A case on payment of credit interest compensation to mortgage credit borrowers has been initiated
Following a constitutional complaint, a case has been initiated before the Constitutional Court on compliance of Section 8.4(10)(2) of the Consumer Rights Protection Law with the first sentence of Article 91 of the Constitution of the Republic of Latvia.
Section 8.4 of the Consumer Rights Protection Law provides for a mortgage credit borrower protection fee from revenue of which is made a payment of credit interest compensation to mortgage credit borrowers.
In accordance with the contested provision, the relevant mortgage credit borrower in terms of application of this section is a consumer with which the payer of the fee has entered into a mortgage credit agreement if the balance of the mortgage credit does not exceed EUR 250,000.
The balance of the mortgage credit of the applicants exceeds EUR 250,000; therefore, in line with the contested provision they are not entitled to receive the compensation for this credit interest. They allegedly meet all other conditions necessary to receive the compensation. The applicants hold a view that the prohibition for them to receive the above compensation allows for an unjustified different treatment in comparison with other credit borrowers who also have a signed mortgage agreement with the variable interest rate in force until 31 October 2023. Thus, the contested provision allegedly infringes on their fundamental right included in the first sentence of Article 91 of the Constitution.
The Constitutional Court invited the institution that issued the contested regulation – the Saeima – to submit a letter of response detailing the factual circumstances of the case along with a legal justification by 26 June 2024.
The deadline for the preparation of the case is 26 September 2024. The Court will decide on the procedure and date for hearing the case once the case is prepared.
Related Case: 2024-09-01
Linked case: 2024-09-01