Europe News

EU court overturns Spanish ruling limiting bank charges on mortgage floors

Angel Navarrete | Bloomberg | Getty Images

The European Court of Justice said on Wednesday it had overturned a Spanish court ruling that had capped banks' liabilities for so-called floor clauses in mortgage contracts and asked them to repay customers over the whole life of the loan.

The ruling, announced in a statement, deals a blow to Spanish banks that now have to repay customers beyond what they had lost since May 2013, when Spain's Supreme Court declared these mortgages, whose rates cannot fall below a benchmark, were invalid if they had not been presented clearly.

The new charges could total between 3 billion and 4.5 billion euros ($4.68 billion), according to analysts.

The ruling is final and cannot be appealed.

Shares in Spanish banks fell after the ruling was announced, with Banco Sabadell, down 4.6 percent, leading losses.

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