By Sebastijan R. Maček | sta.si
03-02-2022
The National Assembly has passed an act that forces banks to share part of the burden of the surging cost of loans denominated in Swiss francs. [Nejc Pintar/Shutterstock]
The National Assembly has passed an act that forces banks to share part of the burden of the surging cost of loans denominated in Swiss francs, a move banks say is unlawful and would be promptly put to the test at the Constitutional Court.
Swiss franc loans used to be hugely popular due to lower interest rates, but an estimated 32,000 borrowers saw their loan payments rise substantially after the franc rose against the euro in 2015.
Claiming that they were insufficiently informed about the currency risk, they got organised and mounted a lengthy campaign to make banks responsible.
The law passed on Wednesday in a rare cross-partisan vote limits how much of the increase in the franc-euro exchange rate can be passed on to borrowers and affects all loan agreements signed between mid-2004 and the end of 2010, even loans that have been fully paid off. It also includes penalties for banks that do not comply.
The law was welcomed by borrowers, who have so far been forced to pursue claims against banks on an individual basis in front of courts – with mixed success – as a long-overdue solution. Their association said it was the recognition by the parliament of the systemic nature of the issue.
Banks, however, have come out in force against the law and announced an immediate Constitutional Court challenge.
The Bank Association, an interest group representing all Slovenian banks, says the penalties could result in most banks in the country being stripped of their licences.
Stanislava Zadravec Caprirolo, the association’s head, said that the act was “an insult to all those who in the past conservatively decided to borrow in the local currency or euros, even though it was more expensive for them.”
Banks estimate the total cost of the law to be over €300 million.
(Sebastijan R. Maček | sta.si)