Opinion of the European Central Bank of 8 December 2014 on the general terms and conditions of consumer loan contracts (CON/2014/85)
Date: 2014-12-08
Institutions: European Central Bank
Subjects: Hungary, consumer credit, consumer protection, financial stability, foreign currency, national law

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 amended subsequent 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 Article 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  of  the 

Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion. 

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Purpose of the draft law 

1.1  The  Hungarian  Supreme  Court,  in  a  decision  of  June  20143,  outlined  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.  As  a 

result,  the  Hungarian  Parliament  adopted  Law XXXVIII  of  2014  on  measures  to  address  the 

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2  

3  

See amending proposal T/1997/4. 

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). 

Uniform Decision 2/2014 of the Supreme Court of 16 June 2014. 

 
 
 
 
 
                                                 
ECB-PUBLIC 

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  obligations  of  financial  institutions  in  relation  to  consumers  and  the 

information 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  lifetime of 

such a contract, sufficient and detailed information is provided to the consumers; (b) the possibility 

for consumers of terminating contracts for loans without incurring additional costs, in the event that 

the interest rate applicable to their payment 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 the 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  apply  in  the  case  of  loans  with  fixed 

interest rates and for those with variable interest rates. 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 also 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 apply retroactively to existing contracts for loans 

as well as to all future contracts. 

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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.  Moreover,  due  to 

amendments made  to  the  draft  law  between  the  date  of  the  consultation  request  and  the  date  of 

4  

5  
6  
7  

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. 

Published in Magyar Közlöny 137/2014 on 6 October 2014, see Opinion CON/2014/72. 

See Opinion CON/2014/XX (currently under adoption, reference number to be updated). 

Law LXXVIII of 2014, published in Magyar Közlöny 168/2014 on 5 December 2014. 

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adoption, which were not communicated to the ECB, the law as adopted differs substantially from 

the draft law submitted 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 give due 

consideration  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  are  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 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  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 interests of preserving financial stability, it is important to ensure sufficient transparency  so 

that  consumers  are  clear  about  the  nature  of  their  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  

Directive  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). 

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This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 8 December 2014. 

ECB-PUBLIC 

[signed] 

The President of the ECB 

Mario DRAGHI 

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