Discover the 5 major challenges facing banking law in 2025: the duty to warn, APR, seizures, LCB-FT compliance and digital banking.
1. Reinforcing the bank's duty to warn
Reminder: the duty to warn that a credit institution may have applies to an uninformed borrower or guarantor.
The years 2023-2024 have confirmed a trend towards a strict framework of information and warning obligations for banking institutions.
For example, the Court of Cassation has refused to extend the duty to warn to an assessment of the appropriateness and/or risks of the transaction financed (Cass. com., 11 December 2024, no. 23-15.744).
The credit institution's obligation is therefore limited to :
- check that the loan is in line with the borrower's financial capacity;
- informing him of the risk of indebtedness resulting from the granting of the loan.
The same obligation applies to an uninformed guarantor.
In a ruling handed down by the 1st Civil Division of the Court of Cassation on 1 March 2023 (no. 21-20.970), the Court reiterated that an uninformed guarantor must be provided with clear information about the risks involved, failing which the guarantor's undertaking will be void. The bank must ensure that the commitment is proportionate to the guarantor's assets and income.
On the other hand, the duty to warn presupposes that the loan is repayable by instalments, which excludes the loan in fine. This solution makes sense when the stakes of such a loan are different. Unlike the borrower of a standard loan, the borrower of a bullet loan only repays the capital in one instalment. The risk of indebtedness is therefore quite different, and the profile of borrowers is not the same.
As for proof of compliance with the duty to warn, the Cour de cassation has ruled quite strictly that simply providing standardised documents is not enough. It is therefore up to the bank to provide proof of a personalised exchange tailored to the customer's profile (Cass. com., 15 November 2023, no. 22-10.142).
Specifically, we recommend :
- to complete credit information forms,
- ensure that the preliminary loan offer is drawn up with clear, precise and complete information,
- all communicated before the loan offer is signed.
2. Errors in APRs and loss of entitlement to contractual interest
Reminder: Le APR (Annual Percentage Rate of Charge) is an essential part of any credit offer. It gives the borrower an idea of the total cost of creditincluding :
- The nominal interest rate
- Application fees
- Compulsory insurance costs (where applicable)
- Ancillary costs (guarantees, expert reports, etc.)
The APR guarantees transparency of the real cost of the loan and makes it easier to compare offers.
However, an error affecting the APR does not ipso facto entail the penalty provided for, which is forfeiture of the right to contractual interest.
Admittedly, the Cour de cassation has reiterated that any error affecting the APR, however minor, may result in forfeiture of the right to contractual interest (Cass. 1re civ., 24 May 2024, no. 23-11.038).
However, the action for forfeiture of the right to interest must not be time-barred and it must be possible to prove that the APR was incorrect.
This dispute, which is largely fuelled by consumer associations, is forcing banks to be more vigilant when drawing up loan offers.
The most frequent errors found :
- Mortgage fees are not included in the APR calculation;
- omission of intermediary fees ;
- incorrect application of rates ;
- the omission of the rate of insurance contribution actually levied ...
3. Disputes relating to seizures and allocations
In 2024, case law strengthened the requirement of strict notification of the debtor in the case of attachment for payment. A creditor cannot be satisfied with incomplete or imprecise notification.
This strictness is intended to protect the debtor against abusive or incorrectly notified seizures (Cass. 2e civ., 14 September 2024, no. 22-21.515).
Good to know: Our law firm has won a number of cases on this legal basis.
Litigation also focuses on the statute of limitations for enforced claims.
It should be remembered that under Article L111-4 of the French Code of Civil Enforcement Procedures states ".the enforcement of enforceable titles referred to in 1° and 3° of article L111-3 may only be pursued for a period of 10 years, unless the actions for recovery of the debts set out therein are time-barred after a longer period.".
The enforcement judge of the Marseilles Court of First Instance ordered the release of a seizure carried out to obtain payment of an injunction to pay dated 2 October 2009, which had become time-barred (Marseilles Court of First Instance, 9th chamber jex, 12 September 2024, no. 23/10735).
To find out more: see our case study on the subject.
4. Compliance and LCB-FT: European regulatory pressure steps up a notch
Reminder: La banking compliance refers to all the procedures put in place by banking institutions to ensure their compliance with :
- The internal ethical standards (ethics charter, codes of conduct
- The laws (national and international)
- The financial regulations (ACPR, BCE, AMF)
Combating money laundering and the financing of terrorism (AML/CFT) is one of the pillars of compliance.
Since the publication of the EU's anti-money laundering legislative package in 2023, French banks have been subject to a heightened duty of vigilance in the management of their customers' accounts.
French law transposed these obligations in an order dated 7 December 2023, requiring banks to :
- systematically identify the actual beneficial owners ;
- Set up a risk scoring system for customers and transactions;
- Strengthen in-house training on detecting fraudulent schemes.
These obligations are now monitored by the ACPR, which issued several sanctions in 2024 against banks that had failed in their duty of care (ACPR, decision of 15 February 2024, Sanction no. 2024-03).
Horizon of best practice for banks :
✅ Regularly update internal procedures.
✅ Automate the detection of atypical transactions using artificial intelligence tools (scoring).
✅ Train sales and compliance teams in new risks (crypto-assets, participative financing).
✅ Organise a continuous monitoring on international sanctions (e.g. OFAC in the USA).
5. The development of digital services: new opportunities, new risks
The rise of electronic signatures and open banking (thanks to DSP2) means that banks need to provide legal security for their new digital services.
In particular, proof that the borrower has been properly informed in a digital 100 % process must be anticipated in order to withstand subsequent litigation (see Cass. com., 17 January 2024, no. 22-23.657).
To find out more
- Consult our calendar of forthcoming banking law courses.
- See our practical information sheet: "Sources of banking law explained".
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