Cass. civ. 1ère, 9 July 2025, no. 24-19.647

In this ruling of 9 July 2025, the First Civil Chamber of the Court of Cassation made a significant reversal of case law concerning loans denominated in foreign currencies, particularly Swiss francs, imposing on banks a greater obligation of transparency regarding exchange rate risks throughout the term of the contract.

A delicate context: change in circumstances and exchange rate risk

Ms O. had taken out several property loans denominated in Swiss francs with the Caisse d’épargne d’Alsace, repayable in the same currency. Initially employed in Switzerland, she therefore received her income in Swiss francs. Following her dismissal and early retirement, her financial resources consisted mainly of euros, giving rise to a new exchange rate risk during the term of the contract.

Considering that the terms of her contracts were unfair and that the bank had failed to warn her, she took legal action against the bank.

The initial analysis of the Court of Appeal

The Colmar Court of Appeal dismissed her claims, ruling that there was no exchange rate risk since she initially received her income in Swiss francs and had not, at the outset, been subject to currency fluctuations. This decision was based on the ruling of the Court of Cassation in 2023. (1^st Civil Chamber, 1 March 2023, appeal no. 21-20.260, published)

Clear and explicit reversal by the Court of Cassation

The Court of Cassation has reversed its position here by requiring that the analysis of unfair terms not be limited to the initial moment when the loan was concluded, but take into account all circumstances that may change during the term of the contract. It explicitly states:

« Where a loan granted in a foreign currency contains clauses relating to repayment terms involving a currency risk for the borrower, in order to ensure adequate and effective protection of consumers in accordance with the objectives of the aforementioned directive, it is necessary to take into account all the circumstances surrounding the conclusion of the contract, as well as their reasonably foreseeable evolution until its expiry, so as to satisfy the requirement of transparency necessary for the consumer to be fully informed. This is particularly the case with regard to the status of the borrower to whom the credit is offered as a cross-border worker and the purpose of the credit, both of which are linked, by their domicile or location, to a State in which the currency is not the currency of the credit. »

The financial institution « must provide the borrower with clear and comprehensible information to enable him to take his decision prudently and in full knowledge of the risks inherent in taking out such a loan. In this respect, it is incumbent upon it to explain in a transparent manner the specific operation of the contractual mechanism proposed, throughout its duration, so as to enable the borrower to assess, in particular, the impact on repayments of a significant depreciation of the currency that is legal tender in the country where the financed property is located and/or where the borrower is domiciled and would receive their income during the term of the contract. « 

The Court of Cassation has therefore reversed its 2023 decision (1^st Civil Chamber, 1 March 2023, No. 21-20.260). This new ruling radically changes this approach by now requiring a forward-looking analysis of exchange rate risk.

Reasons for the reversal

The Court explains this change by referring explicitly to European case law, in particular the judgments of the CJEU (CJEU, 30 April 2014, Kasler, C-26/13; CJEU, 20 September 2017, Andriciuc, C-186/16), which impose an increased obligation of transparency on banks, requiring them to inform borrowers of the risks involved throughout the term of the contract and not only at the time of signing.

Practical implications

This reversal therefore requires banks to significantly strengthen their duty to provide advice and information, particularly in foreign currency loan agreements. Financial institutions must now anticipate and clearly explain the risks of possible currency fluctuations throughout the term of the contract, taking into account any personal or professional changes that may affect borrowers’ ability to repay.

Article written by Olivier VIBERT