Budapest Court to rule on unilateral changes to FX loan contracts

Issues

Five banks and financial institutions have submitted files on FX loans to the Budapest’s Regional Court, the court's press department announced on Friday. CIB Bank, Magyar Cetelem Bank, and 3 financial institutions - CIB Ingatlanlizing, CIB Lizing and UCB Ingatlanhitel – are defending their case and claiming the unilateral changes they made to foreign exchange loan contracts are legal, thus hoping to pay less remedy.

Under a law adopted on July 4 by the Hungarian parliament, banks have to compensate customers for FX loan contracts. The law says one-sided contract modifications are void unless the banks can prove in court that the modifications were legal. The Curia, the Hungarian Supreme Court, also said unilateral changes made by a bank to a contract could be considered legal if some principles were respected.

The banks have submitted tens of thousands of pages of documents. The Court will put the cases on its agenda in 8 days. Once a date has been determined, judges must reach a verdict within 30 days, the court’s press statement said.

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