{"id":2553,"date":"2017-02-04T00:00:00","date_gmt":"2017-02-04T00:00:00","guid":{"rendered":"\/\/www.garciavillas.es\/floor-clauses-clausulas-suelo-contravened-european-law-and-was-unfair-to-customers\/"},"modified":"2023-10-23T10:38:36","modified_gmt":"2023-10-23T09:38:36","slug":"floor-clauses-clausulas-suelo-contravened-european-law-and-was-unfair-to-customers","status":"publish","type":"post","link":"https:\/\/grupo-garcia.es\/en\/floor-clauses-clausulas-suelo-contravened-european-law-and-was-unfair-to-customers\/","title":{"rendered":"\u201cFloor clauses\u201d (cl\u00e1usulas suelo) contravened European law and was unfair to customers."},"content":{"rendered":"

The European Court of Justice (ECJ) on December 2016 ruled that a Spanish Supreme Court decision capping lenders\u2019 liability for so-called \u201cfloor clauses\u201d (cl\u00e1usulas suelo<\/em>) contravened European law and was unfair to customers.<\/p>\n

These clauses set a \u201cfloor\u201d or minimum interest rate that clients have to pay the bank, even if the benchmark rate \u2013 normally the Euribor \u2013 drops below that rate. However, with the Euribor rate dropping to historical lows in late 2008, customers with these loans failed to benefit. There is possibly 2.5 million mortgages with so-called \u201cfloor clauses\u201d in Spain. In other words, in this case, the mortgage cannot benefit<\/strong> from a low interest rate and from the successive drops that may occur, as the minimum interest rate is \u201cshielded\u201d and any interest rate set below the one established in the \u201cfloor clause\u201d cannot be applied. For several years, the Euribor rate has been very low and these clauses have represented considerable losses<\/strong> for many customers.<\/p>\n

Spain\u2019s banking industry has been on tenterhooks in the lead-up to Tuesday’s decision as it waited to learn if refunds would only date to 2013, or whether the refunds would be applied retroactively to 2009 on, the year in which the banks began to apply floor clauses. With some 2.5 million mortgages with floor clauses in Spain, the difference is huge: estimated at between \u20ac3 billion and \u20ac5 billion.<\/p>\n

In its ruling, which cannot be appealed, the ECJ said the Spanish Supreme Court\u2019s 2013 decision to limit refunds to the period from May 2013 on \u2013 a ruling made to protect a debt-ridden Spanish banking sector still reeling from the bank bailout<\/a> \u2013 \u201cfailed to provide complete protection\u201d to consumers\u201d and \u201cdid not constitute an adequate and efficient means of an end to abusive clauses.\u201d<\/p>\n

In July, an EU Advocate General praised the Supreme Court\u2019s role in protecting the banking sector under exceptional circumstances, a statement which gave lenders hope for a favorable decision.<\/p>\n","protected":false},"excerpt":{"rendered":"

The European Court of Justice (ECJ) on December 2016 ruled that a Spanish Supreme Court decision capping lenders\u2019 liability for so-called \u201cfloor clauses\u201d (cl\u00e1usulas suelo) contravened European law and was unfair to customers.<\/p>\n

These clauses set a \u201cfloor\u201d or minimum interest rate that clients have to pay the bank, even if the benchmark rate \u2013 normally the Euribor \u2013 drops below that rate. However, with the Euribor rate dropping to historical lows in late 2008, customers with these loans failed to benefit. There is possibly 2.5 million mortgages with so-called \u201cfloor clauses\u201d in Spain.<\/p>\n","protected":false},"author":1,"featured_media":584977,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[15],"tags":[],"class_list":["post-2553","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"\n\u201cFloor clauses\u201d (cl\u00e1usulas suelo) contravened European law and was unfair to customers. | Grupo Garcia<\/title>\n<meta name=\"description\" content=\"\u201cFloor clauses\u201d (cl\u00e1usulas suelo) contravened European law and was unfair to customers. | Grupo Garcia\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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