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The ECJ on the repayment of a loan agreement prematurely
In a significant decision, the ECJ addressed the premature repayment of a consumer loan. According to the ECJ consumers have a right to reduce all costs of a loan agreement if they repay the loan before the initially agreed time period. Among these costs are also administrative fees or commissions, which are paid initially regardless of the time period of the loan agreement. Relevant Austrian laws (Law on consumer loans, Mortgage and Real Estate Loan Act) will therefore be amended due to this decision (ECJ C 383/18 dated 11.09.2019).
17. July 2020
ESMA issues clarification on disclosure of non-monetary benefits
The European Securities and Markets Authority (ESMA) recently updated its Questions and Answers on the MiFID II-Directive. MiFID II was implemented in the Securities Market Supervision Act (Wertpapieraufsichtsgesetz). ESMA clarifies that investment firms need to disclose to their investors any non-monetary benefit they receive from third parties also for rendered services other than portfolio management and independent investment advice.
19. June 2020
COVID 19-subsidies
The Austrian government has decided on various subsidies to support companies that were affected economically as a result of the COVID19 crisis. Some of these subsidies consist of interest free tax reliefs and social security contribution reliefs, guarantees for loans, short-term-work (Kurzarbeit) and direct aid in the form of grants (Zuschüsse). These subsidies can still be applied. TAIYO Legal will gladly assist you to identify applicable subsidies for you and file the necessary applications.
12. June 2020
One less potential way to “negative interest”
A borrower sued a bank for interest. Due to negative reference rates, the interest rate for the loan became negative. The Supreme Court in Civil Matters ruled that the bank does not need to pay interest to the borrower. Even where a rule of doubt regarding the interpretation of the loan agreement to the detriment of the bank (and to the benefit of the borrower) applies, the bank would not have to pay “negative interests”. Nevertheless, the Supreme Court in Civil Matters does not rule out the payment of negative interests for certain “atypical” contracts (OGH dated 26.02.2020, 1 Ob 16/20i).
22. May 2020
The ECJ on the right of withdrawal from a loan agreement for consumers
In a recent decision, the ECJ addressed the question of the right of withdrawal from a loan agreements for consumers. Companies have to provide certain information in the case of loan agreements for customers. If in these statements, reference is made to a law, which refers to yet another law, it’s classified as a series of national provisions (“Kaskadenverweis”). This is declared inadmissible by the ECJ in the case of information on the right of withdrawal from a loan. Consumers could neither identify the scope of the contractual obligation nor verify whether the contract contains all the necessary information. Consumers can also not verify whether the withdrawal period has already commenced. (ECJ C-66/19 dated 26.03.2020). Note: The German BGH declared a series of national provisions for loan agreements for consumers and real estate loans to be permissible.
8. May 2020