Table of Contents:
1. What questions have been submitted to the Supreme Court?
2. How should the one-year deadline from contract execution be calculated?
3. Could lenders charge interest on financed costs?
4. Does an error in the APR and total amount due, caused by the prohibition of financing costs, justify applying SKD?
What Questions Have Been Submitted to the Supreme Court?
On January 22, 2025, the following legal questions were submitted to the Supreme Court:
1. When does the right to submit a written declaration for the Free Loan Sanction (SKD) expire?
Does the one-year period, as per Article 45(5) of the Consumer Credit Act of May 12, 2011, start from the date the lender fulfills the contract, or from the date both parties (lender and borrower) fulfill their obligations?
2. Is it permissible under the Consumer Credit Act to apply capital interest to the portion of the loan used to cover fees and non-interest costs?
Can interest be charged not only on the amount disbursed to the borrower but also on the amount allocated for paying loan-related fees?
3. If the Annual Percentage Rate (APR) and total repayment amount were incorrectly calculated and stated due to the improper inclusion of interest on financed costs, does this justify applying SKD?
Should the Free Loan Sanction apply when a lender miscalculates the APR due to an unlawful practice of charging interest on financed costs?
These legal issues submitted to the Supreme Court are already the subject of preliminary questions referred by Polish courts to the Court of Justice of the European Union (CJEU). Questions 1 and 2 are part of case C-566/24, referred by the District Court for Łódź-Śródmieście. Question 3 is part of case C-472/23, referred by the District Court for Warsaw, with a ruling scheduled for February 13, 2025.
How Should the One-Year Deadline from Contract Execution Be Calculated?
The first question concerns the interpretation of the term “contract execution” in Article 45(1) of the Consumer Credit Act. There are two prevailing interpretations. Borrower-friendly approach: The one-year period starts when both parties fulfill their obligations—generally, when the loan is fully repaid. Lender-friendly approach: The one-year period starts when the lender disburses the loan amount to the borrower.
Could Lenders Charge Interest on Financed Costs?
The second issue for the Supreme Court concerns the legality of charging interest not only on the principal loan amount but also on financed fees. The key question is whether banks could lawfully apply interest to amounts used to cover commissions and other non-interest costs.
Does an error in indicating the APR and the total amount payable, resulting from the inadmissibility of cost financing, constitute grounds for applying the Free Loan Sanction (SKD)?
The last question is directly linked to a potential affirmative answer from the Supreme Court to the second question. It concerns the consequences of recognizing the practice of charging interest on financed costs by lenders as inadmissible and, therefore, unlawful. If the Supreme Court adopts this view, it would mean that a lender engaging in such a practice has incorrectly indicated the APR and the total amount payable.
This legal issue seeks to determine whether the Free Loan Sanction is an appropriate and adequate legislative response to such a violation, which banks may have committed.
