Early repayment penalty: Commerzbank is subject to the BGH | Right | 06/28/2021

Commerzbank has finally lost a legal dispute due to excessive early repayment penalties in the event of early termination of a real estate loan. The Federal Court of Justice (BGH) has rejected the non-admission complaint of the credit institution, as reported by “Spiegel Online”. The bank had sued because the Higher Regional Court (OLG) Frankfurt am Main had not admitted an appeal against a judgment it had pronounced last July (case number: 17 U 810/19). The judgment was in favor of Commerzbank.

“The BGH is actually following the decision of the Higher Regional Court Frankfurt am Main and considers further clarification of the matter to be unnecessary”, quoted the “Spiegel Online” lawyer Marko Huth from the Berlin law firm Gansel. This had won the OLG ruling against Commerzbank on behalf of two clients. With this, the lawyers see the position of borrowers as strengthened. According to the report, Commerzbank did not want to comment on the issue.

21,500 euros in early repayment penalty
What was it about? With prepayment penalties, money houses secure – to put it simply – compensation for the fact that they lose interest income in the event of a premature termination of a loan agreement. In the present dispute, two customers of the bank had taken out two loans totaling around EUR 300,000 in 2016. The “Handelsblatt” reported on this at the time. They wanted to terminate this in 2018 for personal reasons. For this they should pay a total of more than 21,500 euros to Commerzbank. They sued against this, among other things because of unclear contractual clauses.

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The OLG agreed with this view in summer 2020 and now also the BGH. The Frankfurt judges have come to the opinion that the statements of the credit institute for the calculation of the compensation in the disputed loan agreement “do not meet the legal requirements”, writes the “Handelsblatt”. The information should be “clear, concise, understandable and precise”. However, the OLG did not fundamentally shake the fact that banks are allowed to demand compensation for lost interest income if a loan agreement ends prematurely.

Customers can still avoid prepayment penalties
The ruling, which has now been confirmed by the BGH, is also of importance for customers of other banks, said lawyer Huth “Spiegel Online”. Some institutes have revised forms, but these are also “still open to attack in some cases”. For many private individuals there is the option of avoiding a prepayment penalty. According to the report, this applies to contracts from March 22, 2016. At the time, the legislature stipulated that banks must provide their customers with detailed and understandable information about the so-called early repayment penalty, especially when it comes to construction financing. (jb)