Overview

On 19 September, the Hungarian Parliament adopted an amendment to the Hungarian Banking Act (and to several other Acts). This has already caused major turbulence in the banking sectors in both Hungary and Austria. The new law is expected to be passed in the coming days, and will enter into force on the 3rd day after promulgation.

The amendment's central outcome is that persons qualifying as consumers may fully prepay their FX-denominated loans at a fixed exchange rate irrespective of the actual exchange rate applicable at the time of prepayment. Banks may not charge any fees or commissions for accepting the prepayment.

This briefing outlines the conditions banks will be obliged to accept and explains why the amendment may be challenged as unconstitutional.

Click 'View Briefing' to read on.