Agreement between financial institutions on the amendment of mortgage terms for payment arrangements

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

The reason for this request for an exemption from the prohibition on consultation is a law passed by the Althingi on 19 November 2008, No. 133/2008, amending Act No. 63/1985, on the equalisation of payments on individual mortgage loans, as amended. The law was enacted to assist those who might face payment difficulties due to the current circumstances in the Icelandic economy. The law meant 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.