European Court on multy-currency loans

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21 Sep 2017 18:19 by mariadecastro Star rating in Algeciras (Cadiz). 9302 posts Send private message

Legal Questions? Speak to Maria Direct

Legal tip 1437. European Court on multi-currency loans 
21 September 2017 
 

New pro-consumer Decission by the Court of Justice of the European Union. Dated 20th of September 2017. It decided on a case of a mortgage loan with a multi-currency clause.

The yesterday passed text affirms that when a financial institution grants a loan denominated in foreign currency, it must provide the borrower with sufficient information so that the borrower can make informed and prudent decisions.

Spain  Supreme Court  is also passing a decission these days on the  abusiveness of such clauses.

In the European Court case, borrowers stated that at the time of signing the contracts the bank presented its product in a misleading manner, highlighting only the benefits that borrowers could obtain without showing their potential risks or the likelihood that they would be materialize. Borrowers asked the clause at issue to be declared abusive.

In this context, the Higher Court of Oradea, Romania asked the European Court about the scope of the obligation for banks to inform their clients of exchange rate risk linked to loans denominated in foreign currency .
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In that regard, the Court observes that the requirement that a contractual term must be drafted in a clear and comprehensible manner also requires that the contract provides a transparent statement of the actual operation of the mechanism to which the clause in question relates. Where appropriate, the contract must also indicate the relationship between that mechanism and that prescribed by other clauses, so that the consumer is in a position to assess, on the basis of precise and intelligible criteria, the economic consequences which result for him.


It is for the national court to ascertain whether all the elements which may affect the scope of its undertaking have been communicated to the consumer, enabling it to assess the total cost of its loan.



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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21 Sep 2017 19:44 by andyfamily Star rating in Hertfordshire. 25 posts Send private message

This sounds very positive Maria. Does this mean that lawyers will take no win no fee cases onboard now ? 

 

 





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21 Sep 2017 20:22 by mariadecastro Star rating in Algeciras (Cadiz). 9302 posts Send private message

Legal Questions? Speak to Maria Direct

Possibly, as our Supreme Court has also already stated that cases where an abusive clause in involved when lost by the Bank, need to be paid by this

 


This message was last edited by mariadecastro on 21/09/2017.

_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



Like 0      

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