Regarding the foreign currency loan lawsuits the Hungarian Constitutional Court decided that the controversial provisions of Act XXXVIII of 2014 are constituted constitutional. The so-called Foreign currency loan Act (hereinafter called as the Act) declared the use of different exchange rates invalid and obliged the financial institutions to apply the official exchange rate of the Hungarian National Bank (MNB). Furthermore, according to the former Act the unilateral modification clauses of interest, costs and fees of foreign currency loans are presumed unfair. Nevertheless, the above Act enables the financial institutions to prove that their applied former clauses constituted as fair by initiating a civil law lawsuit.
Three judges initiated the constitutional assessment of the above provisions of the Act at the Capital Municipal Court on first instance. The Constitutional Court assessed primarily whether the provisions of the Act are in compliance with the prohibition of ex tunc legislation, and whether the strict judicial procedural regulations are in compliance with the requirement of fair procedure.
Regarding the requirement of fair procedure the Constitutional Court ruled that the matter of the foreign currency and national currency loans is not merely the debtors’ problem but it is considered as a national economic problem affecting the whole society. As a result, it cannot be resolved by the general means of judicial procedure. The 30-day-deadline ensured for the initiation of a lawsuit for the financial institutions is not constituted as an unnecessary or inproportional constraint of one’s constitutional rights. According to the Constitutional Court it was sufficient for the financial institutions to weigh their options and to draw a conclusion whether they were willing to prove the fairness of their applied clauses. Moreover, it was sufficient as the financial institutions could have used all arguments and evidence that were applied in their former judicial procedures. Other applicable, relatively short deadlines are not ruled as impossible to meet or that would rule out a well-grounded decision making.
Regarding the prohibition of ex tunc legislation, the Constitutional Court ruled that the Act did not constitute new substantive law regulations ex tunc. It just simply made the – under the concerned time period - effective and applicable substantive law’s interpretation of the European and Hungarian judicial practice’s legal.
Considering the above mentioned arguments, the Constitutional Court has rejected the judicial motions in their entirety.
The Constitutional Court has not assessed the constitutional ground of the risk of the exchange rate, or the use of foreign currencies. As the other motions filed on second instance, in case of four banks, were not assessed by this present resolution, neither the occurred constitutional complaints. The other four motions are under assessment by the Constitutional Court and it will soon publish its ruling on them.