The banks say they have not yet exhausted the remedies in the part concerning interest an elucidation on echase.org
The judgment in favor of the franc will be mostly paid to debtors who have taken out loans in euros and dollars. Nine out of ten loans granted in Croatia have variable interest rates and up to this verdict, these interest rates were one of the sacred cows that could not be touched.
Big money in the game
It was not until October 2012 and December 2013 that the Ministry of Finance defined the criteria by which interest rates could change! In the Commercial Court’s ruling, the obligation to change interest rates transparently extended to an earlier period, opening up hundreds of thousands of citizens’ claims against banks. Considering that citizens currently have USD 127 billion in loans and have paid back at least twice as much in the last fifteen years, it is clear that big money is at stake.
In our estimation, homeowners in Swiss francs are the least likely to receive repayments, although the dispute is due to their loans. Their status, at least when it comes to interest rates, was resolved through an intervention in the Good Finance Credit Act, which cut interest rates on home loans at ABC to 3.23 percent. For the largest number of loan beneficiaries, this is significantly lower than the initial loan price. The ABC claims that in the period from 2004 to 2008, when the largest number of loans was approved, the Swiss were given an interest rate of 4.62 percent. In the meantime, these loans went up from 0.5 to 1.5 percentage points, but also went down to their initial values.
We calculated that an increase of 0.5 percentage points would increase the loan of USD 400,000 (without the effect of changes in the exchange rate) of USD 1350 per year. A change of one percentage point brings USD 2,700 higher annual interest, and a change of 1.5 percent to USD 4050.
When the government changed the law in December 2013 and reduced the interest to the Swiss to 3.23, it consciously went below the initial interest rate (4.62%) to compensate people for the loss due to an earlier increase in interest and exchange rates. Bankers will now use this and prove in court that they have no debt to clients who have a home loan in ABC. However, such protections were not provided to citizens who repaid the Swiss loan before that legal change or took it for another purpose, as did numerous debtors who took dollars and euro loans, and their interest rates increased in the same way as they did.
A possible settlement
Otherwise, all those who decide on individual disputes come at a cost that is not small, for example, court fees cost several hundred dollarss, each act by a lawyer from 500 to one thousand dollarss, depending on the value of the dispute, and it may be necessary to hire a court expert (from 1500 to 2000 $). It is possible that banks will propose a settlement for other debtors as well, but they do not yet disclose the cards and claim that all legal remedies in that part of the judgment have not been exhausted.
How to get your money back
- Anyone with a floating rate loan dated September 10, 2003, regardless of currency, can appeal to the judgment of the High Commercial Court in the case and seek repayment of overpaid interest at their bank. The bank may accept this request, reject it or offer its client a solution.
- If the variable interest rate problem is not resolved by agreement between the bank and the client, the latter can hire a lawyer and seek a refund of the overpayment by filing a lawsuit.
- The Good Finance Association, that is, , cannot initiate legal proceedings on behalf of individual Good Finances to repay the overpaid money, but possibly influence a consensual solution that would be in the interest of the banks for the cost, unless they assess that their image will not harm the client’s willingness to sue them.