Banks May Keep Borrowers' Salary As Security, ECJ Says

Law360, London (October 16, 2020, 5:57 PM BST) -- European banks cannot force consumers to deposit their entire salary into a savings account for favorable loan terms — but they can hold part of a worker's salary for up to a decade, the European Union's top court has ruled.

Consumer protection laws bar EU member states from passing laws allowing banks and lenders to demand that borrowers deposit every penny they make into an account with that financial institution, the European Court of Justice said.

Giving banks that option is "disproportionate" and does not take into account the size of the loan, when it falls due or how long the...

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