Exchange Rate Risk in Consumer Credit and Limitation Periods – Recent Case Law of the CJEU

The judgment of the Court of Justice of the European Union dated 19 March 2026 in Case C‑679/24 constitutes another significant milestone in the development of case law concerning consumer protection under Council Directive 93/13/EEC on unfair terms in consumer contracts, particularly with regard to the issue of limitation periods for claims arising from such terms. The case originated from a preliminary ruling request submitted by a Hungarian court in proceedings between the consumer HL and the financial institutions UniCredit Bank Zrt. and Momentum Credit Zrt. The core of the dispute concerned the validity of a mortgage loan agreement denominated in Swiss francs, which included a clause transferring exchange rate risk exclusively to the consumer.

This type of loan agreement had been widely used in a number of Member States in the past, with its problematic nature becoming particularly apparent during periods of significant currency fluctuations. In the case at hand, the consumer argued that they had not been sufficiently informed about the nature and scope of the exchange rate risk and that the relevant contractual clause was therefore unfair. On this basis, the consumer sought both a declaration of invalidity of the contract and the legal consequences resulting from such invalidity, in particular in the form of a settlement between the parties. However, the key issue was the objection of limitation raised by the defendants, which was accepted by the court of first instance, concluding that the limitation period had begun to run on the date the contract was concluded.

The legal framework of the case is based on Directive 93/13/EEC, the aim of which is to ensure a high level of consumer protection as the weaker contractual party. The Directive defines an unfair term as one that has not been individually negotiated and which, contrary to the requirement of good faith, causes a significant imbalance in the parties’ rights and obligations to the detriment of the consumer. The consequence of establishing the unfair nature of a term is, in particular, that such a term is not binding on the consumer, while the contract may continue to exist without it if possible. At the same time, the Directive requires Member States to ensure effective procedural mechanisms that make it possible to prevent the continued use of unfair terms and to ensure the effective enforcement of consumer rights.

In its decision, the Court of Justice built on established case law according to which procedural rules of national law, including rules on limitation periods, fall within the procedural autonomy of the Member States, but must comply with the principle of effectiveness, i.e. they must not make the exercise of rights conferred by EU law impossible or excessively difficult. In this context, the assessment focused in particular on whether it is compatible with EU law for a five-year limitation period for consumer restitution claims to begin on the date of conclusion of the contract, regardless of whether the consumer was or could have been aware of the unfair nature of the clause in question.

The Court of Justice clearly rejected this possibility. It emphasised that such an interpretation would lead to a situation where the consumer could be deprived of the possibility of effectively exercising their rights before even becoming aware of their existence or of the unfair nature of the contractual term. Given that the consumer is in a structurally weaker position vis-à-vis the professional service provider – both in terms of information and bargaining power – it is necessary, when determining the starting point of the limitation period, to take into account the consumer’s real ability to identify a breach of their rights. The Court therefore held that the limitation period cannot begin on the date of conclusion of the contract if the consumer did not know and could not reasonably have known of the unfair nature of the clause.

A significant part of the judgment also concerns considerations regarding the relationship between limitation and case law. The referring court asked whether the starting point of the limitation period could be derived from the date of a judgment of the Court of Justice or of a national supreme court dealing with similar contractual terms. The Court of Justice rejected this possibility on the grounds that an average consumer cannot be expected to actively monitor case law and draw conclusions from it regarding the unfair nature of a specific term in their contract. Such a requirement would be contrary to the protective purpose of Directive 93/13 and would place an unreasonable burden on the consumer.

However, the Court of Justice acknowledged that a relevant starting point for the limitation period may be a situation in which there is a final court decision concerning the specific consumer and the specific contract, from which the unfair nature of a term clearly follows. In such a case, it may be assumed that the consumer has obtained sufficient knowledge of their rights and is capable of effectively exercising them. At the same time, the Court emphasised that the burden of proof regarding the existence of such knowledge lies with the professional party, i.e. the credit provider.

The judgment has significant practical implications, particularly in the area of consumer credit, especially loans denominated in foreign currency. It confirms that the assessment of the transparency and fairness of clauses on exchange rate risk remains crucial and that insufficient information provided to the consumer may lead not only to the invalidity of the specific clause, but also of the entire contract. At the same time, the judgment significantly affects the procedural strategies of the parties, as it limits the ability of credit providers to effectively defend themselves against consumer claims by invoking limitation.

Overall, it can be concluded that in the present case the Court of Justice consistently developed the principle of effectiveness and confirmed that consumer protection must not be merely formal, but must be genuinely effective. Limitation rules must therefore be interpreted and applied in a manner that reflects the actual position of the consumer and does not result in a denial of justice. This approach further strengthens the trend in case law towards a substantive concept of consumer protection in EU law and represents an important interpretative framework for the application of national legislation of the Member States. 

This text was translated by AI.