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Consumers' update on loans in foreign currency

25 August 2014

After the judgment in Case C-26/13 Árpád Kásler and Hajnalka Káslerné Rábai v OTP Jelzálogbank Zrt, the Court of the European Union issued the Press Release no. 66/14 in relation to unfair contract terms. As it is mentioned therein, consumers who contract a loan in foreign currency must be able to assess the economic consequences of the application of a rate of exchange (the selling rate) to the repayment of the loan which is different from that applicable to the calculation of the amount of the loan when it is made available (the buying rate).

In addition, the Court states that "a term defining the main subject matter of the contract is exempt from an assessment of its unfairness only if it is in plain, intelligible language. In that connection, the Court states that that requirement is not limited to clarity and intelligibility from a purely structural and grammatical point of view. To the contrary, the loan contract must set out in a transparent fashion the reason for and the particularities of the mechanism for converting the foreign currency."
Read the whole press release here:

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