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2022 | OriginalPaper | Chapter

5. The Fight Against Usury

Author : Cristina Rovera

Published in: Ethics in Banking

Publisher: Springer Nature Switzerland

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Abstract

Usury is a problem as old as the history of mankind. Remember the judgment to which the first bankers were subjected, as discussed at length in Chap. 2. In Europe different countries have a ceiling rate above which the loan is defined as a usurer. But there are no common rules. Currently, there is a EU proposal for a Consumer Credit Directive, which would liberalize the credit market, placing no limit both on the amount of loans and on the applicable interest rates. The Directive introduces the principle of home country control. It authorizes UK-based finance companies—where usury laws are less restrictive—to lend money across the continent. On the contrary, national controls on anti-usury rates (like in Italy, France, Germany and the Netherlands) would become non-compliant with Community legislation.

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previous chapter The Fight Against Money Laundering and Tax Evasion
next chapter Islamic Finance and Microcredit
Footnotes
1
The best known.
 
2
Since June 2022 we can register a new trend: an increase of interest rates decided by C. Lagarde. This is the new monetary policy—uncertain in duration—to fight the inflation.
 
3
Banca d’Italia (July 2016), Instructions for calculating the average overall effective rates, Section I
 
4
The calculation method was changed on 14 May 2011. Previously, the usurious rate was determined by increasing the AOER by 50%.
 
5
A modification proposal is currently under consideration (March 2022): to offer the loan also to private citizens, who are victims of usury but not entrepreneurs.
 
6
This amount is not easy to determine. It is possible to start from the value of the interest paid, but the psychological damage inflicted on the victim remains to be estimated. Interesting investigations into this subject (Boido et al. 2012) show that the victim of usury is often threatened, not only personally, but also in relation to their loved ones.
 
7
According to article 2 of EC Recommendation 2003-361:
  • Medium-sized enterprises are those which employ fewer than 250 employees and have either a maximum annual turnover of 50 million euros or a maximum annual balance sheet total of 43 million euros.
  • Small enterprises are those which employ fewer than 50 employees and have either a maximum annual turnover of ten million euros or a maximum annual balance sheet total of ten million euros.
In addition to the above categories, there are micro enterprises, which employ fewer than 10 people and have either a maximum annual turnover of two million euros or a maximum balance sheet total of two million euros.
 
8
A detailed treatment of over-indebtedness and usury is available in the Boido, Rovera and Zuffrani monograph collection (2012). Details on the prevention fund can be found in the monograph by Rovera, that realizes both annual report analyses and interviews (using a questionnaire) of the beneficiaries.
 
9
Here the information is proposed in a simplified form.
 
10
The report must therefore be submitted for as long as there are guarantees backed by public contributions or as long as these are invested and accrue income.
 
11
The causes on which the delinquency rate of guarantee institutions depends are simplified here. For a detailed description, see Rovera (V.v. A.a. 2021).
 
Literature
Artusio, R., Bolognese, D., Bongiovanni, A., Vescina, S. (2017, 2018). I confidi in Italia, CCIAA Editor
Artusio, R., Bolognese, D., Nirino, N., Vescina, S. (2019). I confidi in Italia, CCIAA Editor
Banca d’Italia (2016), Istruzioni per la rilevazione dei tassi effettivi globali medi ai fini della legge sull’usura
Boido, A., Rovera, C., Zuffranieri, M. (2012). Il sovraindebitamento e l’usura. Note giuridiche, profili economici e aspetti psicologici, Celid. In particolare Rovera (2012). Il contributo pubblico alla lotta contro l’usura. I sussidi ministeriali e regionali agli enti di garanzia
Bolognese, D., D’Auria, C., Vescina, S. (2020). I confidi in Italia, CCIAA Editor
Bongiovanni, A., Bolognese, D., Franchino, M., Quaglia, R. (2016). I confidi in Italia, CCIAA Editor
De Vincentiis, P., Damilano, M., Isaia, E., Pezzetto, G., Pia, P., Rovera, C. (2008). The guarantee systems and the SMEs access to credit, EdiBank
De Vincentiis, P., Damilano, M., Isaia, E., Nicolai, M., Pia, P., Rovera, C. (2010). Il Sistema dei Confidi in Italia, Bancaria Editor
De Vincentiis, P., Damilano, M., Isaia, E., Nicolai, M., Pia, P., Rovera, C. (2012). I Confidi di nuova generazione, Bancaria Editor
De Vincentiis, P., Damilano, M., Isaia, E., Nicolai, M., Pia, P., Rovera, C. (2013). Il sistema dei Confidi in Italia. Efficienza, sostenibilità e intervento pubblico, Maggioli Editor
De Vincentiis, P., Damilano, M., Isaia, E., Nicolai, M., Pia, P., Rovera, C., Bolognese, D., Quaglia, R., Bortoli, M. (2015). I confidi in Italia, CCIAA Editor
Gai, L. (2013), “Garanzie in bonis e garanzie in default: quali evidenze dal sistema Confidi” in Finanza, Marketing e Produzione, EGEA, pp. 111–142
V.v. A.a. (2021), Insights into Economics and Management, in particular chapter 6 by Rovera: The reality of confidi: delinquency rate and political decisions, Book Publisher International
Metadata
Title
The Fight Against Usury
Author
Cristina Rovera
Copyright Year
2022
Book
Ethics in Banking

Print ISBN: 978-3-031-22147-7

Electronic ISBN: 978-3-031-22148-4

Copyright Year: 2022

DOI
https://doi.org/10.1007/978-3-031-22148-4_5

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