Uncertainty among Swiss franc borrowers – KNF working on a systemic solution

Jacek Jastrzębski – Chairman of the KNF – has recently stated that the KNF is working on a systemic solution to solve the problem of franking credits. The franking law would impose an obligation to conclude a settlement. The details of this proposal and the bill are not known. What is known, however, is that if such a law were to be in place, it will not be a solution in favour of borrowers, given what a judgment establishing the invalidity of the contract currently provides them with.

The FSC’s settlement proposals have been known since 2020. The KNF’s position is that the restoration of contractual equilibrium, and thus the fulfilment of the objectives of Directive 93/13/EEC, may consist in the conversion of a loan indexed (denominated) to CHF into a PLN credit agreement. The settlement with the bank is to establish such credit repayment conditions as if the credit had been taken out in zlotys from the beginning. It should be borne in mind that conclusion of the settlement also means waiver of the borrower’s claims against the bank concerning application of prohibited provisions by the bank.

This solution does not seem to be a solution to the problem and in a systemic way, as discussed by the KNF. Nor is it beneficial to franc borrowers, given the current high level of interest rates, which, after all, affects the WIBOR index and thus the high instalments on zloty loans. The FSA fails to see that the purpose of Directive 93/13/EEC was to deter traders from using unfair terms in their contracts with consumers. The proposed terms of the settlements appear to abolish the above-mentioned effect of the Directive and thus safeguard the interests of banks rather than borrowers.

It should be recalled that the FSA does not take the side of borrowers in franking credit cases. After all, the KNF, in a case in which the CJEU Ombudsman recently spoke – C 520/21 – argued that the stability of financial markets in Poland and in the EU as a whole would be jeopardised if banks were deprived of the possibility to claim remuneration for non-contractual use of the loan principal. However, the KNF did not convince the CJEU Ombudsman, who held that the bank had no other claims against the borrower, apart from the claim for the return of the contractually issued capital.

The above shows that the problem of franking credits is still unresolved and every now and then new ideas are put forward which are often not favourable to the franking party. It is worth noting that while the pro-consumer interpretation in the European field seems to have already taken shape, in the domestic backyard, the borrower may still be surprised by successive draft laws, such as the one described by the FSA. It should be remembered that also the Supreme Court has not ruled on the bank’s claim for the use of capital.

Another example of the change, after all, is the amendment of the CCP to force borrowers to bring an action against banks only before the court in the district where the borrower resides and not in the district where the bank is based. After all, the change means that some borrowers will not be able to sue in the specialised franking division of the District Court in Warsaw.

The current situation thus shows that in CHF loan matters still not everything is clear and stable, and ideas for a real systemic solution to this problem are lacking.

Author:Mateusz Kołodziejak, advocate