The Eleventh Civil Senate of the Federal Court of Justice (BGH), responsible inter alia for banking law, has ruled on the collective actions brought by a consumer protection association against two savings banks. It determined that the following clause, modeled after No. 17 (2) Sentence 1 of the General Terms and Conditions for Savings Banks (AGB-Sparkassen), may not be used in banking transactions with private customers (consumers) because it unduly disadvantages them and is therefore invalid under Section 307 of the German Civil Code (BGB):
No. 17 – Fees, Costs, and Disbursements
(…)
(2) Determination and Disclosure of Fees
Unless otherwise agreed, fees in the private and business customer sectors are determined and adjusted by the savings bank at its equitable discretion, which is reviewable under Section 315 of the German Civil Code, taking into account market conditions (e.g., changes in the general interest rate level) and expenses. (…)
The lower courts each granted the injunction. The Eleventh Civil Senate dismissed the appeals filed by the defendant savings banks.
In its reasoning, the Eleventh Civil Senate elaborated:
According to the most customer-unfavorable interpretation required in collective action proceedings, the clause entitles savings banks to levy fees even for services for which they cannot claim remuneration, as they are obligated to provide these services due to their own statutory or ancillary contractual duties, or because they perform them exclusively in their own interest (e.g., processing account attachments, cash withdrawals at the counter, and tasks related to tax remittance). Clauses that – like the one challenged here – enable a credit institution to charge fees for activities it is legally and contractually obligated to perform or that it carries out in its own interest, do not withstand content review under Section 307 BGB, according to the consistent jurisprudence of the Federal Court of Justice. This is because they are incompatible with essential fundamental principles of the statutory regulation from which they deviate and unduly disadvantage customers contrary to the principles of good faith.
The unilateral right to change prices contained within the clause also unduly disadvantages savings bank customers because the conditions entitling the savings banks to implement such changes are unclear, and the clause does not impose a clear obligation on the savings banks to reduce fees when costs decrease. It contains no commitment to the extent of cost increases in the event of a price hike, nor any obligation for the savings banks to lower fees in the event of decreasing costs. This allows savings banks to effect price changes not merely to pass on their own costs but to increase their profits, thereby altering the originally agreed contractual equivalence relationship in their favor.
This also applies to the unilateral right of interest rate adjustment for savings banks contained within the clause. While the Federal Court of Justice, in its judgment of March 6, 1986 (BGHZ 97, 212 et seq.), did not deem an indefinite interest rate adjustment clause of a bank in lending business invalid, but merely assigned it a specific content through interpretation, the deciding Senate had already expressed doubts in the past as to whether this jurisprudence could still be maintained. It now abandons this jurisprudence in alignment with the interim lower court jurisprudence and the widely prevailing opinion in legal literature. The general principles for price adjustment clauses must also be observed for interest rate adjustment clauses. Accordingly, an interest rate adjustment clause must adhere to the principle of equivalence and must not unilaterally favor the bank. Based on these principles, the challenged right to interest rate adjustment, much like the right to price adjustment, does not withstand content review.
Judgments of the Federal Court of Justice of April 21, 2009 – XI ZR 55/08 and XI ZR 78/08
Lower Courts:
Higher Regional Court of Nuremberg – Judgment of January 29, 2008 – 3 U 1887/07
Regional Court of Nuremberg-Fürth – Judgment of august 28, 2007 – 7 O 2244/07
and
Higher Regional Court of Brandenburg – Judgment of January 30, 2008 – 7 U 71/07
Regional Court of Frankfurt (Oder) – Judgment of March 7, 2007 – 13 O 370/06
Source: Press release of the Federal Court of Justice of April 21, 2009
Goldberg Rechtsanwälte
Attorney Michael Ullrich, LL.M. (Information Law)
Specialist Lawyer for Information Technology Law (IT Law)
Email: info@goldberg.de
