Royal Decree-Law 1/2017, of January 20, on urgent consumer protection measures regarding floor clauses.
On January 21, it was published in the Official State Gazette (hereinafter, “BOE“) Royal Decree-Law 1/2017, of January 20, on urgent consumer protection measures regarding the floor clause (hereinafter, “RD-law 1/2017“).
The purpose of RD-Law 1/2017 is to establish measures that facilitate the return of amounts unduly paid by consumers to credit institutions in application of certain floor clauses contained in loan or credit contracts secured with a real estate mortgage, meaning a floor clause is any stipulation included in a loan or credit contract guaranteed with a real estate mortgage at a variable rate, or for the variable section of another type of loan, which limits downwards the variability of the interest rate of the contract.
Specifically, RD-Law 1/2017 aims to advance the measures aimed at protecting consumers by establishing a channel that facilitates the possibility of reaching agreements with the credit institutions with which they have signed a loan or credit contract with a mortgage guarantee that resolve the disputes that may arise as a result of the latest judicial pronouncements on floor clauses and, in particular, the ruling of the Court of Justice of the European Union of December 21, 2017. 2016, in the joined cases C-154/15, C-307/15 and C-308/15 (hereinafter, the “STJUE of December 21, 2016“).
For the best presentation of the new features introduced by RD-law 1/2017, we consider it appropriate to proceed to present, first of all, the jurisprudential background of this regulatory provision, and then mention the most important specifications contained in the aforementioned RD-law 1/2017.
1.- Jurisprudential background
On May 9, 2013, the Supreme Court analyzed in its Ruling no. 241/2013 (hereinafter, the “STS of May 9, 2013“), in the framework of a collective action brought by a consumer association against several banking entities, the abusive nature of the floor clauses.
The three main conclusions reached by the Supreme Court in the STS of May 9, 2013 were (i) that floor clauses are generally lawful, as long as they satisfy the requirements of substantive or material transparency (§§ 257 and 293 [a]); (ii) that the floor clauses that are the subject of the procedure are void due to lack of substantive or material transparency (§ 225); and (iii) that the retroactive effects of this nullity must be limited, so that it will not cover payments already made on the date of publication of the Judgment (§ 294), since otherwise said retroactivity would cause serious disruption to public economic order (§ 293).
The limitation of retroactive effectiveness was confirmed by the Supreme Court in ruling no. 139/2015, of March 25 (hereinafter, the “STS of March 25, 2015“), within an individual action filed against one of the entities party to the judicial process resolved by the ruling of May 9, 2013. Specifically, in the STS of March 25, 2015, the Supreme Court concluded that, when applying the doctrine established in the STS of March 9, 2013, a floor clause is declared abusive, the return to the borrower will be made exclusively from the date of publication of said ruling. 2013.
However, various Spanish courts questioned before the Court of Justice of the European Union (hereinafter, the “CJEU“) the jurisprudence of the Supreme Court on the basis of European Union Law through various preliminary rulings. On December 21, 2016, the Court of Justice of the European Union handed down a ruling in the joined cases C-154/15, C-307/15 and C-308/15, answering these preliminary rulings.
In the STJEU of December 21, 2016, the CJEU has declared that the limitation in time of the effects of the declaration of abusiveness of a floor clause is not compatible with Union Law (§ 74), since said limitation of retroactive effect offers the consumer incomplete and insufficient protection and does not constitute an adequate and effective means for the use of said abusive clause to cease (§ 73).
In this sense, according to the ruling of the STJUE of December 21, 2016, “Article 6(1) of Council Directive 93/13/EEC on unfair terms in contracts concluded with consumers must be interpreted as precluding national case law which limits in time the restorative effects linked to the declaration of the unfair nature, within the meaning of Article 3(1) of that Directive, of a term contained in a contract concluded with a consumer by a professional, circumscribing such effects. restitution exclusively to the amounts paid unduly in application of said clause after the pronouncement of the judicial resolution by which the abusive nature of the clause in question was declared.”.
The CJEU has based the ruling, among other reasons, on the fact that a contractual clause declared abusive has never existed, so that it cannot have effects on the consumer (§ 61). Consequently, the CJEU argues, the judicial declaration of the abusive nature of such a clause must result in the reestablishment of the factual and legal situation in which the consumer would find himself if said clause had not existed, specifically through the constitution of a right to restitution of the advantages unduly obtained by the professional to the detriment of the consumer by virtue of the abusive clause (§ 66).
2.- RD-law 1/2017: main developments
In accordance with the Explanatory Memorandum of RD-Law 1/2017, it is foreseeable that the recent ruling of the CJEU will lead to an increase in the demands of affected consumers requesting the restitution of the amounts paid in application of the floor clauses, so it is necessary to arbitrate a simple and orderly channel, of a voluntary nature for the consumer, which makes it easier for them to reach an agreement with the credit institution that allows them to resolve their differences by restitution of said amounts. Well, with RD-law 1/2017 the aim is to offer minimal intervention and regulation, giving consumers an instrument that allows them to obtain a quick response to their complaints.
The main novelties provided for by RD-law 1/2017 in order to facilitate an agile and satisfactory solution for the consumer are the following:
(i) Credit institutions are required to implement afree complaint procedure prior to filing legal claims, which will be voluntary for the consumer and mandatory for credit institutions to respond to, and whose purpose will be to respond to the requests that consumers make within the scope of this RD-law 1/2017. Credit institutions must guarantee that this claim system is known to all consumers who have a floor clause included in their mortgage loan.
In this regard, RD-Law 1/2017 establishes that once a prior claim has been received from a consumer, the credit institution must calculate the amount to be returned and send the consumer a communication breaking down said calculation; In this breakdown, the credit institution must necessarily include the corresponding amounts of interest. In the event that the entity considers that the return is not appropriate, it will communicate the reasons underlying its decision, in which case the extrajudicial procedure will be concluded. The consumer must state whether he or she agrees with the calculation. If it is, the credit institution will agree with the consumer on the return of the cash, and may also agree on the adoption of a compensatory measure other than the return of the cash. The maximum period for the consumer and the entity to reach an agreement and to make the amount to be returned available to the former will be three months from the filing of the claim.
On the other hand, it is foreseen that, during the time in which the prior claim is substantiated, the parties will not be able to exercise any judicial or extrajudicial action against the other in relation to its object, with the aim of avoiding bad faith practices that only sought to initiate legal actions from the first moment.
(ii) Measures are established regarding theprocedural coststhat encourage the extrajudicial recognition of the consumer’s right, as well as the raid by credit institutions, with the aim that the consumer sees his right restored in the shortest possible time, avoiding having to exhaust a judicial process that drags on over time.
(iii) Thetax treatment of amounts receivedfor the return of loan interest rate limitation clauses derived from agreements entered into with financial entities, for which purpose the Personal Income Tax regulations are modified.
In view of the jurisprudential background referred to in this Alert, and as indicated in the Explanation of Reasons of RD-Law 1/2017, it is foreseeable that, in order to determine whether a floor clause is included in the scope of application of said rule, and therefore whether the return of the amounts unduly paid by the consumer to the credit institutions in application of said floor clause is appropriate, the following criteria will be considered, among others: the creation of the appearance of a variable interest loan contract in which downward fluctuations in the reference index will result in a decrease in the price of money; the lack of sufficient information that it is a defining element of the main object of the contract; the creation of the appearance that the floor has as an inseparable consideration the fixation of a ceiling; its eventual location among an overwhelming amount of data among which is masked and dilutes the consumer’s attention; the absence of simulations of various scenarios, related to the reasonably foreseeable behavior of the interest rate at the time of contracting, in the pre-contractual phase; and the lack of clear and understandable prior warning about the comparative cost with other products of the entity itself.
RD-law 1/2017 came into force on the day of its publication in the BOE, which occurred on January 21, 2017.
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The content of this Alert is for informational purposes only. Any decision or action based on its content must be subject to appropriate professional advice.
