It is not the first time that we have talked in our articles about the abuses of banks and the rulings that have been handed down by the Courts in favour of consumers. The “floor clauses“. Mortgage swaps. Revolving cards. Payment of agency or management fees. Bank liability in the event of Phishing. In today’s article we analyse the recent ruling of the Court of Justice of the European Union (CJEU) and if it is possible to claim the arrangement fee of your mortgage. And we explain whether this ruling really opens a new door to massive consumer claims.
What does the so-called Arrangement Fee consist of?
According to the Central Bank of Spain itself, the mortgage arrangement fee involves the administrative procedures carried out by the bank in order to grant the loan. A study of the applicant’s profile (whether he/she is solvent or not). The risks of the operation. The “management” and “processing” expenses, etc.
In general, the arrangement fee varies between 0.5% and 2.0% of the amount of the mortgage. For instance, in a 200,000€ mortgage, the arrangement fee could range from 1,000€ to 4,000€. Although depending on the bank (and the type of mortgage) this amount could be higher or lower.
What was the position of the Spanish Courts regarding the Opening Fee until now?
The arrangement fee has been, for many years, a source of controversy between consumers and banks. Until now, the Spanish Supreme Court (TS) considered that it was not possible to assess whether the arrangement fee was abusive or not. Why? According to the Spanish Supreme Court, the arrangement fee was an “essential element” of the loan contract. And article 4.2 of the European Directive 93/13, does not allow courts to assess on whether an “essential” clause is abusive or not.
Chronology: First ruling of the CJEU and the response from the Spanish Supreme Court.
At the beginning of 2019, two Spanish courts (Mallorca and Ceuta) asked to the European Court if it was possible to claim the arrangement fee for being abusive. On 16 July 2020, the CJEU responded that (despite being included in the total price charged to the consumer for the mortgage) the arrangement fee did not represent an essential part of the main subject matter of the contract. And, therefore, Spanish judges could assess individually whether this fee was abusive or not, having to study it on a case-by-case basis.
Second ruling of the CJEU: the arrangement fee may be abusive and null and void.
Not satisfied with this response (which contradicted the case law favourable to banks that was being applied in Spain at the time), the Supreme Court asked the CJEU for clarification. The response of the CJUE arrived on 16 March 2023, through a ruling that sides with the consumer and leaves no room for doubt. The arrangement fee is not part of the main purpose of the loan contract. It is not an essential clause, but an accessory one. Therefore, national courts (in this case, the Spanish courts) can assess, case by case, whether this fee is abusive or not.
It remains to be seen what the Spanish Supreme Court’s criteria is from now on. But this ruling undoubtedly opens the door for all consumers affected by this commission, to claim the arrangement fee paid in their mortgage, and get their money back.
At White-Baos we are experts in judicial banking law, and we have helped many clients to successfully claim for the so-called floor clauses, etc. Claim now the arrangement fee of your mortgage, for being abusive. Send us your documentation: mortgage loan deed and proof of payment of the arrangement fees and we will study your case. Do not hesitate to contact us to receive expert legal advice in banking and consumer law.
The information provided in this article is not intended as legal advice, but simply conveys information related to legal issues.
Carlos Baos (Lawyer)
White & Baos.
Tel: +34 966 426 185
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