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Spain’s Supreme Court Backs Banks in IRPH Mortgage Cases, Mandates Case-by-Case Review

Lower courts must now test each loan under an average-consumer transparency standard.

Overview

  • The Civil Chamber issued two rulings that reject a blanket finding on the transparency or abusiveness of IRPH clauses.
  • Judges must assess the facts of each mortgage to determine whether borrowers were clearly informed about the index.
  • Kutxabank won its cassation appeal against a 2017 judgment, marking a notable legal victory for the lender.
  • A separate appeal filed in 2021 by two borrowers from Girona was dismissed by the court.
  • The decisions follow 2024 guidance from the EU Court of Justice allowing annulment in certain cases, which Spanish courts must apply to individual disputes.