Banks’ Freedom Restricted With Respect To Consumer Loans

In its Ruling No. 15-рп/2011 (the "Ruling"), dated 10 November 2011, the Constitutional Court of Ukraine (the "CCU") ruled that provisions of Article 11 of Law of Ukraine No. 1023-XII "On Consumer Rights Protection", dated 12 May 1991, as amended (the "Law") apply to all consumer loan agreements between banks and borrowers not only at the stage of the conclusion of such agreements but also during their performance.

During recent years, Ukrainian court practice has developed in such a way that provisions of the Law were applied to consumer loan agreements only with respect to the manner in which the agreements were negotiated and signed. During the course of their performance, agreements were governed by legislation specifically regulating credit relations.  From now on, regardless of the provisions contained in executed consumer loan agreements, Ukrainian banks will not be able to: