Non-interest costs of credit and the applicability of the rate of interest: the CJEU in C-744/24

In April 2026, the CJEU delivered a judgment in C-744/24 P.W. v Bank Polska Kasa Opieki S.A. This is an interesting case because it tackled the scope and meaning of various cost-related notions in  Directive 2008/48/EC on Consumer Credit, as well as the common practice of tying credit products to other products, such as insurance.

The consumer entered into a loan contract for 150 000 zlotys (PLN) (approximately EUR 34 400), where PLN 133 214.92 (approximately EUR 30 550) was actually paid to the consumer, with the remaining PLN 16 785.08 (approximately EUR 3 850) being used to pay for credit insurance, described as ‘voluntary’. Taking out that voluntary insurance reduced the interest rate. The consumer paid a total of PLN 207,073.53 (approximately EUR 47,500); the total cost of the credit was PLN 73 858.61 (approximately EUR 16 950). That cost included interest of PLN 57 073.53 (approximately EUR 13 100) and an insurance premium of PLN 16 785.08 (approximately EUR 3 850). The interest rate was 8.49% per annum (comprising a base rate of 4.36% and a margin of 4.13%). That interest rate was applied to the amount actually paid to the consumer under the contract, plus the insurance premium. The APR stated in the credit agreement was 12.57%. The term of the agreement was set at 96 months.

The consumer disputed the correct calculation of the APR and started an action before the Sąd Rejonowy we Włodawie (District Court, Włodawa, Poland); which asked the CJEU:
Is Article 3(g) and (j) of Directive 2008/48, read in conjunction with Article 10(2) of that directive, must be interpreted as precluding the inclusion, in consumer credit agreements, of terms providing for the application of the interest rate not only to the total amount of the credit but also to sums allocated to the payment of costs associated with that credit and which, as a result, form part of the total cost of the credit to the consumer. In other words, whether the rate of interest can be applied to other components of the cost structure (forming part of the total cost of credit) rather than the total amount of credit.

The dispute therefore raised the question of the regime of non-interest costs, or as introduced in the applicable Polish law, ‘cost of credit excluding interest ’, such as the insurance premium in question.

Under Article 3(g) the total cost of the credit to the consumer means all the costs, including interest, commissions, taxes and any other kind of fees which the consumer is required to pay in connection with the credit agreement and which are known to the creditor, except for notarial costs; costs in respect of ancillary services relating to the credit agreement, in particular insurance premiums, are also included if, in addition, the conclusion of a service contract is compulsory in order to obtain the credit or to obtain it on the terms and conditions marketed. Under Article 3(g), therefore, all costs in question are part of the total cost of credit, including non-interest costs such as the insurance premium. Although labelled as voluntary, because it provided access to a better rate, it directly falls under the components of the total cost of credit (see para 41). It is also important that the CJEU noted that it does not matter what sum was actually paid to the borrower. The fact that the insurance premium was not first transferred to the borrower, who would then transfer it back to the bank, does not affect the definition of the total cost of credit. The insurance premium, therefore, was part of the total cost of credit. Under Article 3(i), the total cost of credit is expressed as an annual percentage. The APR ‘means the total cost of the credit to the consumer, expressed as an annual percentage of the total amount of credit, where applicable, including the costs referred to in Article 19(2)’.

The CJEU then further analysed other concepts in the Directive. Under Article 3(l) the total amount of credit means 'the ceiling or the total sums made available under a credit agreement'; whereas  under article 3 (h) total amount payable by the consumer ‘means the sum of the total amount of the credit and the total cost of the credit to the consumer ', whereas under Article 3(j) the borrowing rate is the ‘interest rate … applied … to the amount of credit drawn down’. The CJEU noted that the total amount of credit and the amount of the credit drawdown designate the sums made available to the consumer, which excludes those used by the lender to pay the costs connected with the credit concerned and which are not actually paid to the consumer (para 55).

Based on this and referring to its earlier practice, the CJEU concluded that the concepts of total amount of credit and total cost of the credit are mutually exclusive and that, consequently, the ‘total amount of credit’ cannot include any of the sums forming part of the ‘total cost of the credit’ to the consumer (para 53). Consequently, ‘none of the sums intended to cover the agreed commitments under the relevant credit concerned – such as administrative costs, interest, commissions and any other type of charge which the consumer is required to pay – may be included either in the total amount of credit, within the meaning of Article 3(l) and Article 10(2) of Directive 2008/48, or in the amount of the credit drawdown within the meaning of Article 3(j) of Directive 2008/48 (para 57).   That also applies to insurance costs (para 57).

The CJEU ruled that Article 3(g) and (j) of Directive 2008/48/EC, read in conjunction with Article 10(2) of that directive, must be interpreted as precluding the inclusion, in consumer credit agreements, of terms providing for the application of the interest rate not only to the total amount of the credit but also to sums allocated to the payment of costs associated with that credit and which, as a result, form part of the total cost of the credit to the consumer. In short, the CEU ruled that interest cannot be applied to the payment of the sums that are used to cover insurance premiums and other costs of credit.

This is an important ruling that addressed the frequent practice of banks to condition one product on another. This practice of tying and bundling is now addressed in the new Directive 2023/2225 on Consumer Credit, which enters into force on November 20 2026. The ruling remains relevant as it deals with the regime of costs associated to such practices. The ruling is also relevant to other non-interest costs associated with the loan. Although these are part of the total cost of credit and are part of the APR, they cannot be part of a basis on which the interest is calculated on. The interest rate, based on the judgment, can only apply to the what falls under the total amount of credit, the actual sum made available by the creditor to the consumer.

Access to basic payment accounts and a duty to prevent money laundering - the CJEU in C-81/24 Jenec

Earlier this month, the CJEU delivered a judgment in C-81/24 LH v OTP Banka d.d., the case known as 'Jenec'. This is the first case on the interpretation of  Directive 2014/92/EU on access to payment accounts with basic features (PAD), and in particular Article 16, which provides a right of access to basic bank accounts.

 

The question referred to the CJEU by the Slovenian Okrajno sodišče v Mariboru asked whether Article 16(4) of PAD read in the light of Directive 2015/849 or the Fourth Anti-Money Launderng Directive (4AMLD), may be interpreted as authorising Member States to require banks to reject a consumer’s application to open a payment account with basic features on the ground that he or she is included in a list of the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury. 

 

This essentially required tackling the question of how the right to access payment accounts with basic features or basic bank accounts can be reconciled with the bank's duty to comply with anti-money laundering rules, and weighing two important policy goals, the financial inclusion of consumers, who have no other payment account, which is a cornerstone of financial inclusion,  and the aim to prevent the use of the EU financial system for the purposes of money laundering and terrorist financing.

 

We have earlier reported on  Advocate General Richard de la Tour's Opinion in the case. The AG was of the opinion that Article 16(4) of PAD must be interpreted as meaning that a banking institution may not refuse to open a payment account with basic features solely on the ground that the name of the consumer applying to open such an account is on the OFAC, unless, the applicable national law expressly provides for such a more stringent approach, given the minimum nature of the directives.

 

The CJEU acknowledged that the right of the consumer to open a basic bank account is dependent on compliance with the provisions relating to the prevention of money laundering and the countering of terrorist financing, and therefore that the AML rules must be considered when assessing whether or not the bank can refuse to open a basic bank account (para. 39). It has also established that 4AMLD does not provide that inclusion on an OFAC list or on any other list of that type drawn up by a third country automatically prohibits a bank from establishing a bank-customer relationship (para 45). The CJEU noted that, instead of a blanket exemption, 4AMLD adopts a risk-based approach and requires banks to conduct customer due diligence. Inclusion of a person on an OFAC list or on any other list of that type may constitute a relevant risk factor that the bank is required to take into account in its individual assessment of the risk of AML (para 51). However, it cannot be the only reason for the account's refusal.

 

The CJEU concluded that PAD must be interpreted as not permitting Member States to require banks to refuse to open a basic bank account for a consumer for the sole reason that that consumer is included on a list of persons subject to restrictive measures imposed by a third country, unless the bank has carried out an individual assessment of the risk of money laundering or terrorist financing connected with the intended business relationship. 

 

This is an important judgment that strengthens the consumers’ right of access to basic bank accounts. Banks may be overly cautious in complying with AML rules for fear of very stringent sanctions, prioritising AML compliance. It is therefore important to clarify what exactly AML compliance requires in this context. Otherwise, consumers, those who are vulnerable and in the most need of an account, might often be denied access to an account by reliance on AML provisions, whether or not such denial would be effectively justified from a risk-based perspective.