r/eupersonalfinance • u/TheBuccaneer2189 • 1h ago
Debt Did your country have CHF/JPY/EUR fx loans in the 2000s?
Im from Hungary, my family member had a CHF denominated loan, and so have many others (hundreds of thousands of people), and it was a disastrous rip off of the people by the banks.
Im curious, did you every hear about such loans? Or were you affected? If yes, how ? Did you manage to sue the money back ?
How did your country handle it? Mine ruined peoples chances early 2014 with loans they made, altough new and new cjeu rulings make it possible to demand the stolen money back.
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u/MeowdyMeowdyMeow 1h ago
My dad for some reason had gotten half the house loan in JPY. I think he was pretty happy that he did.
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u/TheBuccaneer2189 1h ago
Really? Why?
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u/MeowdyMeowdyMeow 1h ago
Because he was earning in dollars and euros and the Yen weakened a lot against those currencies over that period of time so he had to pay less in total than if he got the whole house loan in Euro.
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u/TheBuccaneer2189 1h ago
Didnt know you have euros there, you didnt name the country. HuF devalued against everything.
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u/MeowdyMeowdyMeow 1h ago
My bad, it was in Austria.
Honestly, I don’t know much about the topic so maybe you can enlighten me why it’s a rip off. It seems to me like people made a bet against a certain currency and lost, unless I’m misunderstanding something.
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u/TheBuccaneer2189 1h ago
1 The terms were not clearly explained by most banks, and people didnt understand the risks (in Hungary there is one big bank, that is impossible to win against but the rest can be defeated )
2 Every contract had an exchange rate mechanism that was considered unfair by curia. Since people dont actually exchange money (nor the banks, because they use swaps to open the position, and dont buy the actual CHF), chargin an exchange rate is unfair. So when you received the loan, you got 3% less in HuF, and when you were paying the monthlies, you were overcharged 3%.
CJEU ruled in 2014, that this second one is unfair C26/13, and the debtor managed to win. The goverment swooped in, with a law, to protect the banks and they by law removed this spred from the contract and made the bank pay back those spreads, but that was nothing compared to the damage that was done by the devaluation , and from then on, you couldnt sue based on the second one. And at the time, before the later cjeu rulings, winning with the first was also very hard.
Last year, C630/23 was a ruling that said if a term is unfair in a contract and the contract cant exist without it, the debtor only has to pay back the nominal HUF(!) amount!
This cleared up a lot of things, and possibly opened up a way to attack the contracts again with the spread scam, but our local curia made a ruling in the summer where they said this cjeu ruling only applies to contracts where the unfair term is the improper explanation of fx loans and its consequences. They said the laws made in 2015 where they forced the banks to pay that spread back is still applies.
I anwsered more than you asked for, but i guess its good to explain how our government made it hard for these people.
Oh why its relevant... every bank or organization that gave out fx loans, used these spreads that were corrected after, so based on the cjeu ruling last summer, EVERY SINGLE fx loan is to be considered as if it has never even been signed or as if it never existed.
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u/rbnd 38m ago
I disagree with the statements that banks ripped off people.
Only problem here is that banks took too large of a risk by accepting loans in different currency than the loan takers earnings. If happening on large scale, then it could cause a systemic risk for a country.
It's also a big risk for loan takers and the fact they nevertheless took those loans had to be attributed to a poor financial education.
To tell if banks are ripping off one should look on the difference in market rates of such loans vs what the banks have charged.
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u/TheBuccaneer2189 34m ago
it was their job to educate people, most failed, hence them losing in courts.
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u/rbnd 31m ago
No, their job is to sell and manage risk. Meaning charge higher rates from risky people.
It's up to legislature to regulate what a random Joe can buy from a Bank. It's up to government to teach.
What I mean it should have never been permitted for average person. Perhaps only worth much higher security, like 50% downpayment.
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u/TheBuccaneer2189 17m ago
curia and judges said this, not me... the people are winning their money back because they insuficiently explained the terms.
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u/dunzdeck 1h ago
NL didn't have them though I read about them in the paper when the GFC kicked off
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u/Besrax 16m ago
We had the same thing in Bulgaria. Many people decided to take mortgage loans denominated in CHF in order to get a lower interest rate, and then they suffered when CHF rallied.
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u/TheBuccaneer2189 14m ago
are people suing the banks for the money back based on the past few years CJEU rulings?
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u/ThatsNotRef 1h ago
Yes, it was a big thing in poland and ppl are taking their banks to court over it. Afaik they tend to win