Hungary's government is waiting for the Curia, the country's supreme court, to take a legal uniformity decision on foreign currency-denominated loans, the Minister of Public Administration and Justice told journalists on Tuesday following a roundtable discussion with representatives of the National Bank of Hungary, the National Judicial Office, the Office of the Commissioner of Fundamental Rights, the Hungarian Bar Association, the Hungarian National Chamber of Notaries and the Chief Prosecutor’s Office.
The Minister said that the bill regarding the amendments to rules of jurisdiction in foreign exchange loan contracts has been submitted to Parliament, and a decision on proposals regarding implementation issues is expected by early December.
He also said that the validity of FX loan contracts, unilateral changes to interest rates – and the decision on who will take the burden of these amendments – and the uniform assessment of exchange rate margins remained fundamental questions.
According to the Minister, the subsequent modification of contracts could only be possible in case of massive harm to the public interest, adding that no amendment of contracts is planned for now.
He noted that today’s consultation was based on the Bank Association’s recommendation, that is, among others, that exchange rates should be controlled by law. This was practically realised by the National Assembly when it recently broadened the scope of eligibility of the exchange rate cap, Mr Navracsics stressed.
Proposals were raised at the meeting to address the problem of foreign currency loans. The National Judiciary Office (OBH), for instance, suggested that instead of the financial institution’s headquarters, which is typically Budapest, the applicant’s place of residency should determine the competent court in order to avoid excessive workload. The OBH also recommended that lawsuits concerning foreign currency loans should begin with compulsory conciliation between the parties.
Other proposals suggested that the Curia should provide guidelines regarding the validity of contracts, unilateral interest rate changes and conversion rates, the Minister said.
(Ministry of Public Administration and Justice)
