The Court of Justice of the European Union (CJEU) opens the door to massively cancel mortgages linked to the Mortgage Loan Reference Index (IRPH) due to the lack of information given by banks to clients, which can represent a hit in returns for entities of more than 15,000 million euros.
The court considers that the mere fact that the IRPH and its calculation method were published in the Official State Gazette is insufficient for banks to be exempt from responsibility for the information they give to the client. The entities had to indicate to consumers in the contracts that the definition and calculation method of the index is published in the BOE, if the mortgage does not include this aspect, the judges can declare the clause that imposes the IRPH null due to lack of transparency.
“In the present case, it does not appear that the loan contract at issue in the main dispute contains a reference to the Official State Gazette or to the relevant circular of the Bank of Spain. The absence of a reliable indication in this regard may compromise the accessibility of the corresponding information for an average consumer”, indicates the CJEU in its ruling this Thursday.
In the court’s opinion, the fact that the information on the definition of the IRPH and its calculation method is published in the BOE can only excuse the bank from providing the client with information when said information is sufficient for a normally informed and reasonably attentive average consumer to and insightful, would be in a position to understand the specific operation of the variable interest rate calculation method and the economic consequences it entails for your mortgage.
The CJEU recalls that the Bank of Spain, in its 1994 circular, reports on the definition of the IRPH, that for its calculation the average of the Annual Equivalent Rate (APR) at which banks and savings banks then gave mortgages is chosen and warned To entities that, since this index is higher than the average market interest, a negative differential could be applied to match it.
In the opinion of the CJEU, in the mortgage it compares, it indicates that the information is half-given to the client, since it does not even state that the IRPH is calculated through the average APRs (which include not only the average interest of the loans, but the expenses and commissions that clients pay for them) nor does it take into account the warning from the Bank of Spain to apply a negative differential to the IRPH to balance it at other lower indices, such as the Euribor.
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