CJEU Aide's Opinion In FX-Loan Case Favours Consumers, Final Verdict Expected Later This Year

The risks to the Polish banking sector have increased after a legal aide to the Court of Justice of the European Union (CJEU) said in a non-binding opinion that "after the annulment of a mortgage loan agreement due to unfair terms, consumers may assert claims against banks that go beyond reimbursement of monetary consideration; banks may not."

• The opinion does not constitute a ruling in the case brought by Polish consumers but is taken into consideration by justices during their deliberations. Opinions of the CJEU legal advisors often serve as bellwethers of later verdicts issued by the Court.
• The case represents another phase of a prolonged conflict between Polish banks and consumers who took out mortgage loans denominated in Swiss francs, with most loans granted in 2005-2009.
• Domestic courts have mostly ruled in favour of consumers, cancelling FX loan contracts in more than 90% of cases after finding abusive clauses that put borrowers at a disadvantage.
• The FX-loan saga has created a serious headwind to the local banking sector. According to a prior estimate of Poland's financial watchdog, should the CJEU follow through on the opinion of its Advocate General, the sector could suffer losses of about PLN100bn.
• The opinion issued today unequivocally favours consumers. The Advocate General advised the CJEU to allow them to pursue "claims going beyond reimbursement of the instalments paid under the invalid mortgage loan agreement and default interest at the statutory rate from the date of the request for reimbursement," while limiting lenders' ability to pursue additional claims.
• According to several Polish media outlets, the CJEU could issue its final ruling in the FX-loan case around the middle of the year. The verdict will shape the relations between parties to loan agreements going forward.