European Court issues judgment on WIBOR mortgages, potentially allowing court review of bank contracts for Polish homeowners.
Hopes for Breakthrough in Złoty Loan Cases
The European Court of Justice’s ruling on WIBOR could be a breakthrough for Poland’s mortgage market, potentially enabling “real judicial control” of contracts based on this index, according to consumer rights attorney Karolina Pilawska.
Court Questions Focus on Bank Transparency
Polish courts asked the TSUE whether banks should have explained the method of determining WIBOR, factors affecting its value, and risks of variable rates to consumers. The court suggested inadequate information made it impossible for borrowers to understand their mortgage mechanisms.
Consumer Protection vs. Technical Index Construction
Pilawska called the ruling potentially “one of the most important TSUE judgments concerning Poland in recent years,” testing whether courts will prioritize consumer protection standards over technical index construction when reviewing mortgage contracts.
Transparency Requirements Scrutinized
The second question from Polish courts concerns whether banks had an obligation to provide clear information about WIBOR’s functioning and financial consequences. Pilawska believes mere mention of WIBOR in contracts without explanation may be insufficient.
Potential Market Implications
The final question addresses whether improperly informed WIBOR clauses can be deemed contrary to good faith. Pilawska noted the TSUE may indicate that the focus in such disputes should be on the bank-consumer relationship, not abstract index legality.
Future Changes to Mortgage Index
Poland is transitioning from WIBOR to POLSTR (Polish Short Term Rate), which will be based solely on real interbank transactions. This change began in 2022 as part of broader financial market reforms.
