Integration Of Savings Coops Unconstitutional On 2 Points, Top Court Rules

Budapest, July 2 (MTI) – The Constitutional Court has found two provisions of the law on the integration of savings cooperatives unconstitutional, the court said.

The court upheld only a small part of the legal complaints against the law, ruling that on the whole it was in line with Hungary’s fundamental law.

The court ruled that citing the public interest in the law was justified.

However, it scrapped the part of the law which called for cooperatives to mutually guarantee debts beyond the debt guarantees provided by the Integrated Association of Savings Cooperatives and Takarekbank, the “central bank” for the savings cooperatives. The decision takes effect on December 31, 2014.

Further, the court annulled the provision which gave any future successors of the state-owned Development Bank MFB and the Hungarian Post (Magyar Posta) privileged rights over other shareholders of Takarekbank. Under these privileges, the potential successors would have been granted permanent and unalienable shareholder rights which could not be suspended.

The court also ruled that from July 1 this year Takarekbank can only publish rules in its basic guidelines for cooperatives which serve the direct purpose of carrying out the law’s intent, including any European Union requirements for the integrated functioning of savings cooperatives.

Photo: frtt.hu

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