Constitutional Court rejects request to annul some parts of retail loan contracts law

Budapest, January 29 (MTI) – Hungary’s Constitutional Court on Thursday rejected a request to annul some parts of legislation on retail loan contracts.

The Metropolitan Appeals Court had submitted the request in connection with court cases involving K&H, KDB Bank, Porsche Bank and evoBank.

The request was made based on the argument that the legislation violated the principles of the division of power and legal security.

The Constitutional Court said it had already addressed a number of the points made in the request in an earlier ruling. It added that legal security requires certain standards of clarity and the predictable operation of legal institutions.

The legislation laid the groundwork for requiring lenders to compensate retail borrowers for making unilateral changes to contracts and for using exchange rate margins when calculating repayments for foreign currency-denominated loans.

In a ruling last November, the Constitutional Court said prohibiting unilateral changes to loan contracts did not go against the fundamental law.

By naming the state as a defendant in the trial, the legislator did not prefer it as a party to the trial, only introduces special procedures in defence of consumer interest, the Constitutional Court said in its latest ruling.

According to its justification, the state did not abuse its power and did not create a situation in which the other party to the trial was at a disadvantage.

Commenting on the ruling, the governing Fidesz party said that the banks’ tactics to play for time had failed and Hungarian families had won. Time has proven that the Hungarian parliament made the right decision when, resisting attacks by the banks and the left wing, it enacted laws that prepared the ground for banks’ accountability and forex loan conversion, party group leader Antal Rogan said. Due to these laws, 1.3 million Hungarian families are getting a total 1,000 billion forints back, he said.

Source: http://mtva.hu/hu/hungary-matters