
  • insurance policies
  • duties of distributors and transparency of the cost of the network
  • responsibility of banks and financial intermediaries
  • remuneration
  • communications to customers
  • transfer of relationships

Within these sections, some good practices are specified to be followed, namely the virtuous conduct to increase the quality of customer relations, such as for example

  1. indication of the amounts to be repaid in case of early repayment
  2. indication both in aggregate and in detail, of the total charges that will not be returned in case of early repayment

Good practices are highlighted in the document through colored squares … impossible not to notice them!

 

What are the goals?

The guidelines have 4 main objectives, aimed at protecting the bank’s customers with a higher quality of relationships and a lower risk of litigation between the parties. Not only that, the commitment is to prevent improper conduct and promote the adoption of correct behavior towards customers.

We said, the objectives are four, clear and precise:

  • Greater clarity and comprehensibility of costs
  • Less exposure to customer over-indebtedness
  • High efficiency of intermediaries
  • Low risk of litigation

A very important result that highlights the desire to ensure maximum transparency and efficiency towards the consumer.

 

What changes for credit intermediaries

What changes for credit intermediaries

It goes without saying that new responsibilities come to the credit intermediaries. They will therefore have to manage the entire production process and ensure compliance with the forecasts of network correctness, transparency and potential damage to customers.

 

Why is the sale of the fifth still a winning choice?

Why is the sale of the fifth still a winning choice?

There are still many advantages for which the Cessione del Quinto remains a winning choice for those seeking a loan, as it is not only a fast and convenient loan , but the reimbursement takes place in a safe and stress-free manner. You do not have to remember to pay the installment because it is deducted directly from the paycheck or from the pension , in a percentage not exceeding 20%. Not only. It can also be requested in special cases such as:

  • salary or pension foreclosure
  • if you are a bad payer
  • in the event of a check or draft protest