The Court of Justice of the European Union (CJEU) judgement about matter C-265/22 was announced last 13th July -the same day of the ruling-, solving a reference for preliminary ruling posed by a Spanish court regarding clauses which establish the mortgage loan benchmark for those arranged with consumers.
The mortgage loan benchmark was the most used rate by all institutions during the 90s and early 2000s, specially by savings banks, which controlled the loan grant market to purchase homes until in 2004 and 2005 the war for mortgages started triggered by the housing boom. This allowed banks to enter into a very profitable market and EURIBOR prevailed as the main benchmark for the majority of variable rate mortgages in Spain.
In this context, Tecnotramit reminds that in the recent judgement, CJEU does not determine if the mortgage loan benchmark clause is abusive, but analyses the parameters to judge on transparency and abusiveness. European justice ruled abusiveness must be analysed and reminded that the lack of transparency does not cause a clause to be abusive in its own right. That is to say, an evaluation should be carried out if the consumer, treated legally and fairly, would have also agreed upon the interest rate and, furthermore, compare if it differs greatly from other regular interest rates on the market.
What practical consequences does CJEU’s judgement have?
David Viladecans Jiménez, Legal Department Manager at Tecnotramit, regrets the judgement ‘has triggered many reactions, of different importance, the majority of which are far from the ruling’s real content,’ and analyses the practical consequences it will have on the Spanish mortgage market.
‘First of all, we must wait for the Supreme Court to receive the judgement. It already considered such clauses to not be transparent, and still, when judging abusiveness, did not deem them to be so. As to considerations relating to negative rates, made by the CJEU regarding the judgement on transparency, they do not contribute much to today’s setting,’ as our expert claims.
In other words, according to our legal analysis, the ruling ‘outlines the control of transparency and abusiveness on clauses that use mortgage loan benchmark, but does not excessively change the current rules of the game, which are making courtrooms dismiss the majority of claims against this clause.’ ‘We must wait for the Supreme Court’s ruling to see where CJEU case law really lies,’ adds Viladecans Jiménez.