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Court rejects KDB Bank's defense of contract changes

Issues

The Municipal Court of Budapest rejected Korean-owned KDB Bank's defense of changes it made to borrowers' contracts in a ruling on Friday.

The judge said practically none of the lenders' contract conditions – spelled out in 50 pages of fine print – had met the legal requirements for transparency. Under borrowers' relief legislation approved in the summer, lenders must refund clients for making unilateral changes to loan contracts unless they can defend the practice in court.

KDB Bank is one of many lenders defending their contract changes in court. Of the some 50 rulings the court has made in the cases so far, just three have been in favour of banks – and those only partially. In three cases involving four lenders, the matter was referred to the Constitutional Court.

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