Stephan Schmalzl
Updates
Banking & Financial Services
Eye-catching decision on advertising of consumer loans
Austria | 19 January 2021The Supreme Court recently had to decide whether ads for consumer loans which stated a monthly rate in the main text and a debit interest rate "from... % p.a." depending on creditworthiness, together with an example in the footnote text, complied with the Consumer Credit Act. The court held that the requirement that certain information be presented in a clear, concise and prominent way is not met with a combination of an attractive monthly rate in the main text and the other standard information in small print.
Oops, I did it again: Austrian banks' terms and conditions and PSD II
Austria | 24 November 2020The European Court of Justice (ECJ) recently responded to the Supreme Court's request for a preliminary ruling and issued a decision with respect to a dispute concerning the standard terms and conditions of Deniz Bank. The ECJ also addressed an additional issue relating to the relationship between Article 52(6)(a) of the EU Payment Services Directive on tacit consent and the EU Unfair Consumer Contract Terms Directive.
Legislative moratoria on loan repayments – are certain SMEs more equal than others?
Austria | 06 October 2020The outbreak of COVID-19 triggered various response measures across the globe. Among other measures, the Austrian legislature, similar to other European countries, has implemented a moratorium on payments of credit obligations to support operational and liquidity challenges faced by borrowers due to the pandemic. Contrary to, for example, Germany, the Austrian legislature has included, in addition to consumers, micro-enterprises in the scope of the moratorium.
COVID-19 pandemic and banking in Austria – lessons learned?
Austria | 14 July 2020A significant part of Austria's COVID-19 subsidy programme was structured as government guarantees for bridging loans to be granted by banks to provide the economy with liquidity. Now, less than three months after the start of the programme, small and medium-sized enterprises regard this approach as disastrous, with many complaining that the granting of loans has been slow and cumbersome, despite the state guarantee, if a loan has been granted at all.
Failing banks – first application of new deposit guarantee scheme
Austria | 13 March 2020An insolvency proceeding was recently opened for the assets of Anglo Austrian AAB AG. This was the last step in a long-lasting dispute between the bank and Austrian and EU regulators, leading to the revocation of the bank's licence. This case is notable because it is the first application of the newly enacted deposit guarantee scheme and was expected to be the first application of the insolvency provisions under the Federal Act on the Recovery and Resolution of Banks.
No worms for early birds? Lexitor and Austrian implementation of EU Consumer Credit Directive
Austria | 24 January 2020Considering the obvious conflict with European Court of Justice case law, the Austrian legislature's aim to fully implement the EU Consumer Credit Directive and the Austrian Consumer Credit Act's intended (but directive-breaching) effects consumers, legal advisers and the courts are now confronted with the delicate question of how consumer requests for repayment should be dealt with.
GDPR versus PSD II – right of access to information versus charges for information
Austria | 08 November 2019The Federal Administrative Court recently confirmed that a credit institution had violated its obligations under the EU Data Protection Regulation by refusing to provide its customer access to information – at no cost – on specific payment transactions effected in the previous five years. Consumer protection organisations and the Austrian press celebrated the decision, but on closer inspection, those cheers seem to have been uttered a little too early and the celebrants' expectations appear to have been a little too high.
FMA extends deadline for strong customer authentication for e-commerce card payments
Austria | 25 October 2019Following the recent agreement reached by the European Banking Authority, the Austrian Financial Markets Authority extended the deadline for implementing strong customer authentication for card payments in e-commerce transactions. The extension applies only to card payments in e-commerce transactions; all other types of transaction require full compliance with the strong customer authentication standards.
Credit insurance – void assignment for breach of banking secrecy
Austria | 27 September 2019The Supreme Court recently extended to credit insurers its established jurisprudence that banking secrecy may prevent a statutory transfer of credit claims on fulfilment of such claims by a third party. Further, the court affirmed its view that the purpose of making a credit claim recoverable does not constitute an overriding interest that could breach banking secrecy.
Frolicking in the (cash)pool? Hesitant embrace of state-of-the-art cash management
Austria | 30 August 2019The Supreme Court recently dismissed an insolvency administrator's complaint challenging the enforcement of an account pledge provided to a bank as security for a notional cash pool arrangement. The court's guidance on the advantages of cash pooling arrangements and on contractual minimum requirements must be considered when structuring new or reviewing existing cash pool arrangements of any kind.
