Swiss franc loans
Litigation concerning loans in Swiss francs
Loans in Swiss francs have been marketed by French border banks, particularly since the 2000s, to Swiss border workers, who receive Swiss income from Switzerland but live in France.
The French border banks oblige the Swiss border borrowers to open an account in Swiss francs in their books, the opening having been facilitated by the disappearance of the exchange controls.
Thanks to the opening of foreign currency accounts, cross-border workers settled their maturities in Swiss francs using their Swiss income, without a foreign exchange transaction by avoiding making international transfers.
But the operation of these accounts does not fit well with the jurisprudential rule, today enshrined in article 1343-3 of the Civil Code, which requires the creditor to be able to accept payment from the debtor in euros, so that if a contract loan obliges the borrower to pay in Swiss francs, using his foreign currency account, the loan agreement in Swiss francs will be deemed void.
For loans in Swiss francs to be lawful, the borrower must be able to pay in euros by debiting his account in euros, without exchange fees.
We speak of "foreign currency value clauses" to assess debts and "foreign currency clauses" for the currency of payment used to settle debts.
If the borrower can pay in euros, the loan contains a "foreign currency value clause". If he cannot, the loan contains a prohibited "foreign currency clause".
The generic term “loans in Swiss francs” is therefore not clear because it includes loans where the Swiss franc is used either as an instrument of account, containing a “foreign currency value clause”, or as a payment instrument, containing a “ foreign currency clause ”.
In the first case, the loans are legal while in the second, they are illegal because they are contrary to public order and must therefore be canceled.
This distinction is crucial, but it is not easy to establish.
The French border banks all indicate that the Swiss franc is used in their loans as an instrument of account.
However, since 2018, the Court of Cassation has ruled that the banks Crédit Mutuel and Crédit Agricole had lied to their customers by claiming, in their contracts, that the Swiss franc was used as an instrument of account while it was used as an instrument of payment.
Other border banks did not specify anything in their contracts, but it appears that the Swiss franc was also used as a payment instrument, so they marketed illicit loans.
To establish this distinction, it is necessary to verify whether the borrower can pay his installments in Swiss francs, generally by means of the debit of his foreign currency account opened in the books of the border bank, but also in national currency, that is in euros, by debiting their current account in euros, without a foreign exchange transaction or by being able to convert the loan into euros.
If this payment in euros is prohibited or if it is compulsorily subject to a foreign exchange transaction in Swiss francs, the Swiss franc is then used as a payment instrument and the loan is illicit because it infringes the legal tender and the forced price of the national currency (the French franc then the euro since 2001), introduced in France, by the law of August 12, 1870.
According to a case law of February 11, 1873, devoted to article 1343-3 of the Civil Code since 2016, In France, a creditor cannot refuse to be paid in national currency.
If a loan agreement requires the borrower to pay in Swiss francs, the loan agreement will be deemed void.
If, on the other hand, payment of maturities in euros is possible, the loans will be assimilated to loans indexed to the Swiss franc and are legal. Since 2016, this category of loans in Swiss francs, i.e. those repayable in Swiss francs or in euros, is governed by article L. 313-64 of the Consumer Code, can only be taken out by cross-border workers.
If the Swiss franc is used by a French bank as the unit of account and the euro is used as the currency of payment, the contract will be lawful, the payment then being indexed to the EUR / CHF rate.
If the Swiss franc appreciates against the national currency, the debt goes up and vice versa. In this case, the information on the risk of currency loss should be clear and not misleading. Otherwise, the information may be deemed insufficient and the clauses relating to this information may be deemed to be abusive, the right of which is imprescriptible.
With regard to Helvet Immo loans, which fall into this category, the BNP Paribas Personal Finance bank was convicted of a deceptive commercial practice at first instance.
All border banks and those that have marketed loans in Swiss francs claim that their loans fall into this second category.
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