What changes theGFIC ruling for a mortgage loan agreement in USD??

The judgment of the Good Finance Investment Corporation (GFIC), concerning the so-called franc loans, is a ruling that thousands of Poles have been waiting for for years, who have taken out loans in francs in the past.

The landmark case of the Good Finance family ignited the hope that there is a chance to free yourself from the burden of paying off horrendous loan installments. What really changes the judgment of the GFIC in the case of Francis? We answer!

At the end of last year, the GFIC decided that the general provisions of Polish civil law could not become an alternative to unfair contractual provisions regarding exchange rate differences in foreign currency-indexed loan contracts.

According to the Court, the annulment of contracts for loans in Swiss francs is in accordance with European Union law.

The judgment of the GFIC on franc contracts is of great significance for persons who continue to pay back their former mortgage in Swiss francs. However, it turns out that everyone must fight for their own.

What is the EU Court of Justice (GFIC)?


The GFIC is the Good Finance Investment Corporation, which is an independent judicial body and whose rulings affect all countries belonging to the European Union.

The Court has a strong position among all European institutions and Member States. It consists of 28 judges elected by the Member States.

The most important function is to issue the ECJ judgments, which must take into account each country ó al COMMUNITY. EU member states must also exercise the law enacted by the GFIC.

Judgment of the GFIC on mortgage loans in francs


The judgment of the GFIC is relevant for any contract containing inadmissible provisions. In a nutshell, the T- judgment issued a ruling that clauses that are not permitted in franc loan contracts should be removed from the contract, and that the only appropriate criterion for assessing their illegality is the borrower’s interest .

European Union law does not preclude such agreements from being annulled. It is worth emphasizing at this point that Polish law does not allow removed clauses not allowed in denominated loans to be replaced by regulations that, unlike those deleted are legal.

The relatively recent judgment of the GFIC in the franchise case gives borrowers the opportunity to fight for their interests. According to this, they have two options: to communicate with the bank or bring an appropriate court action.

Content of the judgment of the GFIC in the case of francs


By the judgment of the Tribunal “in foreign currency indexed loan contracts concluded in Poland, unfair contract terms regarding exchange rate differences cannot be replaced by general provisions of Polish civil law” . This means, as has already been mentioned, that these records must be deleted.

Moreover, the GFIC ruled that if “after the removal of unfair terms, the nature and main subject of these agreements may change to the extent that they would no longer be indexed to a foreign currency while being subject to an interest rate based on the rate applicable to that currency, Union law does not preclude the annulment of these agreements . “The removal of unauthorized entries is therefore in accordance with EU law.

What exactly does the GFIC judgment mean for people with franc loans?


Unfortunately, the ruling of the GFIC did not definitively solve the problem of franc loans in Poland – it is, however, a kind of light in the tunnel, which gives franchises hope to improve their unenviable situation.

The judgment is also an important indication for the Polish courts as to how they should proceed in resolving the dispute about between Good Finance and the courts.

If the owner of the loan in francs has illegal clauses in the contract, the court is obliged to investigate the case and remove the unfair entries. At the same time, it cannot fill in the gap thus created.

When it turns out that trimming the contract will change its nature, it will be a solid basis for its annulment. However, it all depends on the specific contract and its provisions.

The final resort, i.e. the annulment of the contract, entails the need to settle the parties. The borrower must repay the loan he has received from the bank, while the bank must reimburse the borrower with the interest and commission he has paid during the term of the contract. In both cases, the account should be taken of the limitation period for claims.

Does the GFIC judgment apply to already repaid franc mortgages?


Borrowers are also wondering what the issue looks like: repaid franc loan and the judgment of the GFIC. Many have repaid their last installment for a flat loan some time ago.

The answer is simple – the judgment applies to any person who has a contract that was and could be considered a contract with unlawful clauses . In practice, it is the case that if the contract was invalid, it does not matter whether it has already been performed or not.

There is no provision that would specify the rules of conduct for contracts already carried out. By law, therefore, even a contract may be annulled and this annulment has retroactive effect from the beginning of its duration.

I have a franc mortgage – what should I do after the decision of the GFIC?


The first step should be to determine if the loan agreement contains these illegal clauses. Therefore, it is necessary to carefully analyze the content of the contract.

In addition, you must review documents such as insurance policies concluded on the occasion of the loan agreement, regulations for the loan agreement, repayment schedule or statement of installments and interest, which will allow you to estimate the amounts that could be refundable.

To this end, appropriate declarations should be submitted to the bank for the issue of these documents. The borrower has the right to lodge a complaint with the bank regarding the abovementioned illegality of indexation clauses.

However, if this action does not lead to a settlement with the bank, the Financial Ombudsman will prepare an opinion containing a legal assessment of the facts in the said proceedings. The complaint may, however, prove ineffective, and then the only reasonable option will be to bring the case to court.

Theoretically, the landmark court verdict in the franchise case changed little in practice – consumers in a dispute with banks still need to demonstrate that the loan agreement is non-compliant and invalid. However, it seems that the path related to the request for the invalidity of the contract after the decision of the GFIC is a bit more open than before.

I have a loan in francs – how to enforce my rights?


The judgment of the GFIC will not automatically change all contracts, so it is best to start acting in your interest right now.

Due to the fact that changes to the terms of the contract can only be obtained in court, it is worth first to choose a good representative and complete the necessary documents. At the same time, you need to be prepared that it may take time to calculate the economic impact of certain decisions.

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