Bank in Canaries rapped by court for 'abusive' mortgage conditions

[fifi]

Bank in Canaries rapped by court for 'abusive' mortgage conditions

The war on banks over their unfair mortgage conditions continues to produce victories for customers, this time in Las Palmas, where judges have ruled that the imposition by a local bank of a so-called 'floor clause' was an abuse of its position.



The court ruled this week that a home-loan contract between the Caja Rural bank and a client in which the lowest interest rate the latter could pay was 5% was "unfair". Judges ordered it to repay the customer over 10,000 euros in excess payments and slammed the bank for not passing on the benefits of the downward trend in interest rates in force at the time the mortgage was taken out in 2010. In a hard-hitting judgement, the court accused Caja Rural of a "lack of transparency" in its floor clause practices, which it said were "obscure" and placed borrowers at a serous disadvantage. The ruling is the latest in a long line of decisions that have gone against banks in the Canaries for inserting minimum rate clauses in loan agreements.





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