Did Slovenian banks in the case of loans in Swiss francs act unconstitutionally?
The authors of the legal opinion, Dr. Boštjan M. Zupančič and Dr. Ciril Ribičič, take the position that Swiss franc-denominated loans approved by the banks were “toxic”, leaving borrowers disproportionally or entirely exposed. Namely, the banks had supposedly been warned beforehand by the Bank of Slovenia that the burden of the loans would be disproportionate for borrowers. Despite that, the banks pressed ahead and approved the loans and, in the authors’ opinion, intentionally mislead customers on the benefits of the loans. The banks’ promotional material included slogans such as “Tying your loan to the Swiss franc ensures that monthly instalments will not increase significantly” and “Lean on a stable currency”. The authors emphasize that borrowers did not and could not have predicted the drastic increase in the principal and interest of their loan due to the change in currency parity between the Swiss franc and the Euro, whereas the banks knew this and chose to mislead customers intentionally.
The legal opinion contends that the conduct of the banks was unacceptable from a moral, civil-law, criminal-law and constitutional-law standpoint. The opinion also addresses the issue of unjustified enrichment on the part of the banks and the criminal-law matter of management liability for fraud.
The legal opinion makes reference to the jurisprudence of Western-European countries, which have already condemned the practice (including criminal convictions against the developers of such financial products in France), and to the jurisprudence of the Croatian Constitutional Court which recently confirmed a Croatian law designed to improve the position of Croatian borrowers.
The authors of the legal opinion are convinced that the next step for Slovenian Swiss-franc borrowers is a constitutional review before Slovenia’s Constitutional Court. If the Constitutional Court does not rule in the borrowers’ favour i.e. rule that the transactions need to be annulled, the next step would be to bring lawsuits before the European Court of Human Rights. In this instance, the State (and subsequently taxpayers) will bear ultimate liability for the banks’ actions.
