After several years of legal battles with the banks’ attorneys, case law favorable to borrowers with Swiss franc loans has now become established in the courts. Loan agreements are being invalidated in whole or in part (so-called “de-franking”), which means significant gains for borrowers and deprives banks of their expected profits. If a loan agreement is voided, the borrower need only demonstrate that they have already repaid to the bank the principal amount of the loan they received from the bank over a dozen years earlier and may demand that the mortgage be removed. In contrast, in the case of the so-called “de-franking” of a loan agreement, the loan is treated from the outset as having been granted in Polish zlotys but with a very low interest rate, as it was set according to the LIBOR rate. In this case, in addition to the loan principal, the borrower must demonstrate that they have repaid a small amount of interest to the bank and may also demand the removal of the mortgage registered on their property.
When, in March 2023, an opinion from the CJEU Advocate General—which was particularly significant in the context of settlements between Swiss franc borrowers and banks—was issued, stating that banks are not entitled to any compensation for the use of the loan principal granted to borrowers, one might have gotten the impression that a golden age had dawned for Swiss franc borrowers. It turned out, however, that the so-called Swiss franc borrowers—who, over a dozen years ago, were presented by banks with loan agreements that exposed uninformed borrowers to exchange rate risk, leading to a staggering increase in their debt to the banks— have now become the biggest beneficiaries of these unlawful bank practices. All a borrower needs to do is take such a contract to court to be released from the debt imposed on them by the bank.
Unfortunately, my fears may be confirmed. Namely, the banking lobby is not giving up. Since banks can no longer count on favorable rulings in court, and more than half of the so-called Swiss franc loans remain open to challenge, by a strange coincidence, information is beginning to leak into the public domain about a draft Swiss franc loan bill being prepared by the Polish Financial Supervision Authority (KNF). This is, of course, being presented as a bill designed to meet borrowers’ expectations, but I fear it has nothing to do with protecting them. Rather, it is an attempt to stem the tide of lawsuits against banks—a way to limit the ability of borrowers who have not yet decided to take their cases to court to assert their rights. The text of this bill has still not been made public anywhere, but given the timing of its introduction, I fear it does not bode well for borrowers.
