Amicable resolution of cases related to foreign currency housing loans is optimal in many respects, assessed in the “Position of the Polish Financial Supervision Authority regarding the directions of resolution of the legal issues presented by the First President of the Supreme Court regarding denominated or indexed mortgage loans to foreign currency.”
In many respects, it is therefore optimal to amicably resolve issues related to currency housing loans. This direction is consistent with the recommendations of the National Bank of Poland, as well as with the assumptions of the macroprudential policy implemented by the Financial Stability Committee and the Ministry of Finance.
The Office points out that, however, the banks’ lack of readiness to offer clients such parameters of a settlement solution, the attractiveness of which would make the settlement a viable alternative to the court procedure, stood in the way of a wide implementation of friendly solutions.
The obvious condition for the success of the settlement option is that its parameters must satisfy both parties. In particular, when looking for a friendly solution, extreme solutions should be excluded, otherwise it is difficult to achieve agreement between the parties as to an amicable settlement. On December 8, 2020, the chairman of the Polish Financial Supervision Authority. He publicly expressed the view that the amicable scenario, which seems to have the greatest chance of success – and is also the broadest possible social consensus – is a solution assuming a kind of equalization of the situation of foreign currency borrowers with people who took out a housing loan in zlotys at the same time.
This solution was indicated as a proposal which – taking into account also the level of expectations of borrowers – had a chance to be considered by customers as a real alternative to the judicial path, while maintaining economic consistency, providing banks with reasonable compensation for the cost of using capital and not leading to harm. other groups of borrowers emphasized the KNF Office.
The conciliatory approach also seems to be favored by the Court of Justice of the EU. The CJEU made it clear in a recent ruling that the consumer, in exchange for receiving an improvement to the terms of the contract, may voluntarily relinquish accusations of unfairness of a contract term in the future. from the point of view of banks, an important element is to ensure the maximum possible level of security and legal stability of the agreements concluded, from which the belief in their compliance with EU and national consumer protection law is crucial.
A possible settlement solution is a solution beneficial from the point of view of the client, who is freed from the consequences of the materialized currency risk, often resulting in a significant reduction in the loan balance, and this occurs without the need to incur significant costs for conducting a court dispute with the bank, without waiting for many years for its resolution, and the related uncertainty about the household budget.
“A conciliatory solution based on the above assumptions has a number of advantages. Firstly, it is a simple solution and to the maximum extent independent of arbitrary criteria, the introduction of which would make it difficult to build a broader consensus and could lead to protracted and inconclusive discussions, as was the case in the past. second, it is consistent with the basic paradigm of financial science, according to which the use of someone else’s capital has its cost – under the proposed solution, this cost corresponds to the cost of a historical, analogous housing loan in zlotys. quantify the cost and risk with regard to the part of the portfolio of foreign currency housing loans that would be subject to the settlement solution, which would reduce the uncertainty burdening the banking sector related to the expectation of the formation of the jurisprudence and legal decisions, as well as allowed to allocate banks’ resources to other, more developmental areas of activity. Fourth, a conciliatory solution based on the above assumptions would implement the principles of social justice, preventing a situation in which liabilities due to foreign currency loans would find themselves – as a result of legal decisions concerning issues that are not, in fact, the source of the problem in a more favorable situation than those who have historically opted for a PLN loan (in particular, not accepting the currency risk). Fifth, it leads to the permanent elimination of currency risk in the credit relationship. Sixthly, it minimizes social costs, on the one hand preventing further antagonization of banks and borrowers, and on the other hand reducing the burden on the judiciary,” calculated the Office.
Full implementation of the proposed amicable solution requires the unanimous will of the parties, and it is not possible to achieve all the benefits associated with the settlement scenario in a situation where at least one of the parties seeks to resolve the matter by way of a court ruling, he added.
Nevertheless, the above presentation of the logic and advantages of a friendly solution may also be important from the point of view of the issues before the Civil Chamber of the Supreme Court. to issues the solution of which remains crucial also in the case of settling cases in court. This may apply in particular to the settlement of the cost of using capital, which should always be resolved in accordance with the basic principles of financial science, and also in the spirit of social justice , which opposes the unjustified privileging of foreign currency borrowers over people who have historically decided to take a zloty loan (e.g. fearing the currency risk), and to avoid it, they accepted a higher interest rate and a higher current loan installment.
According to the PFSA Office, when assessing the matter from today’s perspective, i.e. post factum and being richer in knowledge from subsequent events, it should be concluded that the scale of the depreciation of PLN to CHF exceeded the limits adopted by both clients and banks professionally involved in forecasting the financial market. An extreme scenario regarding possible fluctuations of the CHF / PLN exchange rate has materialized, while few people duly take into account extreme scenarios when making decisions.
This assessment corresponds to the logic of the settlement proposal, which was presented by the chairman of the Polish Financial Supervision Authority on December 8 and 9, 2020. Since the conditions have changed so dramatically, which neither party envisaged (and – at least with regard to the unprofessional party – perhaps not was able to predict), the parties should meet and agree on a different settlement formula.
The position of the KNF Office was formulated in connection with the decision of the Supreme Court in the composition of the entire Civil Chamber of May 11, 2021, pursuant to which the Civil Chamber of the Supreme Court asks the Polish Financial Supervision Authority to present a position on the directions of resolution of legal issues presented by the First President of the Supreme Court in the application of 29 January 2021 (BSA I-4110-4 / 20) for home mortgage loans denominated in or indexed to a foreign currency (hereinafter collectively: foreign currency home loans or foreign currency mortgage loans).
Source UKNF and ISBnews
