The bill of 29 May 2026 concerning Swiss franc mortgage loans could significantly change the way disputes between borrowers and banks are handled. Although at this stage it remains merely a legislative proposal, it is already attracting considerable attention due to the scale of its potential impact and the direction of the proposed solutions.
The drafters’ aim is to expedite court proceedings and standardise judicial practice in CHF loan cases. This is to be achieved through procedural changes which, in many respects, simplify the existing framework. At the same time, however, they disturb the equality of arms between the parties, favouring borrowers, which makes the bill particularly significant from a practical standpoint.
CHF mortgage proceedings to be faster and simpler
One of the most consequential proposals for the banking sector contained in the bill is the introduction of an automatic suspension of the consumer’s obligation to repay the loan, triggered as soon as the statement of claim is served on the bank. Should the proposed provisions enter into force, this mechanism could have significant financial and operational consequences for banks. In practice, it means that for the entire duration of the proceedings – which can span several years in CHF loan cases – borrowers would not be required to make repayments. Further consequences include the bank’s inability to terminate the loan agreement on the grounds of arrears, and a prohibition on reporting non-repayment of debt to credit registers. Furthermore, the bill provides for an obligation to retroactively delete existing entries, which would create substantial organisational burdens for banks and potentially harm their reputation.
The bill also changes the way courts handle cases
In particular, it allows for a wider use of in-camera hearings and the possibility of dispensing with a hearing, even where the parties have requested one in order to be heard.
Under the proposed procedural model, significantly greater weight will thus be placed on written evidence, including the examination of the parties by way of written statements. While this solution is intended to expedite the examination of cases, it simultaneously leads to a substantial curtailment of the principle of directness in civil proceedings. Departing from direct contact between the court and the parties makes it more difficult to assess the credibility of the parties’ assertions and to establish the actual circumstances surrounding the conclusion of the loan agreement. In particular, this may significantly limit the bank’s ability to prove the facts on which its legal claims are based, including the scope of information provided to the consumer prior to the conclusion of the agreement, the consumer’s awareness of the nature of the product offered, and the level of understanding of the exchange rate risk associated with a foreign currency-indexed or denominated loan. As a consequence, the proposed solution may weaken the adversarial nature of the proceedings and restrict the effective exercise of the parties’ right to present and verify evidence.
The process of providing reasons for judgments may also be simplified. The court will be able to confine itself to a concise indication of the legal grounds and a reference to the parties’ positions, rather than giving a detailed account of its reasoning. As a result, the clarity of the court’s argumentation may be diminished, which could be significant when deciding whether to use means of challenge.
The bill also proposes a permanent change to the composition of adjudicating panels. The default rule would be for cases to be heard by a single judge at both first instance and on appeal. While this measure is organisational and is intended to speed up proceedings, in cases of considerable complexity it means forgoing the benefit of collegiate deliberation when resolving ambiguous facts and significant points of law.
The proposed provisions on the allocation of costs in cases involving set-off of claims represent a significant departure from the established principle that costs follow the event. In practice, they may give rise to situations in which a bank bears the costs of proceedings despite having successfully raised a defence of set-off or having achieved a favourable economic outcome. This solution may result in a systemic shifting of the burden of litigation costs onto banks, irrespective of the actual merits of their procedural position, thereby undermining the equality of arms between the parties to the dispute.
CHF mortgage cases before the Supreme Court
The changes concerning proceedings before the Supreme Court are also of considerable significance. The bill provides for the possibility of refusing to hear a cassation appeal even where it has previously been accepted for examination. While this measure is consistent with the broader objective of reducing the number of cases reaching the Supreme Court, it may also affect the availability of cassation review in CHF mortgage cases.
The transitional provisions also merit attention
The bill states that the new regulations will also apply to pending cases.
In practice, this means that the new rules – including, in particular, the mechanism for suspending loan repayments – will apply immediately to a wide range of proceedings.
What will the final shape of the CHF Mortgage Loans Act look like?
The proposed changes undoubtedly align with the legislature’s stated aim of streamlining and expediting the examination of cases concerning loans indexed to or denominated in Swiss francs. However, it is reasonable to doubt whether such a far-reaching overhaul of the existing procedural framework will in fact deliver results commensurate with the scale of the proposed changes. It is by no means self-evident that the proposed solutions will lead to a material reduction in the duration of proceedings, while at the same time they may give rise to significant operational, organisational and financial consequences for the banking sector.
Of particular concern is the extent of the procedural advantages afforded to consumers. In many areas, the proposed regulations depart from the principle of equality of arms in civil proceedings, clearly favouring one category of litigant over another. This could undermine the fundamental principles of civil procedure, including the equality of the parties, the adversarial nature of proceedings, and the right to effective legal protection.
At this stage, it is impossible to predict the final shape of the proposed legislation. However, it is already clear that, if enacted in its current form, the bill could materially affect not only the conduct of CHF mortgage litigation, but also the financial and organisational situation of lending institutions and the litigation strategies they adopt.
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