The Hungarian financial institutions, members of the OTP Bank Group, sued the Hungarian Government for the Act which fixed an exchange rate to protect those affected by foreign currency mortgages.
Banking asserted that their rights had been infringed. Nevertheless, The European Court of Human Rights in Strasbourg dismissed the claim completely.
JUDGEMENTS
» 30/04/2014 –Judgement of the Court of Justice of the European Union
» 30/06/2014 – Judgement of the Supreme Court of Hungary
» 20/12/2018 – Judgement of the European Court of Human Rights
In 2014, the Court of Justice of the European Union ruled in favor of an affected consumer, Árpád Kásler, who had a foreign currency mortgage. This was confirmed by the Hungarian Supreme Court. In Hungary, these credits were in euros, as a result when the forint (Hungarian currency) depreciated, mortgagors couldn’t afford their fees.
The Judgement of the Supreme Court of Hungary made an important legal impact. The pressure of those affected caused that the Government enacted a law in which an exchange rate was fixed, the forint was equated to the euro. It goes without saying that this resulted in an important loss for financial entities up to 3200 millions of euros.
The Financial institutions, members of the OTP Bank Group, appealed to the Hungarian Constitutional Court against this Act and this Court declared this application inadmissible. Given the situation, these entities appealed again, but this time to the European Court of Human Rights, complaining of a violation of the principle of equality of arms as well as the right to property. Both applications were declared inadmissible again.
In the words of the chair of ASUFIN, Patricia Suárez: “It is a great progress for financial users since it shows that governments can take decisions to protect its citizens when they are affected by inappropriate banking practices. Additionally, she claims that “The European Union Estates should take example and lose their fear of legislating in defense of financial users”.
Download the Judgement of The European Court of Human Rights
