Today the CJEU issued a judgment in the case Lexitor (C-383/18). As we have presented the facts of this case before, we refer the readers to our description of the AG Hogan's opinion first - Early birds and credit costs' repayment... here.
Article 16 Directive 2008/48 (Consumer Credit Directive, CCD) states that 'The consumer shall be entitled at any time to discharge fully or partially his obligations under a credit agreement. In such cases, he shall be entitled to a reduction in the total cost of the credit, such reduction consisting of the interest and the costs for the remaining duration of the contract'.
The dispute pertained to the interpretation of the last part of this provision ('reduction consisting of the interest and the costs for the remaining duration of the contract'), namely, whether it allowed for the compensation in case of an early repayment of the credit of fees and charges placed on the consumer by the credit institution but unrelated to the duration of the credit agreement (para. 21). The CJEU believes that is indeed the case based on the purposive approach to CCD provisions. Art. 16 CCD replaced previously binding Art. 8 of Directive 87/102 (old Consumer Credit Directive), which referred to the consumer's right to 'an equitable reduction in the total cost of the credit'. Art. 16 CCD intended to make the general right of 'an equitable reduction' more precise by adding that this reduction would pertain to both interest and costs (paras. 27-28). The total cost of the credit as defined in Art. 3(g) CCD encompasses all fees and charges, with the only exception of public notary costs. The total cost of the credit includes, therefore, also fees and charges that are unrelated to the duration of the credit agreement (para. 23). The general objective of the CCD is to ensure a high level of consumer protection (para. 29), which aim would be endangered if during an early repayment the consumer could only be entitled to the reduction of costs presented by the credit provider as dependant on the duration of the credit agreement. It is, after all, the credit provider that unilaterally determines the fees and charges, and their amount, which could facilitate the credit provider choosing to limit fees and charges related to the duration of the agreement (paras. 31-32). The credit provider's interests are protected during the early repayment of the credit by Art. 16(2) and (4) CCD, which allow the credit provider to deduct costs related to the early repayment and for the Member States to set rules on ensuring the fit of the early repayment with the particular credit terms (para. 34).
All in all, this is the positive judgment for consumers, as they can be assured that the early repayment would entail a fair reduction in the total cost of the credit, which could not be manipulated by the banks by arbitrary setting of special, one-off fees and charges.
