The Government submitted to Parliament on Friday the first bill aimed at helping foreign currency (FX) loan holders by settling certain issues included in contracts signed with the banks, in line with the Curia’s (Supreme Court) recent legal uniformity decision.

According to the explanatory statement to the bill, the proposal seeks to eliminate unfair provisions, but such that the retained contracts can still be fulfilled.

If the bill is passed into law, it will void rate margins, the application of different rates for buying and selling foreign currency, and will ensure that both the forint value of FX loans and instalments are calculated at the central bank’s official rate. The same rule will apply to all fees and extra costs related to the loan.

The new legislation will stipulate that banks are primarily responsible for the removal of unfair terms and conditions from existing agreements.

The law will come into effect eight days following its promulgation, and financial institutions will have a further ninety days to convert the loans and the repayments retroactively. On the basis of this conversion, they will have to settle accounts with loan holders in line with a separate law to be passed during Parliament’s autumn session.

(Ministry of Justice)