Swiss franc loans and borrowers’ rights in the light of 4 important judgments of the European Court of Justice
By George Kazoleas, Lawyer LL.M. The EU Court of Justice has issued important decisions in recent years on the issue of bank foreign currency loans, essentially in Swiss francs, which has created significant case law useful for defending the interests of borrowers who have been “trapped” by credit institutions in contracts with abusive currency risk clauses resulting in undue overchargings. In summing up this case-law, the European Court of Justice has reached the following main conclusions: 1.The loan agreement must set out in a transparent manner the exact functioning of the foreign currency conversion mechanism and the exchange rate clause so that the consumer can assess the financial consequences of this mechanism. 2.The borrower must be clearly informed by the bank that, by concluding a loan agreement in a foreign currency, he / she is exposed to a certain foreign exchange risk that he / she may find it difficult to cope with in the event of a devaluation of the currency a