Hungarian Central Bank Responds to European Court Ruling on Currency Loans
The Hungarian National Bank acknowledges the European Court of Justice's decision affecting foreign currency borrowers.
The Hungarian National Bank (MNB) has stated its commitment to respecting domestic and international court rulings and has opted not to comment further on them following inquiries regarding the recent decision made by the European Court of Justice (EUB).
On October 19, 2023, the EUB delivered a significant ruling regarding a leasing agreement denominated in Swiss francs, which is considered the most favorable judgment for foreign currency borrowers to date.
The ruling came in response to a preliminary ruling request from Hungary's Supreme Court, which had suspended local proceedings in relation to the case.
The Supreme Court sought clarification on whether it should reconsider Hungarian judicial practices concerning consumer credit agreements that previously adjusted contracts to exclude unfair terms.
The EUB's verdict unequivocally stated that borrowers are only liable for the amount they received, while the financial institution must bear the costs associated with currency exchange rate fluctuations.
In light of this ruling, the MNB indicated that the Supreme Court would issue a decision taking the EUB's ruling into account.
Domestic courts are expected to adapt their judicial practices in accordance with the upcoming decisions following the Supreme Court's interpretation of the EUB's findings.
The implications of this ruling may lead to a wave of mass litigation and necessitate a review of compensation options for borrowers, as the EUB's determination requires reevaluation of existing judicial practices in Hungary.
On October 19, 2023, the EUB delivered a significant ruling regarding a leasing agreement denominated in Swiss francs, which is considered the most favorable judgment for foreign currency borrowers to date.
The ruling came in response to a preliminary ruling request from Hungary's Supreme Court, which had suspended local proceedings in relation to the case.
The Supreme Court sought clarification on whether it should reconsider Hungarian judicial practices concerning consumer credit agreements that previously adjusted contracts to exclude unfair terms.
The EUB's verdict unequivocally stated that borrowers are only liable for the amount they received, while the financial institution must bear the costs associated with currency exchange rate fluctuations.
In light of this ruling, the MNB indicated that the Supreme Court would issue a decision taking the EUB's ruling into account.
Domestic courts are expected to adapt their judicial practices in accordance with the upcoming decisions following the Supreme Court's interpretation of the EUB's findings.
The implications of this ruling may lead to a wave of mass litigation and necessitate a review of compensation options for borrowers, as the EUB's determination requires reevaluation of existing judicial practices in Hungary.
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