How can Spanish Bankxit affect mortgages in Spain?
The Spanish Bankxit is a concept that is born from a sentence of the Spanish Supreme Court limiting in time the right to recover the amounts paid to the Spanish banks due to mortgage clauses that have been declared void, mainly the “floor clauses”.
These clauses have been common in the Spanish banking practice. And although they have been declared null, the Spanish Supreme Court, contrary to both Spanish law and European legislation binding Member States of the European Union, has limited the right of consumers to claim only from 2013 onwards.
The European standard which Spain is ignoring, as if a Bankxit it were, is Directive 93/13 / EEC, specifically paragraph 1, Article 6, quoting verbatim:
“Member States shall lay down that unfair terms used in a contract concluded with a consumer by a seller or supplier shall, as provided for under their national law, not be binding on the consumer and that the contract shall continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair terms”.
Obviously such “non- bindment” for the consumer should be questioned only by supranational European bodies; the ECJ alone can interpret such cases. However it is being unilaterally supplanted by the highest Spanish court.
Taking into account that the article states no limit in the “non-bindment” issue, two measures are imperative:
- a) On the one hand the cancellation of the clause, being compulsory to remain in force the rest of the contract,
- b) On the other hand, the total return of the wrongfully amounts obtained as a result of such clauses.
Thus, when the sentence of March 25, 2015, interpreting the previous judgment of May 9, 2013, cuts or limits the right of consumers to demand only until the date of May 9, 2013, it is clearly limiting and unilaterally interpreting a rule for which a national court is not competent.
And this is precisely the view that in its previous report the European Commission issued in Case C- 145/15 Prejudicial, as follows:
“In accordance with Articles 6.1 and 7.1 of Directive 93/13 / EEC and the interpretation thereof made by the Court, it is not possible for national courts to moderate the return of amounts paid by consumers -to which the professional is bound – in application of a clause declared null due to lack of information and / or transparency issues”.
It is distressing to see Spain, a consolidated EU member, with European aspirations, active participation and representation in all European bodies, thus place itself on the opposite side of what Europe commands.
This anti-European stance, which places bankers interests above the interests of citizens themselves, calls on us to reflect on whether the European Union is truly created for the benefit of the people and cultures that conform it. Or is it only created for the defence of the monetary system, and therefore abides by these common laws as long as our national banking systems are not threatened; and when that happens, above the national and European laws, the Bankxit is applied?
For these reasons, if the European Union really counts for the fulfilment of its purposes with human, material, financial and regulatory resources, we hope that on July 12 the Advocate General of the European Court will support the storyline that so far Europe has followed, defending consumers from abusive Spanish banking products.
In short, the desirable, Europeanist and lawful result will be that Spanish courts continue to respect the European legislation and that the Spanish banking system remains within the European Union.
Raúl del Canto
Partner at Del Canto Chambers,
Lawyer & Environmental Adviser