EN  ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 8 December  2014  
on the general terms and conditions of consumer loan contracts  
(CON/2014/ 85) 
 
Introduction and legal basis  
On 13 November  2014 , the European Central Bank (ECB) received a request from the  Hungarian  
Ministry of the National Economy (hereinafter ‘the consulting authority’ ) for an opinion on a draft law 
laying down  specific rules on the general terms and conditions of consumer loan contracts  (hereinafter 
the ‘draft law’).  
The draft law was a mend ed subse quent to the receipt by the ECB of the request for an opinion1, but the 
ECB was not notified of these  later amendments . The scope of the ECB’s opinion is limited to  the draft 
law as it was submitted by the consulting authority, without the later amendments . Furthermore, the draft 
law was adopted by the Hungarian Parliament on 25 November  2014.  
The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the sixth indent of Artic le 2(1) of Council Decision 98/415/EC2, as 
the draft law relates to rules applicable to financial institutions insofar as they materially influence the 
stability of financial institutions and markets. In accordance with the first sentence of Article 17.5 o f the 
Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.  
 
1 Purpose of the draft law 
1.1 The Hungarian Supreme Court , in a decision of June 20143, outlin ed the basic parameters  of 
certain standard terms  that co uld be prescribed  by Parliament for inclusion in consumer loan 
contracts  entered into by natural persons and  denominated in forint or in foreign currency . As a 
result , the Hungarian Parliament adopted Law  XXXVIII  of 2014  on measures to address  the 
                                                 
1  See amending proposal T/1997/4 . 
2  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisio ns (OJ L 189, 3.7.1998, p. 42).  
3  Uniform D ecision 2/2014 of the Supreme Court of 16 June 2014.  
ECB -PUBLIC  
2 Supreme Court’s decision on consumer loan contracts4, and Law  XL of 2014 on the rules of 
settlement  related to such contracts5. 
1.2 The draft law amends previous Hungarian legislation  on this subject. It contains, inter alia , detailed 
rules as regards  (a) the obli gations of financial institutions  in relation to  consumers and the 
inform ation provided to  them ; the amendment aims  to ensure that sufficient  information is provided 
to consumers prior to entering into a contract  for a loan and to ensure  that, during the l ifetime of 
such a contract , sufficient and detailed information  is provided  to the consumer s; (b) the possibility 
for consumers of terminat ing contracts for loans without incurring additional costs , in the event that 
the interest rate applicable to their p ayment obligations becomes less  favourable during the lifetime  
of the loan agreement ; (c) caps on: (i) the fee payable on the  granting of the  loan, and ( ii) the 
interest rate applicable in the event of late payment by the consumer;  and (d) termination  or early 
repayment of contracts  for loans . 
1.3 Under t he draft law  different rules apply to loans for terms of  less than three  years and to loans for 
terms of more than three  years. Similarly, different rules appl y in the case of  loans with fixed 
interest rate s and for  those with variable interest rate s. Furthermore , the draft law lays down rules  
limiting changes to  the interest rate  and the interest rate premium , as well as  fees and expenses 
payable during the lifetime of a loan agreement . 
1.4 The draft law al so contains provisions regarding foreign currency loans, which should be applied in 
conjunction with the draft law on the conversion of foreign exchange denominated loans6. 
1.5 The draft law provides that the terms and conditions relating to contracts for loans are to be 
amended by all financial institutions providing loans to consumers by 1 February 2015. The terms 
and conditions that apply  under the draft law will appl y retroactively  to existing contracts for loans 
as well as to all future contracts.  
 
2 General observations  
2.1 The appropriate time to consult the ECB  
The draft law was adopted7 by the Hungarian Parliament on 25 November 2014, shortly after the 
ECB was consulted and before the ECB could adopt its opinion. As a consequence, the Parliament 
could not  take the ECB’s views into account before adopting the draft law.  
The consulting authority did not indicate to the ECB that the opinion was urgent  or that  the draft law 
was to be adopted by the Hungarian Parliament  under an urgency procedure . Moreove r, due to 
amendments made to  the draft law between the date  of the consultation request and the date of 
                                                 
4  Published in Magyar Közlöny 98/2014 on 18 July 2014, see Opinion CON/2014/59. All ECB opinions are available on the 
ECB’s website at www.ecb.europa.eu.  
5  Published in Magyar Közlöny  137/2014 on 6 October 2014, see Opinion CON/2014/72.  
6  See Opinion CON/2014/XX (currently under adoption, reference number to be updated).  
7  Law LXXVIII of 2014, published in Magyar Közlöny 168/2014 on 5 December 2014.  
ECB -PUBLIC  
3 adoption , which were not communicated to the ECB, the law  as adopted  differs substantially from 
the draft law  submitted to the ECB.  
The Hungarian author ities have again failed to comply properly with their duty to consult the ECB. 
The adoption of the draft law, as amended, does not relieve the authorities of their duty to give due 
consider ation to  this opinion, in particular with regard to the application  and interpretation of the 
draft law as adopted, as well as any future amendments thereto.  
The ECB would like to emphasise that, even in cases of particular urgency , or where the legislative 
process has reached an advanced stage, the national authorities a re not relieved of their duty to 
consult the ECB . This should occur  at an appropriate stage in the legislative process that allows 
sufficient time for: (a) the ECB to examine the draft legislative provisions and adopt its opinion in all 
required language v ersions; and (b) the national authorities to take into account the ECB’s views in 
accordance with Decision 98/415/EC. The ECB would therefore appreciate it if, in future, the 
consulting authority would honour its obligation to consult the ECB in accordance  with 
Decision  98/415/EC.  
 
3. Specific observations  
3.1 While recognising that Directive 2014/17/EU of the European Parliament and of the Council8 does 
not apply to credit agreements existing before 21 March 2016, the specific observations in this 
opinion are without prejudice to the compliance of the draft law with the requirements set out in  that 
Directive.  
3.2 In the interest s of preserving financial stability, it is important to ensure sufficient transparency so 
that consumers are clear about the nature  of the ir commitments when there is an element of 
flexibility about the terms of a  contract for a  loan during the lifetime of that contract . Therefore , the 
ECB welcomes the fact that , under  the draft law , more information on the pricing of interest rates 
applied by financial institutions  is to be provided in contracts  for loans . Similarly, the ECB is of the 
view that the provisions of the draft law which provide that, in certain specific cases , a contract  for a 
loan cannot be amended to the detriment of the  consumer, will bring about  greater legal certainty 
and will enable consumers to obtain loans with greater caution and increased awareness of the 
financial burden involved . 
                                                 
8  Direc tive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for 
consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation 
(EU) No 1093/2010 (OJ L 60, 28.2 .2014, p. 34).  
ECB -PUBLIC  
4  
This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 8 December  2014.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI