José Miguel Barjola.- «Economic activity requires, above all, legal certainty [...]. But certain Supreme Court rulings have created legal instability, rather than legal certainty, on the issue of usury," said Ignacio Pla, secretary general of the National Association of Financial Credit Establishments (ASNEF). "We are convinced that financial education is a necessary step and a pending assignment, which would help the consumer to make a conscious decision, because, moreover, consumer credit is not a complex financial product," said the expert, at the second meeting organized between the ASNEF and Wolters Kluwer (see the full video of the day at this link) within the framework of a cycle of conferences to talk about transparency and financial education.
The "surprising turn" of the First Chamber of the Supreme Court represents "a step towards legal insecurity", because it tries to "apply a suit from 1908 to financial products of the 25st century", highlighted during his speech Francisco Javier Orduña, Professor of Law Civil from the University of Valencia and former magistrate of the First Chamber of the Supreme Court. The Supreme Court issued important rulings on revolving credits on November 2015, 4 and March 2020, XNUMX. (unanimously) of the experts who participated in the meeting, a strong legal uncertainty and a lot of judicial disparity. In the eyes of the jurists, the Chamber developed concepts that were too vague when it came to establishing a harmonized doctrine for the rest of the courts on what usury is.
For Orduña, the Azcárate Law, which has been in force for more than a hundred years, is an anachronistic and imprecise tool to define the legality of something as current as a revolving credit. Much more if it is done based on such open legal concepts. It will generate a "great insecurity", where it translates into an amplification of the disparity of judicial criteria. Notions such as "interest notably higher than normal money", a criterion that the Supreme Court created in 2020, is tremendously ambiguous. They create doubts, confusion, possibilities of interpretation. In conclusion: more lawsuits.
But far from popular belief and bad press, for Francisco Javier Orduña the revolving credits of his financial products are "perfectly stable and consolidated." The advantages of it, because we offer a fast, easy and flexible line of credit. "They have the function of obtaining an immediate settlement, which is a very useful instrument for society in today's economy," he explained. Of course, in his opinion, it is essential "that they be marketed through the appropriate channels." The role of financial education, as Ignacio Pla had highlighted, is key. "Here I catch you and here I kill you is useless […] The person who sells these products must have specific training and know what he sells," Orduña emphasized. The expert planted it as a matter of empathy: putting himself in the client's shoes and asking himself: "If I had that information, would I have hired?".
In all cases, the possible delimitation of the concept of usury must be done at the legislative level. Never in a judicial layer, much less in these terms. In the opinion of the former magistrate, the reasonable range will be the one that always allows "banking competition."
Transparency
"Without transparency and without legal certainty, a market cannot function well," Ignacio Redondo, executive director of Caixabank's legal advisory department and state attorney in excess, immediately stressed. In his speech, he highlighted that he has made great progress in terms of transparency in the financial system. Banking entities are becoming more aware of the mission of providing more information to customers, Redondo testified. The regulations require this: banks must be clear when informing about products "that the client cannot know perfectly".
However, in terms of legal certainty, instead "little progress has been made." The limitation of rates by judicial means, agreed with Orduña, is a problem. In his opinion, this path can create tensions in the market and limit the actions of entities, and above all, enormous insecurity. It is logical that there is a minimum regulation, he admitted, but at least that it is guaranteed and harmonized. "What makes sense is that it be regulated at a European level", he explained, since "the market cannot be dependent on legislative nationalisms or judicial localisms".
For his part, Jesús Sánchez, dean of the Barcelona Bar Association (ICAB) and practicing lawyer, defined the panorama of “judicial mosaic”. It may have seemed that the 2020 ruling of the First Chamber of the Supreme was being misinterpreted by the courts and giving rise to great disparities. He acknowledges that the resolution "does not help legal certainty." “It cost very little to have established clear parameters,” he explained. Leaving aside definitions that are few precise and open to interpretation and establishing a bracket would have been a solution. Beyond definition such as "a difference of that magnitude" or "a difference so appreciable", terms that cause a whole torrent of lawsuits.
The result of using this type of definition, Sánchez lamented, is "a completely contradictory judicial casuistry." For example, while in the courts of Cantabria interest exceeding 10 percent is accepted as significantly higher, in Badajoz 15 percent is allowed. In Oviedo, on the other hand, there is another criterion. "You are a true bazaar, let's see who gives more," he remarked.
In countries like France, there is still a 30 percent cap. Something acceptable, in Sánchez's opinion. In Spain there is no embargo without regulation. The current doctrine needs "a clarification", demanded the lawyer: "either the First Chamber of the Supreme Court fixes the situation or the legislator has the obligation to act", he sentenced. The tsunami of demands increases and with it the disparity of criteria. Sánchez assured that in some cases “they are even suing for interest below the average rate”, because there is a general opinion that everything that exceeds 20 percent is usurious. But the dean of the ICAB warned that this is not true. “It is something that the Supreme Court has never said,” he cuts off.
You can access the full capture of the day at this link.
