Borrowers in Francs Whose Bank Has Terminated Their Loan Have the Right to Convert That Loan

The Franak Association received an opinion from a borrower from the Ministry of Finance based on the provisions of the amendments to the Consumer Credit Act regulating the conversion of CHF loans to euros, which clearly and unequivocally grants that borrower with a terminated loan agreement the right to pursue the conversion of CHF loans.

The Franak Association announced on Tuesday that citizens who are borrowers of loans in švicarskim francima (CHF) whose bank has terminated the loan, and who have not yet repaid their debts, have the right to convert those loans.

The Franak Association states that it received an opinion from a borrower from the Ministry of Finance based on the provisions of the amendments to the Consumer Credit Act (ZIDZPK) regulating the conversion of CHF loans to euros, which clearly and unequivocally grants that borrower with a terminated loan agreement the right to pursue the conversion of CHF loans.

Franak notes that RBA, OTP, and Sberbank, as well as some insurance companies, have so far refused to apply the conversion provisions to borrowers whose loans have been terminated but whose debts have not yet been repaid, justifying that the conversion in those loans was executed in kuna on the day of the termination of the loan agreement. Several borrowers have filed complaints and sought the opinion of the Ministry of Finance on this issue, Franak emphasizes.

In a statement, they provide the response from the Ministry of Finance to one of the borrowers, stating that the conversion of the remaining debt into kuna after the termination of the loan agreement is not considered a conversion in terms of the provisions of ZIDZPK, that a borrower whose loan has been terminated and whose obligations have not been fulfilled has the right to conversion, and that this also applies to loans that have been assigned to a third party, e.g., an insurance company.

The Franak Association announces that it will prepare templates for misdemeanor charges against banks that do not recognize the right to conversion for borrowers with terminated loans and unfulfilled obligations. It notes that penalties of 80,000 to 200,000 kuna are foreseen for banks and 10,000 to 50,000 kuna for the presidents and members of the Management Boards of banks for this offense.