The CJEU Ruling Fully Validates the Use of the IRPH Index for Determining Interest Rates on Mortgage Loans

The CJEU Ruling Fully Validates the Use of the IRPH Index for Determining Interest Rates on Mortgage Loans

In light of the ruling from the Court of Justice of the European Union (CJEU) announced today, the Spanish Banking Association (AEB) and CECA state that:

  • The CJEU confirms that the publication of the Bank of Spain’s Circular with the calculation formula for the IRPH in the BOE is sufficient for understanding how it works.
  • Moreover, according to the CJEU, compliance with the banking transparency regulations, which banks have adhered to, confirms that the IRPH clause was transparent.
  • Even if a judge might consider that in a specific case the clause was not transparent, the effect would be the substitution of the IRPH cajas (or the IRPH bancos, as applicable) used, with the IRPH entidades, whose value is practically identical.
  • The Supreme Court has already ruled in favor of a similar contractual clause in a judgment dated December 14, 2017.

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