Swiss Franc Loans
WHAT ARE SWISS FRANC LOANS?
Briefly, Swiss Franc loans should be defined as mortgage loans in which the Swiss Franc (CHF) was used by the bank to determine the loan balance (amount of debt) or the amount to be paid out, and then individual installments. There are two basic types of Swiss Franc loans, namely indexed and denominated loans. In no such loan the Swiss Franc was paid to the borrower.
Despite significant differences between the aforesaid types of loans, in both cases the key factor was the use of the PLN and CHF conversion mechanism (one or both ways). Regardless of the type of loan, the global amount of repayment was strongly dependent on Swiss Franc (CHF) exchange rate. It put many borrowers in a difficult position after the sudden increase in the exchange rate of CHF.
WHAT IS THE PROBLEM WITH SWISS FRANC LOANS?
Contrary to popular belief, the legal problem of Swiss Franc loans does not focus on currency exchange rate risk. The currency exchange rate risk is not decisive in court disputes with the bank, although the way of fulfillment of the information obligation on the part of the bank may be important.
So why do Swiss Franc borrowers win?
The key legal problem concerns the provisions determining the principles of currency conversion (indexation clause or valorization clause). As it turned out, banks ensured themselves almost unlimited freedom in determining the exchange rates of individual currencies. As a result, it was the banks who freely decided how much the borrower should repay. The indexation (valorization) clauses were questioned by the courts as the so-called prohibited contract clauses (so-called abusive clauses). This became the starting point for a discussion of all Swiss Franc loans (both indexed and denominated).
WHICH CONTRACTS CONTAIN PROHIBITED CONTRACT CLAUSES?
Below is the list of banks which contracts may contain abovementioned prohibited contract clauses:
- Bank Millenium (e.g. § 2 and § 7)
- BGŻ (e.g. § 37)
- BPH GE Money Bank (e.g. § 1, § 7 and § 10)
- Deutsche Bank (e.g. § 2, § 6 and § 8)
- Eurobank (e.g. § 6 i §7)
- Getin (e.g. § 9 i § 10)
- ING Bank Śląski (e.g. § 1, § 2 i § 5)
- Kredyt Bank e.g. § 2, § 4 i § 9)
- Lucas (e.g. § 4)
- mBank (e.g. § 7 and § 11)
- Multibank (e.g. § 7 and § 11)
- Nordea (np. § 1)
- PKO BP (e.g. § 1, § 13 and § 22)
- Polbank (e.g. § 7 i § 9)
- Raiffeisen (e.g. § 2 i § 10)
- Santander Consumer (e.g. § 2 i § 3)
- Fortis Bank (e.g. § 2 point 20, § 4 paragraph 5 of the Regulations)
- DNB Nord (e.g. point 3.2 of Annex 6)
Swiss Franc borrower often take legal action against the above-mentioned banks. It should be noted that in the period of granting Swiss Franc loans, banks changed their contract templates; the above-mentioned contract clauses are exemplary and may vary depending on the date of concluding the contract. One should also remember that prohibited indexation (valorization) clauses may be found in loans granted by other banks. In order to determine this, analysis of a particular Swiss Franc loan agreement is necessary.
WHAT IS THE IMPACT OF USING PROHIBITED CONTRACT CLAUSES?
Common courts have agreed that banks used prohibited contract clauses, however, a fundamental problem arises – how does this affect a particular contract? There are two basic types of decisions favorable to Swiss Franc borrower, i.e.:
- declaring the loan agreement invalid (the agreement is considered invalid from the very beginning);
- declaring that, despite the non-binding of the prohibited contract clauses, the contract should continue to be performed as a PLN loan (so-called “conversion” of Swiss Franc loan).
Our Law Firm conducts cases concerning the securing the borrower’s interest in consideration to the previous judgments.
HOW TO FIGHT FOR YOUR RIGHTS?
The primary method of claiming your rights should be mediation or other out-of-court settlement of the dispute with the bank. Many institutions (including non-governmental institutions) offer help in this regard. Unfortunately, the practice of banks shows that they rarely settle with Swiss Franc borrowers.
What then?
Then it becomes necessary to initiate legal proceedings. Depending on the individual situation of each Swiss Franc borrower, it may be justified to file a case against the bank. One should remember that the situation of each Swiss Franc borrower is different and requires an individualized approach. Particular attention should be paid to such issues as annexes signed to the contract, the number of borrowers (spouses, cohabitants), early loan repayment (out of schedule) or repayment in Swiss Francs (CHF).
DOCUMENTS NECESSARY FOR THE CASE ANALYSIS
If you are interested in legal services from our Law Firm, it is necessary to provide the loan agreement with all attachments and signed annexes. These documents should be sent in electronic version to the following e-mail address: kancelaria@ccka.pl.
After a preliminary analysis of the occurrence of provisions considered as prohibited in the contract, a representative of the Law Firm arranges a meeting, during which the details will be presented, including chances and financial risks associated with potential litigation.
You can find other publications on Swiss Franc loans on our website in the News section: https://ccka.pl/kategoria/sprawy-frankowe
Address
Czupajło & Ciskowski Kancelaria Adwokacka Sp.p.
Śniadeckich 17
00-654 Warsaw
NIP: 5272819774 | KRS: 0000693729
