Banking, consumers and the European Court

A few weeks ago, the banking sector has been in the news for claims for mortgage loan origination fees.

The European Court has responded to the questions raised by the Barcelona Court of Appeal in the sense of specifying the time limit applicable to the claim for mortgage expenses. Until now there have been judgments with disparate pronouncements, some of them applied the statute of limitations, or loss of the possibility of claiming, because they considered that there was a period of 10 years from when the bills had been paid, and others upheld the claims on the understanding that the period for claiming had to be calculated from the date on which the 2019 judgment recognising the effusiveness of these clauses was handed down.

The judgment indicates that in order to assess the possibilities of claiming mortgage expenses, the principle of effectiveness applies, which translates into the possibility of the consumer being aware, not only of the abusive nature of the clause, but also of the rights conferred by the European Directive and having sufficient time to claim the rights to which they are entitled. At the same time, he stresses that the system of protection established by the European Directive is based on the idea that the consumer is in a situation of inferiority with respect to the banking professional, both in terms of information and knowledge and in terms of capacity to negotiate, and therefore keeps open the possibility of claiming the costs.

We will have to see how the Courts of First Instance and the High Courts will apply this ruling, but it is good news for the consumers affected.

In this sense, it is also interesting to note a recent pronouncement of the European Court of Justice which has considered that the contracting of loans without assessing the solvency of the consumer contravenes the content of European Directive 2008/48, this would affect all those quick loans, which are granted without assessing the debtor's possibilities of repaying them. European legislation aims to protect consumers against the risk of over-indebtedness and insolvency, so that the analysis of the debtor's economic capacity is an obligation for the lender and non-compliance is punishable. Bearing in mind that sanctions must be effective, proportionate and dissuasive, the European Court has understood that in these cases, it is perhaps in accordance with the law to sanction these conducts with the loss of the interest on the loan and, consequently, the lender's obligation to return it to the consumer. However, it will be up to the courts in each Member State to determine the scope of this sanction and, therefore, we will also have to see how the courts here will apply it.