February 12, 2014 / 10:01 AM / 4 years ago

EU court says Hungary can assess fairness of fx loan terms

BUDAPEST, Feb 12 (Reuters) - The European Court of Justice issued a legal opinion on Wednesday which could clear the way for Hungarian courts to rule on whether some aspects of the foreign currency loans that banks issued were in breach of the law.

Hungary’s government says it wants to implement a relief scheme for holders of foreign currency mortgages, and the banks except they will have to foot the bill. The government is waiting for legal issues to be ironed out before adopting legislation.

Hungary’s supreme court has already ruled on the main issue, finding that lenders were not to blame when borrowers lost out because the exchange rate changed, a partial reprieve for the banks.

The European court was asked to rule on a secondary issue, which relates to whether a bank treated a customer unfairly by issuing a mortgage at one exchange rate, and setting a different one for the repayments.

The Court of Justice’s opinion, which is not binding until the judges themselves have ruled, stated that, under European laws, Hungary’s national courts can intervene where contract terms are deemed to be unfair.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below