Following a series of CJEU rulings unfavorable to banks, which deprived the banking sector of any hope of being able to recover from Swiss franc borrowers anything beyond the principal amount of the loan in court, the legal situation for banks in cases involving so-called Swiss franc loans has become dire.
The CJEU’s interpretation of European Union law indicates that a bank is entitled only to the repayment of the principal amount of a loan granted many years ago, without the possibility of indexing it or claiming any compensation. If we also take into account the fact that Polish court rulings tend to invalidate Swiss franc loan agreements, it becomes clear that granting such loans was the worst business decision made by the banking sector in the 21st century. In fact, the roles in the relationship between the bank and the Swiss franc borrower have now been reversed. The latter has transformed from the bank’s debtor into its creditor. It is no longer the borrower who owes the bank repayment of the loan with interest calculated at the bank’s discretion, but rather, due to the invalidity of the loan agreements, the banks have become the borrowers’ debtors, obligated to return to them all funds transferred to them from the moment the defective agreement was concluded. At most, the banks may offset the amount of the loan granted.
Most often, however, even after the setoff, the borrowers are still entitled to a refund of the overpaid loan principal, plus interest calculated on the total amount paid and the costs of the proceedings. In this situation, it is in the banks’ best interest to reach settlements with borrowers as quickly as possible and refund the overpaid principal, thereby protecting the bank from further losses (e.g., interest, litigation costs).
It is therefore no surprise that the Polish Bank Association is calling for the passage of a special “franc” bill. Officially, the bill is justified on the grounds of protecting borrowers, but the real reason is entirely different. After all, borrower protection is already ensured by existing European law, and no such law is needed in this regard. For now, the government is issuing statements critical of the Polish Bank Association’s proposal. The question is simply how long this situation will last.
