A ruling of the provincial Court of Madrid annuls the IRPH banking
The Provincial Court of Madrid annuls the IRPH of a mortgage loan for abusive following the doctrine that the Supreme Court applies to the floor clauses.
Section 13 of the Provincial Court of Madrid issued a ruling on May 4 (Appeal nº 936/2016) that obligates Bankia to replace the IRPH (Mortgage Loan Reference Index) of a mortgage contract by the euríbor, The latter more favorable than the previous one, and to recalculate the entire loan amount as if from the beginning the Euribor itself had been taken into account instead of the IRPH.
As a consequence, the bank will have to return to the client all the overcharged for this mortgage calculated with the IRPH plus a difference agreed by the parties of 0.5%. This ruling will have important consequences, similar to what happened with the nullity ruling of the floor clauses: the rest of affected people will be able to claim to the bank in the courts to recover its money and the banking institutions will have to provision funds to face these demands and inform the Bank of Spain.
This ruling referred to a loan concluded in 2005 worth 90,000 euros, payable in 30 years in 360 monthly installments. This loan had an initial period to which a fixed interest rate of 3.5% was applied to him later to change to a variable rate to 0.5%. Both types were calculated according to the IRPH, an index elaborated by the Bank of Spain.
But what is the difference between the IRPH and the Euribor? In the first, the Bank of Spain is the institution that calculates it based on the value of loans made by Spanish banks. In the euríbor, the procedure is the same but with the Eurozone banks and is calculated by Reuters and the European Banking Federation. The difference is that the IRPH can be manipulated more easily than the euríbor and, while the latter has been going down in recent years, the IRPH has remained constant.
It is precisely this characteristic that the Provincial Court of Madrid has taken into account to consider it abusive and injurious to the client, since the application of one or another index had very different consequences for the bank and the mortgaged. Thus, the court considers that there is a lack of transparency due to imbalance in the spot and it applies the doctrine of the Supreme Court, annulling the IRPH clause for abusive.
With this ruling, the Provincial Court of Madrid gives reason to the Court of First Instance of Madrid and follows the line drawn by other Provincial Courts such as Álava and Vizcaya.
Bankia has already announced that it will appeal to the Supreme Court but, although this ruling is not yet firm, there is an appeal for cassation and extraordinary appeal for procedural infringement. However, this ruling is a further step in the legal security of consumers because it prevents them from abuses that the bank could commit taking advantage of its most dominant negotiating position.
Claudio Rodríguez Vera (@rvclaudio)
Lawyer at Del Canto Chambers