12/21/2016, 10:38 AM (Source: TeleTrader)
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Spanish banks slide on EU court mortgage ruling

The Court of Justice of the European Union announced in a statement on Wednesday it has ruled that Spanish banks are to repay customers who concluded mortgage loan agreements before 2013 after they were given “unfair” contracts.

In 2013, the Spanish Supreme Court had already said that banks hadn’t informed their customers properly on the “floor clauses” causing borrowers to pay higher interest on mortgages. The “floor clauses” were thus ruled illegal, but the court only applied the ruling to future contracts, with the consumers before 2013 remaining affected by the mortgage contracts.

“The effect of that temporal limitation is an incomplete and insufficient protection that cannot constitute an adequate or effective means of preventing the use of unfair terms, as required by the directive,” the Court of Justice of the European Union stated.

Spanish banks plummeted following the news with Banco Popular Espanol plunging 7.31% at 10:16 a.m. CET, Caixabank sinking 5.68% at 10:13 a.m. CET and Banco de Sabadell sliding 5.40% at 10:17 a.m. CET.

Baha Breaking News (BBN) / NP