The Constitutional Court (VfGH) has rebuffed Heinrich Staudinger, the shoe and furniture producer from Waldviertel (Lower Austria). The businessman believes that businesses should be independent from bank loans and freed from debt. The examination of his complaint was rejected.
Since 1999, Mr Staudinger has been able to collect 3 million euros from family, friends and customers, providing them with suitable interest rates and reliable repayment. As security, Staudinger has two warehouses worth 4 million euros and a further two in construction.
He argues that banks are reluctant to give loans to small innovative companies and that crowd funding would allow people to invest directly into whichever businesses they choose, without the need of a middleman. This has led many to refer to him as “the Robin Hood of the twenty-first century”.
The Financial Market Authority (FMA) argued that such large loans need to be categorised as professional loans and instructed Mr Staudinger to stop the unlawful acceptance of deposits. The FMA have threatened the businessman with a fine of 50,000 Euros if he should not give in.
The Constitutional judges now decided that it is objectively justified that the legislator ties “deposit banking (…) to the license obligation of banks” and reserve banks the right to do so.
The VfGH also thinks that it is justified that the legislator does not make exceptions in order to prevent abuse.
The Constitutional Court rebuffed Mr Staudinger’s complaint and decided to hand over the case to the Administrative Court.