AARP (and related discussions on Swiss Franc loans) (II)

Our bank had absolutely zero influence over the USD exchange rate. Apartment prices dropped simply because demand cratered.

Exactly. There aren't any laws against it.

Richard Taylor3 said:Look, your loan had that Swiss Franc currency clause, and you happily signed on the dotted line, probably laughing at the people who were choosing loans in Euros. Now, everyone else is stuck picking up the tab for your debt—especially the people who never even took out a loan themselves. It’s almost poetic, isn't it? It feels like pure communism.

A loan tied to a currency clause, coupled with the fact that the bank clearly knew they were predatory toward consumers.

I think generalizing this as people "carelessly taking out loans just for lower rates" is a bit much. These Swiss Franc Loans were essentially shoved down people's throats as their only option. It was basically presented as, "This is the only credit you qualify for, so take the Swiss Franc or start biking to work."

As for who is actually paying for what happened today—it's the bank. They made an absolute killing off the surge in the Swiss Franc exchange rate, which allowed them to pump that cash back into the money markets and rake in interest. So, the one who actually profited is the bank, and even after everything is settled, they'll likely still be sitting on a massive surplus.

Michelle Nelson4 said:Don't be like that—I actually listened!
You are absolutely right; there were plenty of public warnings stating that the dollar was pegged closely to other major currencies and that taking out loans in a Swiss Franc were significantly riskier.
When I walked into the bank to apply for my loan, they tried to pitch me the Swiss Franc option as being "cheaper," but I told them no thanks—I wanted the more expensive one in dollars. They just gave me this look, like, "Oh, so you're choosing the safe route."

The exchange rate barely moved, even dipping slightly for a while, roughly $2.50/USD—but regardless, I was still paying my monthly installments in dollars, calculated precisely based on the current rate, even if the bank ended up receiving a bit less. My interest rate was tied to Euribor, so as Euribor fluctuated, my interest rate changed accordingly. You really have to read the fine print on what you're signing...

Exactly!!

And now I’m sitting here listening to some folks from consumer advocacy groups claiming they’re still being screwed over just because they aren't in the same boat as the people who took out loans in USD!!!

Well, you chose the Swiss Franc loan specifically because you didn't want the USD!!

Everyone knew the risks involved... they just naively assumed those risks wouldn't actually happen to them.

Jamie Morgan72 said:A loan tied to a currency clause, coupled with the fact that the bank clearly knew they were predatory toward consumers.

I think generalizing this as people "carelessly taking out loans just for lower rates" is a bit much. These Swiss Franc Loans were essentially shoved down people's throats as their only option. It was basically presented as, "This is the only credit you qualify for, so take the Swiss Franc or start biking to work."

As for who is actually paying for what happened today—it's the bank. They made an absolute killing off the surge in the Swiss Franc exchange rate, which allowed them to pump that cash back into the money markets and rake in interest. So, the one who actually profited is the bank, and even after everything is settled, they'll likely still be sitting on a massive surplus.

Have you actually sat down with the bank's financial statements and tracked those specific line items for foreign exchange gains? Like, do you know exactly how much they were? For all the major banks involved? Over what specific timeframe?
Or perhaps you've spent some time digging through the Federal Reserve regulations regarding bank currency exposure—knowing exactly what the limits were back then and if any institutions were cutting corners? Did the Federal Reserve flag any irregularities? That part is actually quite easy to verify if you know where to look.

I'm sure you have all this documented and ready to go, since you're making such bold claims about them reaping "extra" profits solely based on the exchange rate (which, by the way, would require some serious quantification to define what "extra" actually means here).

I remember asking these exact same questions on this forum years ago and never got an answer. Maybe now, finally, I'll get some clarity…

Michelle Nelson4 said:Don't be like that—I actually listened!
You are absolutely right; there were plenty of public warnings stating that the dollar was pegged closely to other major currencies and that taking out loans in a Swiss Franc were significantly riskier.
When I walked into the bank to apply for my loan, they tried to pitch me the Swiss Franc option as being "cheaper," but I told them no thanks—I wanted the more expensive one in dollars. They just gave me this look, like, "Oh, so you're choosing the safe route."

The exchange rate barely moved, even dipping slightly for a while, roughly $2.50/USD—but regardless, I was still paying my monthly installments in dollars, calculated precisely based on the current rate, even if the bank ended up receiving a bit less. My interest rate was tied to Euribor, so as Euribor fluctuated, my interest rate changed accordingly. You really have to read the fine print on what you're signing...

When were you actually pulling those funds, and which bank were you using?
Back when those loans were exploding, it was almost impossible to tell how your interest rate was actually calculated or what benchmark it was pegged to. It felt like it just changed "because the bank said so." Honestly, even five years into my payments, I couldn't get a straight answer from anyone. They didn't even bother coming up with a clear formula for new loans until around 2011.

It’s like everyone just rushed into the hype, listing rates as some kind of Swiss Franc LIBOR plus a fixed margin, then they'd just unilaterally tear up contracts once the Swiss Franc LIBOR hit basically zero.

There was actually a discussion about this earlier in this thread...

Casey Cook10 said:When were you actually pulling those funds, and which bank were you using?
Back when those loans were exploding, it was almost impossible to tell how your interest rate was actually calculated or what benchmark it was pegged to. It felt like it just changed "because the bank said so." Honestly, even five years into my payments, I couldn't get a straight answer from anyone. They didn't even bother coming up with a clear formula for new loans until around 2011.

It’s like everyone just rushed into the hype, listing rates as some kind of Swiss Franc LIBOR plus a fixed margin, then they'd just unilaterally tear up contracts once the Swiss Franc LIBOR hit basically zero.

There was actually a discussion about this earlier in this thread...

With Hypo, it was actually for a car—more like a lease if we're being technical about the loan type—back in 2007. The Swiss Franc Loan offer was tied to LIBOR, offering a better rate, but I turned it down. At that time, I also had a mortgage from 2005, also through Hypo, but it was in Euros and tied to EURIBOR.
They didn't terminate my contracts. My interest rate fluctuated now and then, and the exchange rate was just what it was. Unilateral termination sounds like something that would definitely be grounds for a lawsuit.

I'm not saying it was easy to find an offer where the interest rate was defined that way, but the main point is that people were publicly warned about the risks of the Swiss Franc multiple times—it wasn't just buried in some obscure corner of a Federal Reserve bulletin. Since most people didn't have a choice in how the interest was structured, they at least got to choose the currency. And you could certainly find competitive rates.

And honestly, I don't see any fundamental difference in the principle of a loan tied to the Swiss Franc versus any other foreign currency. It's like how for a long time, huge amounts of savings weren't kept in Dollars, but specifically in foreign currencies. Does anyone really think banks are smarter than the general public?

Michelle Nelson4 said:Have you actually sat down with the bank's financial statements and tracked those specific line items for foreign exchange gains? Like, do you know exactly how much they were? For all the major banks involved? Over what specific timeframe?
Or perhaps you've spent some time digging through the Federal Reserve regulations regarding bank currency exposure—knowing exactly what the limits were back then and if any institutions were cutting corners? Did the Federal Reserve flag any irregularities? That part is actually quite easy to verify if you know where to look.

I'm sure you have all this documented and ready to go, since you're making such bold claims about them reaping "extra" profits solely based on the exchange rate (which, by the way, would require some serious quantification to define what "extra" actually means here).

I remember asking these exact same questions on this forum years ago and never got an answer. Maybe now, finally, I'll get some clarity…

By pure coincidence, I happened to glance at a certain bank's financial reports, yes. Look, the Federal Reserve doesn't care about the Swiss Franc—but the bank, on the other hand, does, because they leveraged the Swiss Franc to pad their coffers for future Euro-denominated placements. By the way, the regulator for those types of placements isn't even the Federal Reserve, given its jurisdiction.

When I say "extra" profit, I mean anything outside the realm of what was predictable given the historical movement of the Swiss Franc. Before 2008, things didn't oscillate like this. However, the red flag signaling this "extra" windfall was the fact that starting in 2005, the Swiss Franc began acting as a "safe haven" currency—something the banks recognized immediately, yet failed to mention to consumers. Financial institutions are well aware of what being a "safe haven" implies for their bottom line.

I have my facts just as clearly laid out as you have your delusions about people knowingly choosing loans that would eventually cost them three times the original amount—because, obviously, everyone's life goal is to pay triple for a loan.

Thanks, but it’s pretty obvious from your very first sentence that you don't have a clue about anything I actually asked.

Michelle Nelson4 said:With Hypo, it was actually for a car—more like a lease if we're being technical about the loan type—back in 2007. The Swiss Franc Loan offer was tied to LIBOR, offering a better rate, but I turned it down. At that time, I also had a mortgage from 2005, also through Hypo, but it was in Euros and tied to EURIBOR.
They didn't terminate my contracts. My interest rate fluctuated now and then, and the exchange rate was just what it was. Unilateral termination sounds like something that would definitely be grounds for a lawsuit.

I'm not saying it was easy to find an offer where the interest rate was defined that way, but the main point is that people were publicly warned about the risks of the Swiss Franc multiple times—it wasn't just buried in some obscure corner of a Federal Reserve bulletin. Since most people didn't have a choice in how the interest was structured, they at least got to choose the currency. And you could certainly find competitive rates.

And honestly, I don't see any fundamental difference in the principle of a loan tied to the Swiss Franc versus any other foreign currency. It's like how for a long time, huge amounts of savings weren't kept in Dollars, but specifically in foreign currencies. Does anyone really think banks are smarter than the general public?

So basically, there was exactly one bank that had a clearly defined reference interest rate written right there in the loan agreement.

The others didn't. And even those people complained when the Swiss Franc LIBOR started dropping. Still, they're being sued, so maybe they were doing something else to make sure their rates wouldn't drop down to 2% or less like they should have based on how the Swiss Franc LIBOR was moving.

Here's an example...

Wedding boy? Seriously? Is that what we're calling them now? Just some kid caught up in the whole chaotic mess of a ceremony. Honestly, I don't know how anyone does it without losing their mind. Who even has the energy for all that pomp and circumstance anymore? It's just more noise in an already loud world. kaže:
It’s such a lazy generalization to say people were just "snatching up easy loans with lower interest rates." Like, give me a break. Those Swiss Franc Loans weren't some free choice handed out on a silver platter; they were shoved down people's throats. The banks basically cornered them. It was this condescending "take what we're offering or walk to work on a bicycle" kind of vibe. You're either going to take this specific deal because we say you aren't creditworthy enough for anything else, or you can just deal with it. Total racket, right?

It’s probably more accurate to say:
People didn't want something sensible, you know? They didn't want a modest car. No, they wanted those massive, overpriced SUVs they couldn't actually afford. They maxed out their credit cards and took on insane debt just because they were too embarrassed to show up to work on a bike. Why bother being practical when you can look rich and go broke instead?

Wedding boy? Seriously? What even is that supposed to mean? Is this some kind of joke or did I just miss a whole chapter of life? Honestly, everything feels like a weird joke lately. Just one thing after another. You think you know what's coming, then boom—something ridiculous pops up out of nowhere. Who comes up with this stuff? Probably someone who hasn't seen sunlight in weeks. Makes you wonder about people, doesn't it? Anyway, whatever. Total nonsense. kaže:
Calling this "extra" profit is a joke. Given how the Swiss Franc has historically behaved, anyone expecting these kinds of returns should have seen it coming. We haven't seen swings like this since before the 2008 crash. Why act surprised now?

A quick Google search on the Swiss Franc exchange rate tells you everything you need to know—it wasn't even close. It was obvious back then that the rate was unusually favorable compared to other currencies. That was literally the whole point of taking out a Swiss Franc Loan in the first place. People just wanted to pay off their car notes without breaking the bank. Why would anyone do otherwise? $433 Instead of... $567 Relative to the Euro.

Bark, bark, bark... go ahead and keep howling if you want, but even in a country with a judicial system this broken, people are actually winning their cases—though I'm sure they only get those rulings because they’re just "nice" enough.

To wrap this all up, EVERYONE WITH AN UNCONVERTED LOAN NEEDS TO FILE A LAWSUIT! Personally, I haven't been affected by these specific messages, but please, don't be reckless and leave thousands upon thousands of your hard-earned dollars sitting there in those accounts.

I'm sharing this full message from Alexandria on Facebook:

POST-PROTEST UPDATE

A few disgruntled folks are calling for protests again—demanding we take action, complaining, venting, asking if AARP will cover individual legal costs, criticizing how activists work, telling me I’m being too impatient with people, giving me unsolicited advice, you name it...

After spending 12 years volunteering with AARP—after answering at least 40,000 questions about the Swiss Franc Loan via email, DMs, comments, town halls, writing hundreds of articles for various media outlets, doing countless interviews, and representing consumer interests in the US Congress (where I was actually among the top 15 most active representatives based on speeches and activity)—it’s funny how there are still people who just don't get it.

Honestly, anyone else in my shoes would have walked away by now and left it to someone else.

But since I’ve taken this on, I’m going all the way. I intend to serve the public in the truest sense of the word, even though the public can be so demanding, ungrateful, and quick to forget everything anyone has done for them—that mass of people we call "the nation." There's an American streak of envy that's hard to describe without getting into it, so I won't bother.

Anyway, I’ll give a quick recap of what happened following the protest.

We put out a public call for everyone unhappy with the court rulings to join us for the protest on January 4th, and we organized transportation based on interest. We couldn't exactly rent enough buses to carry 500 people if 450 of those seats were going to end up empty, right?

We specifically emailed our members who had previously opted-in to receive communications, because thanks to privacy laws, we don't just blast emails to everyone—only to those who gave us the green light.

In the end, we had 1,500 people show up at the protest. Personally, I was worried we'd have fewer. 1,500 is actually a pretty solid number.

Only about 600-700 people responded to our initial inquiry. We spent quite a bit of money, and the result was really just a slight bump in media coverage.

The judges aren't listening to us even 5% of the time, and don't even get me started on the politicians.

For the record, I was never the lead organizer of this protest—not before, not now, and I won't be in the future. Regardless, I did my part and tried to help as much as my skills and capacity allowed.

So much energy went into this by the activists, and those 1,500 protesters are a real reflection of the kind of society we have here in America.

Out of 125,000 people who were wronged, and 55,000 families dealing with these conversions—of whom 20,000 have filed lawsuits—we had 1,500 people turn up for the protest.

To anyone still calling for more protests, I'd say this: wake up from your winter slumber and realize that Americans tend to be pretty complacent and inert, thinking things will just sort themselves out magically.

Despite everything, the protest was great—well-organized, articulate, and focused—all thanks to the incredible work of AARP.

The Supreme Court will eventually make its ruling; at this point, I only care about *what* the decision is, not *when* it happens. I'm over the waiting game.

If you haven't filed your lawsuit by June 14th at the latest—well, I'll feel sorry for you. I’ve given everything I have, maybe even more than that, just to make sure people understand their rights.

So, which part is actually illegal here? Is it the variable interest rate itself? Or is it the fact that they’re tied to the Swiss Franc?

I mean, look at us now—we have plenty of loans in US Dollars that also feature variable interest rates.

Olivia Davis8 said:So, which part is actually illegal here? Is it the variable interest rate itself? Or is it the fact that they’re tied to the Swiss Franc?

I mean, look at us now—we have plenty of loans in US Dollars that also feature variable interest rates.

Basically, any loan issued before 2011 had its rates set by a simple "bank board decision," which makes them totally illegitimate and grounds for a lawsuit if those rates were ever adjusted.

The fact that people are actually filing lawsuits against banks suggests there’s also another type of foundation out there—basically a firm that handles all the legal battles on your behalf, takes a 25% cut of the settlement, and covers the upfront litigation costs themselves.

Can anyone hook me up with a list of lawyers who actually know their way around these Swiss Franc Loan messes? I’m staring down the barrel of a deadline to sue the bank and I really need someone who won't just waste my time.

Get in touch with AARP on Facebook—they’ve actually got a full list put together.

And seriously, you guys need to move fast. Before any legal action kicks off, you’ll need to grab all those documents from the bank—everything from your transaction history to the repayment schedules—and getting that stuff sorted can easily take up to two weeks.

I've got a hearing coming up this September for my lawsuit against JPMorgan Chase regarding that old Swiss Franc loan I took out... I'm honestly not sure if they ended up calling in the bank representative who handled my account back then.

Has anyone else gone through something similar, or is there a certain way these things usually play out in court...

Thanks!

Carl Roberts3 said:I've got a hearing coming up this September for my lawsuit against JPMorgan Chase regarding that old Swiss Franc loan I took out... I'm honestly not sure if they ended up calling in the bank representative who handled my account back then.

Has anyone else gone through something similar, or is there a certain way these things usually play out in court...

Thanks!

A bunch of lawyers told me that based on some Supreme Court ruling, the borrower has to testify... and I'm pretty sure they said the bank rep has to show up too.

I mean, there's definitely a conflict of interest going on here, but I guess it’s actually a pretty fascinating look into how things work.