Hungary Authorities Fail to Comply with Consultation Duty on FX Loans, Says ECB

(MTI) – Hungarian authorities have failed to comply with the duty to consult the European Central Bank (ECB) about the draft law concerning certain measures on FX loan contracts, an opinion of the governing council of the ECB, published on its website on Tuesday evening, shows.

The ECB received a request from the Hungarian Economy Ministry for an opinion on a draft law on certain measures relating to consumer loan contracts, said the bank.

Several amendment proposals were submitted to the draft law to Hungary’s parliament, none of which was sent to the ECB, it said.

The draft law was adopted by Hungary’s parliament on 4 July 2014.

The Supreme Court laid down the seven principles (clarity, itemised listing, objectivity, factuality and proportionality, transparency, the right of termination and symmetry), and laid down that, if these are met, the unilateral amendment of the general terms and conditions of a consumer loan contract is not to be considered unfair.

For the sake of consistency and legal soundness, it could have been made clearer in the related law that a decision as to whether a particular condition imposed by unilateral amendment of the general terms and conditions applied by a financial institution is fair or not has to be assessed exclusively on the basis of the seven principles, the ECB argued in the opinion.

Such measures could put a significant strain on the banking sector, potentially adversely affecting the stability of the Hungarian financial sector as a whole, it added.

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