WARSAW, July 19. (Reuters) – Poland’s Supreme Court said Monday that it will re-weigh the guidelines for dealing with foreign currency loans on September 2, after a long-awaited ruling was postponed in May.
Many borrowers harassed Polish banks over mortgages they took out in Swiss francs over a decade ago to take advantage of low interest rates in Switzerland, but faced much higher costs when the value of the Polish zloty fell.
Most of the plaintiffs have won their cases since the European Union’s Supreme Court ruled in 2019 that mortgage contracts with provisions deemed unfair could be canceled.
Central Bank Governor Adam Glapinski said earlier this month that the legal risk associated with foreign currency mortgages due to the lack of uniform case law has become a major threat to the stability of Poland’s financial system.
The May Supreme Court hearings, which had already been postponed twice, were expected to determine how the courts should deal with key issues in foreign currency borrowing cases.
For example, it weighs whether banks can charge interest on a loan that has been judged unfair by a court and when a period begins during which banks can demand refunds.
However, he postponed his decision and chose to seek the opinion of institutions such as the central bank of Poland, the financial regulator KNF and the children’s ombudsman.
Borrowers and banks, for which loans in foreign currency are one of the main risk factors, are eagerly awaiting the court’s decision.
German Commerzbank, Portuguese BCP and French BNP Paribas have portfolios of mortgage loans in Poland denominated in foreign currencies, as do local lenders such as PKO BP.
Report by Agnieszka Bartechko Edited by Joe Bavier