Budapest court to hear unilateral FX loan issues

Issues

The Budapest Capital Regional Court will on Friday hear the first challenge from financial institutions to the unfairness of the unilateral amendment of foreign-currency-denominated loan contracts. Kéthely és Vidéke Társszövetkezet launched the challenge to be heard on Friday.

The next case to be heard will be the filing of K&H Bank, the unit of Belgium's KBC, on Monday. The number of filings for remedy surpassed 30 by the beginning of this week. Banks and financial institutions must submit the challenges by August 25 the latest.

The court has to put the cases on its agenda in eight days and must reach a verdict in 30 days. A piece of legislation approved by lawmakers in July will require banks to compensate retail borrowers for the use of exchange rate margins and for making unilateral changes to contracts.

The legislation declared unilateral changes to retail loan contracts unfair unless banks prove otherwise at court.

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