The Bank Enforcement Order has been liquidated


What was the Bank Enforcement Order?

The Bank Enforcement Order (BTE) was a document that confirmed the existence of a given bank's claim against a person taking a loan or performing other banking activity. If such a person, regardless of the reason, failed to fulfill the contract, the bank then issued a Bank Enforcement Order. It is true that such a BTE could constitute the basis for the bailiff to initiate enforcement against the debtor, it had to be provided with an enforcement clause by the court. One might be tempted to say that the declaration of enforceability of the BTE was merely a formality. The court usually only checked the correctness of the debtor's personal data and signatures, and then made sure that 10 years had not passed since the date of termination of the loan agreement. If all the above conditions were met correctly, and therefore there were no formal errors, the court granted the enforcement clause to such BTE by stamping the document. It is worth mentioning at this point that the court did not examine the case on the merits, without going into the structure and history of the debt, terms of the contract, etc.

Liquidation of the Bank Enforcement Order

At the session of the Sejm held in September 2015 the Banking Act was amended to liquidate the Bank Enforcement Order. According to the introduced solution, the inability to issue enforcement orders by banks will make it necessary for banks to conduct enforcement proceedings in court proceedings. Pursuant to the Act, such a solution is intended to ensure that the debtors of these institutions have the right to a fair and substantive resolution of the case by the court. The above solution is the implementation of the verdict of the Constitutional Tribunal (file No. P 45/12), which in its judgment unequivocally stated that the right to issue Bank Enforcement Orders is a privilege provided only for banks. Such a solution grossly violates the principle of equal treatment due to the fact that the bank - even though it is only a party to the contract, gains the right to issue judgments replacing the court judgment without considering the matter in substance.

The amendment assuming the liquidation of the Bank Enforcement Order entered into force on November 27, 2015. Despite the fact that the resignation from issuing BTEs may seem like a radical solution, it certainly will not significantly weaken the collateral of banks granting loans. Banks have to find other collateral for the money borrowed, and in this regard, it will most likely be the use of blank promissory notes. From the point of view of customers, such a solution does not make much difference compared to the no longer functioning BTE, because a promissory note confirmed in court will be as effective a method of collecting receivables as BTE. Only the entire procedure will be significantly extended, because as a reminder, let us add that the court had only 3 days to consider the BTE.