Protection of borrowers who have concluded contracts with Greek banks for mortgages in Swiss francs
|12 September 2014||
|Question for written answer
to the Commission
Notis Marias (ECR)
In Greece thousands of borrowers are in a difficult financial situation due to the mortgage contracts linked to the exchange rate between the euro and the Swiss franc they have concluded with Greek banks. This is because these banks, abusing their dominant market position and acting in breach of existing provisions for the protection of consumers (Directive 93/13/EEC on unfair terms in consumer contracts, etc.), failed to provide borrowers with a minimum of information prior to the conclusion of the contracts about the risks involved and the possibility and the cost of techniques to cover the exchange risk.
This means that these borrowers are now in an impossible position as regards the cost of repaying their loans following a significant change in the euro/Swiss franc exchange rate: they were unaware that the cost of conversion would be added to each monthly instalment and that, while they paid in euros, the banks converted that amount into Swiss francs.
In view of the above, will the Commission say:
Is it aware of this abuse of a dominant position by the Greek banks and their unfair practices which have resulted in a doubling of monthly repayments on these loans? If so, how does it intend to ensure the protection of these borrowers as consumers and ensure compliance with existing EU legislation?
Source: European Parliament
Answer given by Ms Jourova on behalf of the Commission
The Commission is aware of the problems related to foreign currency mortgage loans in several Member States.
As regards existing EU consumer protection law, under Directive 2005/29/EC(1), providers of credit are required to provide consumers with adequate and clear information on key elements such as the characteristics and the price of a mortgage loan, including the exchange rate. Furthermore according to Directive 93/13/EEC(2), a contract term causing a significant imbalance between the parties to the detriment of the consumer shall be regarded as unfair and as such shall not be binding.
It is the primary responsibility of Member States to enforce this legislation.
Recognising that mortgages are long-term loans of particular importance for consumers, the co-legislators have agreed specific legislation dealing with mortgages. Directive 2014/17/EC(3) will apply to mortgage loans to consumers as of 21 March 2016. This directive, which needs to be transposed in national law, contains pre-contractual information requirements that should ensure that consumers are well aware of the features of the loan they are offered before concluding the contract. According to these rules, the consumer shall receive detailed information as regards the currency of the loan, the interest rate and costs applicable, as well as the possible impact of a variation in the exchange rate and/or the interest rate.
As regards the claim of an alleged abuse of dominant position by certain Greek banks, the Commission is not aware of any elements that would appear to indicate the existence of an anticompetitive agreement, or the existence of a dominant position. The Hellenic competition authority(4) is well placed to possibly further investigate this issue following a complaint being lodged with the latter.
Source: European Parliament