The provision of Article 20.4 LCCC cannot be extrapolated to the rest of the interest rate, as this assumption has nothing to do with the free interest rate that companies can apply in the credit agreements they sign with their customers. In order for entrepreneurs and professional members to benefit from protection against non-individually negotiated clauses that give rise to unfair interests in default, it is of course necessary: . The Chamber considers that the increase of two percentage points provided for in Article 576 of the Code of Civil Procedure for the determination of default interest is the most appropriate legal criterion for determining the default interest on personal loans concluded with consumers, which does not mean that the consumer who does not comply with his obligations: a high level of compensation is imposed. Thanks to stS 265/2015, in which the Supreme Court concluded that when personal loans went to consumers, any interest greater than 2 points compared to the interest rate earned was abusive. It became clear to the Supreme Court that this limit for determining the abuse of default interest was temporary, since there was no legal one. Notwithstanding the case law of the CJEU set out above, the abusive nature of remuneration and default interest cannot be agreed in a general and automatic manner. In September 2012, the preliminary ruling was issued before the Commercial Court No. 3 of Barcelona and followed before the CJEU the number of Case C-415/11[9], in which Judge D. Jose Maria Fernandez Seijó criticises, in particular, the limitation of the possibilities of opposition in mortgage proceedings as regards the fixing of default interest not only on overdue payments but on all payments due at an early due date for a preliminary ruling until the Court of Luxembourg has ruled on the question referred for a preliminary ruling by the Spanish court. Article 1 of that law provides that any loan agreement which provides for an interest rate significantly higher than the normal interest rate on money and manifestly disproportionate to the circumstances of the case or null and void under such conditions resulting from leonin, with reason to believe that it has been accepted by the borrower because of his onerous situation. their inexperience or limited mental abilities. In 2020, the legal interest on money is 3%, and it is expected to remain so in 2021.

In addition, as regards mortgages for the acquisition of a habitual residence relating to the same dwelling, Article 114(3) of the LH prevents default interest from exceeding three times the statutory interest on the money and from accumulating only on the amount of outstanding principal. The problem with Article 114(3) is that it limits its scope to loans and credits for the acquisition of a habitual residence itself, provided that it serves as a mortgage guarantee, and it should be recalled that the provisions of that Article cannot be applied to cases which it does not provide for or which are interpreted: which goes beyond the terms in which it is formulated. It should also be noted that this is an assessed clause that has not been individually negotiated and is therefore subject to unfair content control. In carrying out this review, the doctrine of the CJEU is taken into account, according to which that of Article 114.3 LH cannot serve as a parameter for determining the absence of abuse of a term. It considers that it is appropriate to extend the criterion of default interest on personal loans provided for in judgment 265/2015 of 22 April to default interest on mortgage loans and therefore sets the limit of abuse at two points above the agreed deductive interest rate. For this reason, he declares the injustice of the clause, which sets default interest on the mortgage at 19%. The plenary session of the First Chamber of the Supreme Court examines as in the previous orders (sentence 470/2015 of 7 September; 469/2015 of 8 September 2015, rec. 1687/2013), that the consequence of the declaration of unfairness of the aforementioned clause is its complete elimination, without this implying the elimination of the interest-bearing interest, the duration of which was not affected by an abuse and continued to perform the function of remunerating the disposition of the money by the borrower until his return.

It therefore concludes that the payment of interest must be made in accordance with the agreed interest on remuneration in force at the time of the provision. In its judgment of 22 April 2015 (ECR 2351/2012) on this issue in the case of personal loans to consumers, taking the view that, in the absence of a legal limit on default interest on those types of credit, the undisputed term setting default interest which presupposes an increase of more than two percentage points in relation to the agreed interest on remuneration must be regarded as unfair. The annulment of default interest is, in turn, based on its abusive nature. Spanish and European judges have already expressed this view. When analysing the legislation applicable to interest, it is necessary to take into account the following: the classification of interest for the purposes of usury in the legal sense cannot be based on the percentage of the provision on the principal, but depends on the circumstances in which the money market evolves. The courts have too often approved these clauses because of a misunderstanding of the principle of freedom of alliance, because it is less problematic to agree with those in power, or because the humane and just application of legal norms requires overwork. Fortunately, the consumer and user landscape has changed a lot thanks to pressure from European directives and the Court of Justice of the European Union. However, the courts are often too automatic in denying entrepreneurs and professionals the protection granted to consumers and users, making this distinction a dogma, a formal and rigid category that is exaggerated even when reading the legal texts and informative principles of our legal system (just look at the justification of the LCGC, the CEA, the CHA or section 9 of the Act against Late Payment in Commercial Transactions, in addition to various provisions of the CC: 7, 1103, 1154, 1258). 6. Legislation on remuneration and default interest in consumer credit agreements In this case, the Supreme Court declared abusive default interest of 21.8 per cent and replaced it with rates of pay of 11.8 per cent.

At the beginning of the proceedings, the court order sending the enforcement gave a cautious prognosis of the interest and costs that will be incurred during the execution. For these purposes, the law considers that the amount of 30% of the capital claimed is sufficient. Thus, if €20,000 is claimed, the cost and interest forecast is €6,000. But once the main debt is recovered, the cost and interest can be € 16,000: € 5,000 for fees (lawyers are lucky if you can collect a rate in fees!) and € 11,000 for interest if default interest was 29% and the repayment of the loan is made in 2.5 years. As a result, the bill increases from the originally planned 30% to 80%, mainly due to interest. The Supreme Court radically changed the situation when stS 265/2015 stated that in the case of personal loans to consumers, any interest above the interest rate by more than 2 points should be considered abusive. Although he said he set that maximum in the absence of a legal limit, he eventually applied it to consumer mortgages. The reason for this was that the decision of the ECJ of 11 June 2015 (Case C-602/13) considered that the limitation of Article 114.3 LH did not preclude the review of the unfairness of those terms, since it was not a rule specifically addressed to consumers. Despite the inaccuracy of this argument (recall that 114.3 applied to loans “for the acquisition of a habitual residence”, i.e. a consumer activity), STS 364/2016 of 3.

June (discussed here) applied the same limit to mortgages because they did not “find reasons to part with the test adopted in judgment 265/2015”. If, in my view, the judgments do not take account of Article 1(2) of Directive 93/13 and it is doubtful whether it is for the Oberster Gerichtshof to set a limit in general, I understand that it was right to set the same limit for mortgages as for personal loans. However, it is not the same to pay interest on a loan received as to pay it as a penalty for non-payment of a debt within the agreed period. Then he explains what they are and how they differ between wage interest and default interest.