Erste to request revision of second-instance ruling in loan case

Issues

Erste Bank intends to request the revision of the parts of a second-instance ruling under which its regulations regarding unilateral changes to retail loan contracts were on fair, the bank said yesterday. Erste is the first affected institution which requests a revision of the second-instance ruling.

The Budapest Municipal Court of Appeals on October 22 confirmed a first-instance ruling, rejecting the appeal of Erste Bank, except for two loan products, which were cleared from the charge of being unfair.

The two products which were cleared from the charge of being unfair were a euro-based free-purpose mortgage product and a similar Swiss-Franc-based product.

Under legislation approved in the summer, lenders must compensate retail clients for making unilateral changes to contracts unless they can successfully defend the practice in court. Not a single defense has been entirely successful, although the practice of modifying contracts was ruled fair for some lenders but only for limited periods. Some cases were also referred to the Constitutional Court on the grounds that the right to due process was violated.

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