{"id":4894,"date":"2018-02-23T12:16:39","date_gmt":"2018-02-23T11:16:39","guid":{"rendered":"https:\/\/lerins.com\/banking-law-the-lending-banks-duty-to-notify\/"},"modified":"2023-12-08T15:01:55","modified_gmt":"2023-12-08T14:01:55","slug":"banking-law-the-lending-banks-duty-to-notify","status":"publish","type":"post","link":"https:\/\/lerins.com\/en\/banking-law-the-lending-banks-duty-to-notify\/","title":{"rendered":"Banking law \/ The lending bank&rsquo;s duty to notify"},"content":{"rendered":"<p><strong>The new development:<\/strong> <strong>In order to assess its lender&rsquo;s duty to notify, a bank using an intermediary in banking transactions may rely on information collected by the intermediary without having to verify it, even if the bank has never met the borrower. <\/strong><\/p>\n<p>A bank provided a mortgage to a borrower which was to be used for purchasing a buy-to-let flat as part of a tax-optimisation scheme put forward by an <strong>investment advisory firm.<\/strong> After having stopped paying back their debts and having been summonsed before the courts in order to pay them, the borrower argued that the bank had failed in its <strong>duty to notify<\/strong>.<\/p>\n<p>In the view of the Court of Appeal, in order to assess its duty to notify as a lender, a bank using an intermediary in banking transactions may, unless there is an apparent irregularity, <strong>rely on information collected by intermediaries <\/strong>from borrowers about their financial capacity, without being required to verify whether they are accurate. This can be done even when banks have never met borrowers.<\/p>\n<p><em>Judgement of the Court of Appeal, 10 January 2018 No. 16-23.845 F-D<\/em><\/p>\n<p><strong>Our comments:<\/strong> Using an intermediary in banking transactions relieves lending banks from their duty to notify about borrowers. Indeed, <strong>unless there is an apparent irregularity<\/strong>, banks do not have to verify whether the information provided by borrowers to intermediaries is accurate. Therefore, intermediaries have to verify whether <strong>transactions are suited to borrowers&rsquo; financial capacities<\/strong>.<\/p>\n<p>This is only an applicable solution when a <strong>banking intermediary <\/strong>who has been authorised by the bank and whose work is governed by articles L 519-1 et seq. of the Monetary and Financial Code is being used.<\/p>\n<p><strong>Contacts:<\/strong> <a href=\"https:\/\/lerins.com\/en\/items-portfolio\/christine-vialars-en\/\">Christine Vialars<\/a> &#8211; <a href=\"https:\/\/lerins.com\/en\/items-portfolio\/laurent-garrabos-en\/\">Laurent Garrabos<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The new development: In order to assess its lender&rsquo;s duty to notify, a bank using an intermediary in banking transactions may rely on information collected by the intermediary without having to verify it, even if the bank has never met the borrower. A bank provided a mortgage to a borrower which was to be used [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":2027,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-4894","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-publication-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/lerins.com\/en\/wp-json\/wp\/v2\/posts\/4894","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lerins.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lerins.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lerins.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/lerins.com\/en\/wp-json\/wp\/v2\/comments?post=4894"}],"version-history":[{"count":0,"href":"https:\/\/lerins.com\/en\/wp-json\/wp\/v2\/posts\/4894\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lerins.com\/en\/wp-json\/wp\/v2\/media\/2027"}],"wp:attachment":[{"href":"https:\/\/lerins.com\/en\/wp-json\/wp\/v2\/media?parent=4894"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lerins.com\/en\/wp-json\/wp\/v2\/categories?post=4894"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lerins.com\/en\/wp-json\/wp\/v2\/tags?post=4894"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}