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CJEU Attorney General Mr. Paolo Mengozzi states that banks will only have to reimburse clients the money billed in excess from 9th May 2013 onwards

The judgment given by the CJEU’s Attorney General Mr. Paolo Mengozzi states that banks will only have to reimburse clients the money  billed in excess by the abusive ‘clausula suelo’ in their  mortgage contracts from 9th May 2013 onwards, as rendered by the Spanish Supreme Court judgment of the same day.

Mengozzi mentioned that according to the European guidelines on customer protection, Member States have no obligation to establish retrospective invalidity in abusive clauses, and leaves to each country’s legal system the freedom to determine the conditions under which these compensations can be limited. In other words: Customer protection can be limited to ensure the country’s macroeconomic stability.

In the Spanish Supreme Court’s judgement of 9th May 2013, the ruling was in favour of the customers, but the compensation was limited to start from the day the judgement was obtained. Among the reasons given for this were the country’s financial stability, as in July of the previous year, the Spanish Government had requested a financial rescue in order to restructure savings banks.

For those of you who do not remember, mortgage contracts which include ‘cláusula suelo’ establish a minimum interest rate that the client must pay, even if these mortgages were advertised as having variable interest. At first this clauses went unnoticed, but when the European Central Bank lowered Euribor rates to fight the recession, clients with these contracts could not be benefited from these historically low interest rates.

Even though the Attorney General’s opinion is not binding, it is usually a good indication on the route that the final judgement is going to take. The oral hearing was held last 26th April 2016, and the final judgement is expected by the end of the year.

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