The negative interest rate – Getin and Pekao in the crosshairs of the OCCP – Banker

Office of Competition and Consumer Protection initiated proceedings
 on suspicion of practices infringing collective interests
 consumers. They concern not used by lenders negative rates
 interest rates for loans frankowych. Similar proceedings are pending against
 four other banks.

 

The Swiss central bank in December last year once
 first adopted the target rate of CHF LIBOR rate at the level of negative. In January
 2015. Again lowered the target and at the same time resigned from rigid defense
 exchange rate against the euro. This resulted in a sharp appreciation of the Swiss franc and was
 the beginning of the subsequent turmoil around the foreign currency loans in Poland.

 
 

From the beginning, banks in different ways interpret the way
 determining installments when the total rate of LIBOR plus a margin will have a value
 negative. Part of the institution, in accordance with the recommendation of the PBA (the so-called. Six-pack)
 temporarily (until the end of the year) takes into account the “negative interest rates” and returns
 borrowers portion of installment of principal. OCCP has pledged to monitor
 the behavior of banks and publishes several months statement including, inter alia this
 issue.

 

Negative interest rates on the bone of contention

 

August 11 office announced that the start procedure
 against Getin Noble Bank SA and Bank Pekao SA Poland which do not
 They take into account the negative LIBOR, when summing up the margin gives it value
 negative. According to the President of the Office such practice may constitute an unfair practice
 market.

 

“In this case, good manners should be identified with a
 compliance with the Bank’s obligation to meet the agreements concluded with consumers
 CHF loan. By placing in these agreements provisions whereby
 CHF loan interest rate is the sum of the value of fixed margin and values
 CHF LIBOR base rate, the Bank has committed to fixing interest rates
 -described manner no matter what values ​​take both of these factors.
 Meanwhile, the Bank does not comply with the agreements established principles in a situation where in a given
 Libor settlement period is negative while the value
 Absolute exceeds the value of the restricted margins. The Bank assumes then that
 value of CHF loan interest rate is zero. This causes adverse effects
 for consumers because it leads to charge an interest rate of
 higher than in the event that the Bank complied with the provisions of the loan agreements
 CHF “reads the decision of the OCCP. “It should be noted that such a practice
 may violate one of the fundamental principles of civil law, according to
 the agreements should be kept ( pacta
 sunt servanda ) “indicated in writing.
 

Banks
 otherwise interpret the law

 

It is worth recalling that the negative interest rate
 Polish Bank Association presents a different point of view, relying on records
 in banking law stating that the loan agreement is a contract for pecuniary interest. President
 OCCP in order not deny this fact, but points out that “the principle of
 payment must refer to the whole of the contract period, and not to individual
 accounting periods in which they are paid a single installment loan. Thus,
 The Bank should take into account when calculating the interest on the loan of CHF
 negative base rate LIBOR also in a situation when the absolute value of this rate
 It is greater than the amount claimed in the margin loan agreement – until the sum
 downloaded so far (ie. the whole current contractual period) interest
 exceeds the value of the interest at the lowest possible height. “

 

OCCP has taken similar steps against four banks. In May
 Targeting the office was BPH and BNP Paribas, and in June mBank and ING
 Bank Slaski. President of the Office may, in accordance with statutory powers, issue
 decision to discontinue a practice which harms the collective interests
 the consumer and the entrepreneur to provide this information to the news
 the public’s expense.

Michael Kisiel