The CJEU considers it "abusive" not to inform the 'multi-currency' of the exchange risk of its mortgage
While awaiting the opinion of the Spanish Supreme Court on multi-currency mortgages, expected this week, the European Court of Justice has ruled against the lack of information offered to bank customers in the contracting of these products.
The Court of Justice of the European Union (CJEU) has ruled on Monday that banks must provide the client with ” enough information so that the latter can make sound and prudent decisions ” in the contracting of a loan in foreign currency. And between this information, the effects that a fluctuation of that currency can have on the return of the installments.
He has ruled that these clauses should be drafted “in a clear and understandable manner” The case that the Luxembourg Court resolves today is based on the loans signed between 2007 and 2008 by several Romanian citizens, who became indebted in Swiss francs with an entity from their country . At that time Swiss interest rates were low, when they began to rise, the currency was revalued and, consequently, the loan installments.
It is the same problem that affects 70,000 Spaniards, according to Asufin. The contracting of multi-currency mortgages – included in other currencies, especially Swiss francs and yen – skyrocketed in the years before the economic crisis because during the bubble, when interest rates in the eurozone were high, borrowing in other currencies was beneficial. The crisis of the euro and the rise of rates in Switzerland and Japan reversed this situation.
“We know of cases of people who asked for a mortgage of 450,000 euros to buy a villa, they promised to return the dues in yen … and when this coin was shot, the loan was raised to 780,000 euros”, they count 20 minutes from the cited association of banking users, which calculates that the average loss for Spanish mortgages amounts to about 200,000 euros.
Banks must report the risk of an appreciation of the foreign currency
The protest of those affected in Spain is the same as that made by Paula Andriciuc and other Romanian citizens in the case that today the CJEU resolves. They consider that the bank only informed them of the benefits of returning the quotas in Swiss francs, but not of the damages of the revaluation of that currency or of the probability of its occurrence. It would be, therefore, a “non-binding abusive clause” and a “deceptive” product.
That is what the European Justice has ruled this Wednesday. The court ruled that these clauses should be drafted “in a clear and understandable manner” and that they should be “transparent” about the operation of the mechanism so that the consumer assesses the economic consequences of signing the contract.
The Court We fully trust that the Supreme Court will protect all affected Spanish Luxembourg, in its ruling, urges banks to provide “sufficient information” so that the client knows the risk to which is exposed when signing this type of loan. For example, inform about the possible variations of the exchange rates , as well as the effects that would entail in the loan installments .
The European court does not enter to decide if in the case of the Romanian citizens this “information imbalance between the parties to the contract” occurred, but it does urge the judge of that country who raised the query to assess whether the requirement of “sufficient information” or if, otherwise, it was an “abusive clause” and a breach of “requirement of good faith” by the entity.
“We fully trust that the Supreme Court will also protect all the Spanish victims who have been demanding justice for years,” the president of Asufin, Patricia Suárez, congratulated herself this morning, after hearing the ruling of the European Justice that she describes as “magnificent and providential” .