Representatives: Patricia Suárez · @WonderWomanPSR
FX LOANS IN SPAIN – FACTS
When and why would people in Spain take FX loans rather than loans in euros?
First of all, most people in Spain buy a house/flat. In general, renting is seen as less favourable as rent could be used to buy property. In 2006 to 2008 real estate bubble was created in Spain: Euribor was very high, properties rose rapidly in price and banks found it difficult to market mortgages in euros… so they started to offer FX loans.
The appeal was lower interest rates as interest rates on JPY or CHF were lower. Banks presented comparisons (see below) of the monthly fee in euros and in other currencies, showing a favourable difference for the FX loans. People generally thought the monthly fee could vary, but it was never clarified that the principal could rise as well.
Who was the target?
Mostly private individuals and household. At first, FX loans were aimed at pilots, flight attendants and airport workers (2005-2008), who might have had some income in other currency, later to policemen, soldiers and civil guards (2006-2008) and then to practically eveyone.
Which banks offer or have been offering FX loans?
According to Asuapedefin studies, based in more than 1.000 answers.
Were people informed about the risk when they took these loans?
No. Banks generally only pointed out the benefits (low interest rates, low monthly fee, possible conversion to euros if needed, etc..) but left out emphasising that the whole debt was FX indexed. In addition, they kept quiet about the principal increasing in case the debt was converted to euros. Asuapedefin has collected brochures, factsheets, etc given to clients, in order to show how the banks presented the loans to their clients.
In which currencies are the loans mostly indexed?
At the beginning in CHF and JPY. However, after the euro started devaluating in 2009, some people change from JPY to CHF and even to GBP.
What happened when consumers took banks to court for the FX loans?
All judgements are in Asufin website. To begin with the first instance judgements were 50%/50% for/against the consumers. However, following the ECJ – Hungarian judgement of 30 April 2014 Spanish courts have taken notice of it and the outcome been in favour of FX borrowers.