Conflicting emotions on CJEU's line on floor clauses

Conflicting emotions on CJEU’s line on floor clauses

Disappointment in consumers associations, cautious euphoria in Spanish banking system

Reactions on CJEU’s Advocate General’s decision on limiting the floor clauses’ retroactive effect were immediately undertaken. The most-affected banking entities by this measure are not hiding their joy but cautiously: the final sentence will not be known until December 2016.

CEJEU is admitting the Spanish Supreme Court’s sentence obliging Spanish banks to give back their received overpaid amounts by the mortgage-floor-clauses-affected clients since May 2013 but not to those before, as consumers were claiming. It is calculated that the amount that banking entities should have to pay would be around 5.000 million euros. To face those payments, banks would have provisioned already around 3.000 million euros more.

Following some experts, admitting the total retroactivity of floor clauses would affect banks’ solvency and it would speed up banking mergers in Spain. They are pointing out that the CJEU’s Advocate General’s line would be determined by Brexit’s and Italian banking crisis’ consequences in Europe.

Consumers associations have protested against this CJEU’s decision that, although is not final and binding, it is used to be taken into account to decide the ultimate sentence. They are alleging that the European Court has chosen to side with banks instead of citizens, based on just an assumption: the likely Spanish banks’ bankruptcy if it would be obliged to give their clients back their received amounts from the floor clauses mortgages since that mortgages started to be enforced in 2004.

They are not doubting on calling this decision as a hit for the juridical security in the EU and as a Law’s disclosure against the macro economy. In any case, it seems to be clear that it sets a bad precedent for the future.

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