EN   ECB -PUBLIC 
 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 10 October 2014  
on further rules applicable  to specific consumer loan contract s 
(CON/2014/ 72) 
 
Introduction and legal basis  
On 12 September  2014 the European Central Bank (ECB) received a request from the Hungarian 
Ministry of the National Economy for an opinion on a draft law on the rules applicable  to specific  
consumer loan contracts (hereinafter the ‘draft law’).  
The draft law was adopted by the Hungarian Parliament on 24 September  20141 following 
amendment s2. The ECB has adopted its opinion based on the draft  law submitted for consultation.  
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 third and sixth indent s of Artic le 2(1) of Council 
Decision 98/415/EC3, as the draft law relates to the Magyar Nemzeti Bank  (MNB)  and 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 of the Rules of 
Procedure of the European Central Bank, the Governing Council has adopted this opinion.  
 
1 Purpose of the draft law 
1.1 As referred to in Opinion CON/2014/594, the Hungarian Supreme Court delivered a unif orm 
decision5 outlining the basic parameters of certain standard terms  that could be prescribed  by 
Parliament for inclusion in consumer loan contracts  entered into by natural persons and  
denominated in forint or in foreign currency .  
                                                 
1  Law XL of 2014, Published in Magyar Közlöny  No 137/2014.  
2  See amendment s Nos T/1272/4  and T/1272/6, available on the Hungarian Parliament’s website at www.parlament.hu.  
3  Council Decision 98/415/ EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).  
4  Opinion CON/ 2014/59  on new general measures stemming from the Supreme Court’s decision on consumer loan 
contracts. All ECB opinions are available on the ECB’s website at www.ecb.europa.eu.  
5  Uniform Decision 2/2014 of the Supreme Court of  16 June 2014.  See also D ecision 6 /2013 of the Supreme Court of 
16 December 2013 . 
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2 1.2 The Hungarian Parl iament subsequently adopted Law XXXVIII of 2014 on measures to address  
the Supreme Court’s decision on consumer loan contracts6. This legislation regulates loans 
issued  in forint and foreign currency , as well as financial leases , entered into by natural persons . 
Amongst other things, t he legislation : (a) declares that it is illegal for financial institutions to 
profit from exchange rate margins and requires financial institutions to calculate the amounts to 
be repaid to affected  consumers using the official  exchange rate published by the MNB ; and 
(b) states that unilateral amendment of the general terms and conditions of a loan contract or a 
financial  lease fails to satisfy the principles outlined in the Supreme Court’s ruling  and is  
therefore unfair, and thus void , unless proven  otherwise  by a financial institution in court 
proceedings. The adoption of Law XXXVIII of 2014  and the  further detailed rules set out in the 
draft law  are the beginning of a series of  legislative measures aiming to address  the Suprem e 
Court’s decision .  
1.3 The draft law  prescribes the procedure s implementing  the new legal measures  introduced by 
Law XXXVIII of 2014 , including the applicable timelines . The draft law specifies the rules 
applicable to write -offs or repayments, which depe nd on the status of the contract  (i.e. whether 
or not obligations under the contract remain to be performed)  and, in particular  cases, the rules 
for determining the applicable exchange rate and the interest rate. Where the consumer has 
benefited from a discount or reduction of their payment obligations  (e.g. as a result of  the early 
repayment scheme or the exchange rate cap scheme) , the draft law  provides  that a deduction 
will be made by the financial institution  from the write -off or repayment , correspondi ng to  the 
discount or reduction previously granted.  Specific  procedural rules are set out to govern  
adjourned legal proceedings, also  temporarily prohibit ing any unilateral increase in the interest 
rate, costs and fees applicable to consumer loan contracts  until 30 April 2016 . The draft law 
states that the financial institutions will ultimately bear the  costs of implementing  the draft law . 
Further provision is made for  a formal dispute resolution procedure which will be available 
before the  Pénzügyi Békélte tő Testület (F inancial Reconciliation Board) , with support from the 
MNB. Additional tasks are given to the MNB in its supervisory capacity  and the draft law also 
ensures consistency with other relevant legal acts . Finally,  amend ments are made to  certain 
accounting and taxation rules to facilitate the performance of existing  and future payment 
obligations by  the financial institutions under  the new rules . 
1.4 In addition to determining the basic rules of procedure implementing  the new legal measures 
introduc ed by Law XXXVIII of 2014, the draft law authorises the Governor of the MNB to 
adopt a decree prescribing certain relevant  detail s to be provided by financial institutions . This 
include s details on the implementation of the new obligations , the date on whi ch such 
obligations should be performed and, i n certain limited cases , the date of the applicable  
                                                 
6  Magyar Közlöny  98/2014, 18.07. 2014.  
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3 exchange rate to be used, as well as the date on which any financial obligations should be fully 
performed, the content and formal ities involved , and the appl icable rules of publication.  
 
2 General observations  
 The appropriate time to consult the ECB  
The draft law was adopted by Parliament on 24 September  2014, shortly after the ECB was 
consulted, and before the ECB could adopt its opinion. As a consequence, P arliament could not 
take the ECB’s views into account before adopting the draft law . Moreover, t he draft law , as 
adopted, differs substantially from the draft law  on which the ECB has been consulted due to  
the amendment s7 adopted by  Parliament during the l egislative process. This opinion is based on 
the draft law sent for consultation to the ECB .  
The Hungarian authorities 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 
consider  this opinion, in particular with regard  to the application and interpretation of the draft 
law, as adopted , and 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 are not relieved of 
their duty to consult the ECB 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 versions; 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 the 
consulting authority honouri ng its obligation to consult the ECB, in accordance with 
Decision  98/415/EC , in the future.  
 
3. Specific observations  
3.1 The ECB would like to stress  that all observations made in paragraph 3 of 
Opinion CON/2014/59 remain applicable. Of p articular importa nce are the comments made in 
paragraphs 3.3 and 3.4 concerning the potential of the measures to : (a) place significant strain 
on the banking sector, potentially adversely affecti ng the stability of the Hungarian financial 
sector as a whole and the situation of individual financial institutions ; and (b) creat e cross-
border spill -over effects on banking groups’ profits and capital position s, possibly  result ing in 
adverse spill -over effects on the economy . These paragraphs in Opinion CON/2014/59 also 
comment on the need for a meaningful dialogue between the Hungarian authorities and all 
relevant stakeholders, as well as the need for due consideration of the interests of the general 
                                                 
7  See amendments Nos  T/1272/4 and T/1272/6.  
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4 public, including financial institutions and borrowers, as well as the  interests of the  authorities 
responsible for ensuring the stability of the financial system in Hungary.  
3.2 On the issue of  financial stability, the ECB welcomes the fact that the draft law empower s the 
Governor of  the MNB to require  certain relevant details  relating to the new legal measures  
introduced by Law XXXVIII of 2014, since the MNB is both the national competent authority 
responsible for micro -prudential supervision and the macro -prudential supervisory authority in 
Hungary . The MNB  is best placed to assess the terms and conditions  of loan contracts  entered 
into by consumers and the impact of the new legal measures on financial institutions . Within the 
scope of its tasks, t he MNB can  contribute to the prevention and mitigation of systemic risks to 
financial stability.  As regards the legislative powers proposed to be granted to the Governor  of 
the MNB under the draft law, which are more than technical in nature, the ECB expects to be 
consulted in a timely manner on any draft legislative provisions proposed by the Governor  
within the ECB’s scope of competence in accordance with Decision 98/415/EC.  
3.3 In view  of the high proportion of financial institutions  owned by foreign banking groups 
operating in the Hungarian banking sector , and in order to prevent contagi on and threat s to 
financial stability within the European Union, the MNB should also inform  the ECB, the  
European Systemic Risk Board and other  relevant stakeholders  of any proposed  implementing 
measures in the future . 
3.4 In addition to its new supervisor y tasks  involving the verif ication  of compliance with the new 
legal measures applicable to consumer loan contracts, t he MNB will be tasked with the 
mediation of complaints  and the initiation of legal proceedings in the  public interest . In line 
with the principle of central bank independence, the MNB should be able to carry out these new 
tasks while having sufficient financial resources to carry out its tasks within the European 
System of Central Banks (ESCB) . The principle of financial independence requires  that a 
national central bank  has sufficient financial resources to perform both its ESCB  and national 
tasks, which in this case includes the  new  tasks given  to the MNB.  
 
This opinion will be published on the ECB’s website.  
  
Done at Frankfurt am Main, 10 October 2014.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI