Variable-Rate Mortgages and Unfair Terms: What the CJEU Decided on WIBOR (CJEU, Third Chamber, 12 February 2026, C-471/24, J.J. v PKO BP S.A.)

Court of Justice of the European Union (CJEU), Third Chamber, 12 February 2026, Case C-471/24, J.J. v PKO BP S.A.

What is the background to this case?

The facts: a Polish borrower against his bank

The story begins in June 2019, when a Polish consumer, whom we will call J.J., contacts a major Polish bank with a view to financing the purchase of his home. He seeks to borrow about €96,700. The bank gives him general information on the risks linked to variable-rate loans, but does not explain precisely how the benchmark index that will serve as the basis for calculating his rate works.

On 1 August 2019, the contract is signed. It covers a total amount slightly above €100,000, for a term of twenty years. The interest rate is variable: it is calculated by adding the WIBOR 6M index (set at 1.79% on the date of signature) and a fixed margin of 1.85% decided by the bank. The rate is reviewed every six months according to changes in the index.

A few years later, interest rates rise significantly in Poland. J.J.’s monthly instalments increase with the index. He then challenges the legality of the variable rate clause, complains to his bank, does not obtain satisfaction, and ends up suing the institution in September 2023, seeking reimbursement of an overpayment of about €2,620. The Regional Court of Częstochowa, uncertain about the answer to give, decides to refer four questions for a preliminary ruling to the Court of Justice of the European Union.

What is WIBOR and why is it at the heart of the dispute?

WIBOR, the Warsaw Interbank Offered Rate, is the Polish equivalent of the European Euribor or the British Libor. It is the rate at which Polish banks lend liquidity to one another on the interbank market. Its six-month variant, WIBOR 6M, reflects this rate for interbank loans with a term of six months.

What makes this rate particularly sensitive is that the successive WIBOR values are not always determined on the basis of real transactions actually concluded on the market. They rest largely on price quotes submitted by a panel of contributing banks, ten in number at the time of the events. These banks communicate to the index administrator (GPW Benchmark S.A.) the rates at which they would be prepared to lend funds to one another, and the index is calculated from these declarations.

J.J.’s central argument was as follows: since his own lender was among the contributing banks, it could indirectly influence the index used to calculate the rate on his loan, thereby building itself a sort of “hidden margin” to the borrower’s detriment. Moreover, the fact that the underlying data do not correspond to real transactions but to mere quotes was said to give the index a subjective and opaque character.

Does Directive 93/13 apply to the variable rate clause?

Why does the mandatory provisions exception not work here?

The first question put to the Court was one of admissibility: can Directive 93/13/EEC on unfair terms even be invoked against a variable rate clause indexed to a regulated index?

The Directive does indeed provide for an important exclusion, in Article 1(2): contractual terms which merely reproduce mandatory statutory or regulatory provisions are not subject to the unfair terms review. The logic is simple: if the legislature itself fixed the content of the clause, it is presumed to have established a balance between the parties, so that there is no need to subject it in addition to judicial review.

The bank could have argued that the clause faithfully reproduced Polish law (which requires the use of a benchmark index for variable-rate loans) as well as European Regulation 2016/1011 (which governs benchmark indices). The Court rejects this argument in two stages.

First, Polish law was limited to establishing a general framework: it stated that if the rate was not fixed, it had to be determined by reference to a benchmark index plus a margin. But it left the professional considerable discretion, both in choosing the index and in setting the level of the margin. Such a framework provision does not preclude the application of the Directive, as the Court had already held in an earlier Raiffeisen Bank judgment of May 2024.

Second, Regulation 2016/1011 on benchmarks, although an act of the Union legislature, is not intended to establish a balance between the rights and obligations of the parties to a loan agreement. It regulates index administrators and contributors, but does not determine the terms of the credit agreement itself. Consequently, the WIBOR index’s compliance with this Regulation is not sufficient to exclude the clause from the scope of Directive 93/13.

The conclusion is clear: the variable rate clause can be examined under unfair terms law.

What is the real extent of the bank’s transparency obligation?

The central role of the ESIS in pre-contractual information

Once it is established that the Directive applies, the Court examines whether the clause satisfies the transparency requirement. For with regard to terms relating to the main subject matter of the contract (which is what the interest rate clause is in a mortgage loan), the court may review unfairness only if the term is not drafted in plain, intelligible language. The Court recalls in this respect that the Union legislature has incorporated this transparency requirement in Article 4(2) of Directive 93/13, as it had already specified in its earlier case law.

J.J. argued that the bank should have explained to him: how WIBOR 6M is technically calculated, what types of data it relies on (price quotes rather than real transactions), what economic factors (inflation, unemployment, monetary policy) may influence its value, and finally the fact that his own lender took part in determining this index as a contributing bank.

The Court refuses to go that far. To understand why, one must grasp the regulatory architecture in place.

Directive 2014/17/EU on residential immovable property credit agreements already imposes on the lender a precise set of information obligations. The central tool is the ESIS (FISE), the European Standardised Information Sheet. This mandatory pre-contractual document must include in particular the elements for calculating the variable interest rate, numerical examples illustrating the consequences of a substantial rise in the rate, and a warning recalling that the total cost of the credit may change. The lender must also indicate the name of the benchmark index and of its administrator, as well as the potential repercussions for the consumer.

What the bank can delegate to the index administrator

But beyond these ESIS-related obligations, the Court refuses to extend the bank’s information duties to the technical methodology of the index. Why? Because that task falls to another actor: the index administrator.

Regulation 2016/1011 indeed requires every benchmark administrator to publish, in an accessible and unambiguous manner, a complete statement describing the essential characteristics of the index: the calculation methodology, the nature of the underlying data used, the rules governing the exercise of discretion, the procedures in the event of error or manipulation, and much other information besides. This statement is public and accessible to all.

The division of roles is therefore clear:

The bank may legitimately refer to the information published by the administrator, provided that it does not distort it or present it in a misleading manner. On the other hand, it is not required to give the consumer an exhaustive technical explanation of it. The Court even specifies that Directive 2014/17 provides for maximum harmonisation on this point: Member States may not impose on lenders pre-contractual information obligations other than those provided for by the Directive, which prohibits increasing the bank’s information burden beyond what the text requires.

Is the clause unfair because the bank contributes to setting the index?

Regulation 2016/1011: an exhaustive framework that protects both parties

J.J.’s third and most ambitious question was as follows: even if the bank had no specific obligation to provide information on the WIBOR methodology, does the fact that the bank is itself one of the contributors to the determination of this index not structurally create an imbalance to the consumer’s detriment?

The argument is economically intuitive: if the bank lending you money can, even partially, influence the rate at which it lends it to you, you find yourself in a position of structural inferiority. This is what J.J. called the “hidden margin”.

The Court examines this argument seriously before rejecting it, relying on the analysis of Regulation 2016/1011. To assess the potentially unfair nature of such a clause, the Court further recalls, in accordance with its earlier case law, in particular the judgment of 13 July 2023, Banco Santander, C-265/22, EU:C:2023:578, expressly cited at paragraphs 109, 112, 113, 114 and 131 of the present decision, that it is for the national court to assess, on the one hand, the possible failure to comply with the requirement of good faith and, on the other, the existence of a possible significant imbalance to the detriment of the consumer.

This Regulation constitutes, according to the Court, an exhaustive legal framework for the provision of benchmarks, the provision of underlying data by contributors, and the use of these indices in contracts. It imposes very precise obligations on each actor.

On the administrators’ side, the Regulation requires a robust, reliable and transparent methodology (Article 12), the publication of an accessible benchmark statement (Article 27), a complaints-handling mechanism (Article 9), and a system for reporting manipulation (Article 14).

On the contributors’ side (including banks such as PKO), the Regulation imposes reinforced governance requirements, the prohibition of conflicts of interest in the provision of underlying data (Article 16), rigorous internal controls guaranteeing the integrity and accuracy of the data, and the obligation to comply with a code of conduct drawn up by the administrator under the supervision of the competent national authority.

This entire system is supervised by the national regulatory authorities, which have extensive powers of investigation and sanction.

Faced with this framework, the Court formulates a presumption: where a benchmark can be regarded as compliant with the requirements of Regulation 2016/1011 at the time the contract is concluded, its incorporation into a loan agreement does not, in principle and on its own, create a significant imbalance to the consumer’s detriment. This presumption holds even if the lending bank is one of the banks contributing to the determination of the index.

The reason is simple: by nature, an interbank rate index must be determined by banks, which are intended to use them in their own contracts. Article 29 of the Regulation moreover expressly authorises supervised entities, including supervised contributors, to use benchmarks in their contracts. Finally, one contributing bank among others cannot be considered to exercise, on its own, a decisive influence on the value of the index.

The limits of this judgment: when the clause can still be challenged

It would be wrong to conclude that the Court closes the door entirely to any challenge. The judgment in fact lays down a presumption, not an absolute rule.

The presumption of absence of imbalance applies only if the index was in fact compliant with Regulation 2016/1011 at the time the contract was concluded. If a party could demonstrate that the index did not comply with this regulatory framework, for example because of proven manipulation of the underlying data or a governance failure, the situation would be different.

Moreover, the assessment of whether the clause is unfair must be carried out as a whole. The Court recalls that it is always relevant to compare the method of calculating the rate and its actual level with the rates usually applied on the market at the date the contract was concluded, for a loan of comparable amount and term, as well as with the statutory interest rate. A rate significantly higher than the market norm could, in this overall context, contribute to establishing a significant imbalance.

What is the significance of this judgment for French borrowers?

Although the case concerns Poland and the WIBOR index, the principles laid down by the CJEU apply to all Member States of the European Union. In France, variable-rate mortgages are most often indexed to Euribor (Euro Interbank Offered Rate), which is also a benchmark governed by Regulation 2016/1011 and classified among critical benchmarks.

This judgment provides several useful clarifications for French borrowers.

First, the variable rate clause of a mortgage can still be examined under unfair terms law. The fact that Euribor is a regulated index does not confer total immunity on it.

Second, the French bank has a serious information obligation, embodied mainly in the ESIS (FISE). If this sheet was not provided, or if it did not contain the mandatory statements on the possible effects of a rise in the rate, the clause might fail the transparency requirement and be exposed to a review on the merits of its unfairness.

Third, the bank is not obliged to explain in detail the methodology for calculating Euribor. On the other hand, if it provides additional information on the index, this information must be accurate and must not give a distorted picture of it.

Fourth, the fact that a bank is a contributor to the setting of Euribor is not sufficient, in itself, to establish an unfair imbalance.

Conclusion

The CJEU judgment of 12 February 2026 in Case C-471/24 makes a major contribution to mapping borrowers’ rights in variable-rate mortgage lending. It confirms that the unfair terms directive applies fully to these contracts, even where the index used is regulated at European level. It draws precisely the contours of the bank’s transparency obligation, carefully distinguishing it from the obligations borne by the index administrator. And it lays down a reasonable presumption: where an index complies with Regulation 2016/1011, its use does not automatically create an imbalance to the consumer’s detriment.

In doing so, the Court does not close the door to challenges. On the contrary, it indicates the path to take: verify the index’s compliance with the regulatory framework, make sure that the ESIS provided was complete and not misleading, and compare the actual level of the rate with the market conditions prevailing at the date of signature. This is precisely the type of analysis that the firm lebot-avocat.com is able to carry out for you, if you are wondering about the validity of the variable rate clause in your mortgage loan agreement.

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