MADRID (AP) — Spanish banks face the prospect of having to pay back several billion dollars to clients following a European Court of Justice ruling over clauses in their mortgage agreements.
The decision Wednesday overruled one by a Spanish court in 2013 that annulled so-called ground clauses but exempted banks from repaying money made on the contracts up to that year.
The clauses set a minimum interest rate, meaning customers could not benefit when official rates dropped beneath that level. They started around 2009 as the financial crisis struck.
The European Court said a capping date for reimbursements was incompatible with EU law.
Spain's International Financial Analysts group estimated banks may have to pay 4.5 billion euros ($4.7 billion).
Shares in several major banks fell on the Madrid stock exchange following the announcement.