Expat bank CEO gets into conflict with Romania’s Superior Council of Magistracy

An official letter signed by Raiffeisen Bank’s Dutch CEO Steven van Groningen in July has angered magistrates in Romania. van Groningen, who also leads the Council of Banking Employers in Romania - CPBR, addressed the problem of conflicting court sentences ruled in lawsuits between banks and their clients. The Superior Council of Magistracy accuses van Groningen of interfering with the judicial process and putting pressure on judges to rule in favor of banks in their lawsuits with clients. In early July, Steven van Groningen sent a memorandum on CPBR’s behalf to the Superior Council of Magistracy (CSM), to the Ministry of Justice, and to the presidents of 15 Appeal Courts in Romania, signaling the lack of a unitary practice in lawsuits between banks and their clients related to foreign currency loans. The letter also states that courts in Romania have often ruled conflicting decisions in lawsuits filed by bank clients against the banks, especially those related to the reimbursement of loans denominated in Swiss Francs (CHF). The letter’s conclusions were harsher. The CPBR pointed out that courts often interfered with local banks’ activities, showing a lack of understanding or ignorance to market mechanism and that various courts had different interpretations of the same issues. “Because these courts rule against the law, local banks have their legitimate rights violated and can register major damages,” the letter mentioned. Moreover, the bankers hinted that the local banks’ shareholders may decide to stop their investments in Romania or even decide to go against the state to recover their damages resulted from incorrect state intervention in their business. The letter, which was sent on July 4 to the judicial institutions, was later published by a judicial portal. After analyzing its content, the Superior Council of Magistracy’s Judiciary Inspection ruled that the letter called in question the local courts’ decisions and the professionalism of judges who made those decision, “which is unacceptable in a democratic state”. The Judicial Inspection also considers that the letter criticizes the solutions that local courts ruled against banks in their lawsuits with clients and thus exceeds the liberty of expression. The Superior Council of Magistracy doesn’t mention any sanction against van Groningen. The Council of Banking Employers in Romania reacted to CSM’ statement saying that the letter was an institutional one and was not meant to be published in the press. Moreover, according to CPBR, this was an institutional letter which expressed the position of the Council’s members, and not a personal view of the Council’s president. Local banks have been confronted with an increasing number of lawsuits lately. Some of them are related to the conversion of loans in foreign currency into local currency loans while others are related to the new law on debt discharge, which allows mortgage debtors get rid of their debts by giving the mortgaged assets to the banks. Raiffesen Bank has been one of the most vocal opponents of the debt discharge law. The bank plans to go against the Romanian state on this matter, as local media recently reported. Raiffeisen Bank threatens the Romanian state with legal action