The EU Justice rules against Spanish banks over mortgage floor clauses case
The European Court of Justice have ruled this week the refund of the so called floor clauses in mortgage contracts. This kind of clauses were implemented in mortgage contracts between Spanish banks and its clients during the last years, and now the European Justice establishes its illegal status.
The verdict is considered by many experts as a shock to the Spanish banking sector
The verdict is considered by many experts as a shock to the Spanish banking sector, which must return all the money got thanks to these clauses. According the media Agencia Efe, the Bank of Spain estimates that the amounts to be refunded to bank clients could reach more than 4,000 million euros.
A different point of view between Spanish and European justice
The interpretation of the Spanish Supreme Court was the opposite to the European sentence, as in 2013 annulled the claim of bank clients for the abusive aspects of these kind of clauses. In fact, the Spanish justice only imposed the refund of what was collected from May of 2013, considering that until that moment financial institutions could assume that the clauses were legal, avoiding the economic impact of a full refunding. In other words, no retroactivity had to be applied according the point of view of the Spanish Supreme Court.
The total amount to be refunded by Spanish banks, considering this last verdict from the European justice, could be between 5 and 7 billion euros according several sources, but it is difficult to mention an specific figure yet. What is sure is that the impact for the Spanish banking sector is going to be very relevant.