CJEU ruling on WIBOR
On Thursday Court of Justice of the European Union (CJEU) answered questions from one of the Polish courts in a case regarding a mortgage loan with WIBOR interest rate. In its ruling, the CJEU found that the transparency requirement provided for in the directive does not impose an obligation on the bank to provide the consumer with detailed information on the methodology of a benchmark, such as WIBOR.
The Court recalled that WIBOR is subject to an exhaustive legal framework at Union level, which the competent national authorities ensure compliance with. – Therefore, while a benchmark such as WIBOR can be considered compatible with that legal framework, the clause that includes it does not, in principle, in itself create a significant imbalance between the parties to the detriment of the consumer, the CJEU ruled.
President of the Polish Bank Association: The ruling completely eliminated the possibility of challenging the WIBOR index
According to Dr. Tadeusz Białek, the ruling “completely eliminated the possibility of challenging the WIBOR index, which is the basis for interest rates on mortgage loans.” – This is a huge blow to all arguments used by law and compensation firms. WIBOR is not questioned, and banks properly fulfill the information obligations regulated by EU law, because – as the Tribunal itself reminded in its announcement – in relation to mortgage loans for housing purposes, the bank’s information obligation is regulated at several levels by EU law – Białek told PAP.
The president of the Polish Bank Association pointed out that all ideas for the bank to inform about the details of determining the reference index were “explicitly crossed out by the Court as not required in any way by EU law.”
“The oxygen for all WIBOR lawsuits has been taken away”
– In my opinion, the oxygen for all WIBOR lawsuits has been taken away. The CJEU clearly ruled that it is not possible to question the WIBOR reference index and the information obligations fulfilled by banks. I expect that the number of cases in which attempts were made to question contracts will drop significantly, as will the interest in questioning WIBOR, he said. At the same time, he emphasized that there is no final judgment in Poland questioning WIBOR, but there are “over 150 final judgments dismissing WIBOR lawsuits.”
Białek noted that the Court clearly confirmed that WIBOR is subject to the EU regulatory framework, and the European Commission recognized it as one of the key benchmarks. – Therefore, the EU Unfair Contract Terms Directive (Directive 93/13) does not refer to the indicator itself. The variable interest rate clause itself may be subject to examination, but WIBOR is not – he added.
Pursuant to the Act, unless the parties have agreed on a fixed mortgage loan interest rate, it is determined as the value of the reference index and the bank’s margin.
The reference index used in Poland is WIBOR, which is generally based on, but not exclusively, real transactions. It also includes the so-called binding and model quotes, i.e. the rates at which banks participating in determining the index would be ready to place and accept a deposit from another participant in this process or on the underlying market.
The questions were asked for a preliminary ruling by the District Court in Częstochowa regarding the WIBOR reference index in a mortgage loan agreement with a variable interest rate. The consumer concluded a 20-year loan agreement in August 2019 and borrowed over PLN 400,000. zloty. In his lawsuit, he demanded a declaration that the contractual clause regarding the interest rate was unfair and therefore not binding on him.
The answers to the preliminary questions do not resolve the case before the Polish court. The dispute will be resolved by a national court.
