Control of the information and transparency obligations at pre-contractual and contractual stage regarding the floor clauses set forth in mortgage loans. The application of the transparency test when the banking client is not a consumer, in light of the judgment of the Spanish Supreme Court dated on June 3th, 2016

Abstract

The judgment of the Supreme Court rendered on May 9th, 2013 constituted a landmark case when determining if the so-called floor clauses concerning mortgage loans where valid in accordance with the Law. The aforementioned ruling set out as a condition precedent to determine its lawfulness two mechanisms, named incorporation test and transparency test, respectively. Whereas the application of the first control has been unanimously accepted regardless of the banking customer’s categorization, it remained unclear the scope of the transparency test. Notwithstanding most of the Provincial Courts hold that the second control was exclusively applicable when the plaintiff is a consumer, there was a set of judgments where it has been construed that the transparency test could be applicable to banking customer who did not meet the requirements to be considered as a consumer. However, once the judgment of the Spanish Supreme Court dated on June 3th, 2016 was published, it seems that the preliminary doubts have been cleared up, since it established that consumers are the only beneficiaries of the transparency test.