Iceland Banks Face $3.3 Billion Loss in Debt Relief Lawsuits

Iceland’s banks are facing $3.3 billion in additional writedowns as the nation’s biggest homeowner protection group throws its weight behind borrowers suing their lenders for indexing mortgages to inflation.

Banks, which lost a similar case in 2010 for linking loans to foreign exchange rates, have already forgiven $2.1 billion in debt since Iceland’s 2008 crisis wiped out its financial industry. In two separate lawsuits, banks are now being sued for selling inflation-linked loans that allegedly clash with European Economic Area laws banning unfair terms in consumer contracts.