The Competition Authority has taken a decision on the Agreement between financial institutions regarding the amendment of terms of mortgage loans for debt settlement.

The Competition Authority received a request for an exemption from the prohibition on consultation in Article 10 of the Competition Act. No. 44/2005 from the Association of Financial Institutions, the Ministry of Social Affairs and the Housing Finance Fund on 25 November last. On 27 November, another request was received from the National Association of Pension Funds, requesting a similar exemption for the association's member organisations.

The reason for this request for an exemption from the consultation ban is a law that was passed by the Althingi on 19 November 2008. No. 133/2008 on the amendment of the law No. 63/1985, on the settlement of individual mortgage loans, as amended. The Act was enacted to assist those who might face payment difficulties due to the current circumstances in the Icelandic economy. The law provided that customers of all authorised lending institutions with index-linked mortgages could request an equalisation of their loan payments if they deemed it appropriate.

The Competition Authority considered that the conditions for granting an exemption from the prohibition on collusion under the Competition Act had been met. The matter was concluded by decisions. No. 58/2008 and No. 59/2008.