Usury: Five criteria Supreme Court
The Supreme Court has scheduled the main criteria for applying the Law of Repression of Usury in a ruling dated 25 November 2015, in cases of consumer credit.
It should be stressed that this is a Judgment del Pleno thus constituting directly jurisprudence.
D. Matthew concluded in the year 2001 a 'revolving personal loan "with Sygma Bank. This loan allowed him to make provisions to limit 500.000 pesetas (3.005’06 euros). This limit could be modified by the Bank. The remunerative interest rate was 24.6% APR and default interest, the resulting increase above with 4'5 points.
The Mister. Mateo, He began to provide credit and soon exceeded the limit initially set. Each month, he carried a fee, with interest, an insurance premium, arrangement and issue commissions and card maintenance.
In 2009, customers began to return unpaid installments.
In July 2011 the Bank filed suit against D. Matthew claim 12.269 euros, amount which comprised the principal balance and interest on late payments.
The Court of First Instance upheld the claim of the Bank and he condemned the customer to pay 12.269 euros plus interest and costs.
The customer appealed to the Provincial Court, which dismissed the appeal and upheld the judgment of the first instance.
In both instances, the usurious nature of the operation was rejected because the remunerative interest was just over double the normal average interest rate on consumer operations, when the contract was concluded. Rejected also consider abusive interest shall not imply that an excessive increase over the agreed interest remunerative.
So D. Mateo, filed appeal to the Supreme Court, alleging infringement of Article 1 of la Act 23 July 1908 Repression of Usury: The remunerative interest exceeded twice the average interest rate on consumer credit and more than four times the legal interest rate.
1.-The Supreme Court held that the law must be adapted to the social and economic circumstances.
Although in principle the remunerative interest can not be controlled as "abusive" as an essential element of the contract (whenever the transparency requirement is met), should be applied Law Enforcement of Usury.
2.- It is enough to incur the concept of "usury" interest that is significantly higher than normal money and manifestly disproportionate to the circumstances.
The High Court does not consider necessary the presence of the circumstances expressed in the second part of the article 1 Enforcement of the Law of Usury, consisting there "Reason to believe that it has been accepted by the borrower because of their plight, their inexperience or their limited mental faculties ".
3.-Usury should determine the APR.
Another important point, It is to determine if the interest is significantly higher than normal money and whether or not usury, se debe tener en cuenta la tasa anual equivalente (TAE) and not the nominal.
4.-The reference of the standard rate of money the BDE.
This concept, not for the legal interest but interest “normal o habitual, in concurrence with the circumstances and the freedom existing in the art " (STS 869/2001 of 2 October). The average interest rate for similar loans is a obrante data in the Bank of Spain. You can see the data on the website of the Bank of Spain.
The High Court considered that live through (albeit poorly) twice the average interest rate on consumer loans, on the date on which it was made, It is qualified as "Noticeably higher than normal money".
5.- The uniqueness must be tested by the Bank.
As to the requirement of being "Manifestly disproportionate to the circumstances", the Chamber indicates that "Normality does not require special test while it is the uniqueness that needs to be alleged and proven", and in this case, no exceptional circumstances relating to the nature of consumer credit and the Bank has not proved that the same, they could justify a significantly higher interest than normal.
Finally the Board gives a "slap" to the bank, indicating:
"Irresponsible consumer lending at interest rates much higher than normal to facilitate the indebtedness of consumers and results in those who regularly meet their obligations have to bear the consequences of the high level of defaults, It can not be protected by law ".
The usurious loan is declared, which entails its invalidity and the consequences of applying Law Enforcement of Usury, namely, It must deliver only the principal received. Because the client paid a sum greater than the loan principal, and you will not pay anything and demand is completely dismissed.