A Judge has admitted the case brought by the Association of Bank and Financial Services Service Users against 45 banks which impose a “floor” on mortgage interest rates.
The case will be heard in the late spring and the Judge has allowed a period until the end of March for other claimants to adhere to the legal action.
The banks are BBVA, Pastor, Sabadell, Popular, Guipuzcoano (Galicia,Gallego and Vascona). The Credit Banks (Cajas) include La Caixa, Caixa Galicia, Caja Castilla La Mancha, Caja Círculo and La Kutxa.
The action brought by the Association representing mortgage holders claims 45 banks and financial services “abuse” customers by setting a floor for mortgage interest rates. This means if your mortgage is due for revision downwards, because the Euribor has fallen, some banks fail to pass on the reduction if the general interest (Euribor) rate falls below a certain amount. These minimums are usually fixed around 3.5%, 4% or 5% and the Association claims in 2010 alone between 3,500 and 7,000 million euros were “fraudulently” collected from customers.
The Association claims the Ministry of Economy considers a floor on mortgage interest rates as “gravely unjust” and that “these abuses can no longer be tolerated.”
If the action succeeds this practice will stop immediately and the lenders cited in the action will probably be required to pay compensation.
The name of the Association in Spanish is Asociación de Usuarios de Bancos, Cajas y Seguros (Adicae). The Association website is www.adicae.net. Look for the section called “clausula suelo” for information on how to become a party to this case and for a full list of the banks and services cited in the action.
