Frankfurt Administrative Court: BaFin's obligation to repay bank levies for 2011–2014

RegCORE Client Alert | German Regulatory Developments

QuickTake

On September 16, 2025, the Administrative Court of Frankfurt am Main (Ref. 7 K 3685/24.F; 7 K 3686/24.F; 7 K 3705/24.F) that the Federal Financial Supervisory Authority (BaFin) must repay the contributions to the restructuring fund for credit institutions levied on three banks (“bank levy”) in the years 2011-2014.

The court considered the group-related purpose of the special levy to have ceased to exist at the latest with the expiry of the bridge financing to the Single Resolution Fund (SRF) on January 1, 2024. It classified the levy as a special levy with a financing function, which is only permissible as long as there is a specific and ongoing group-related purpose. Since the legislature had not created a new purpose, there was no viable legal basis for the continued levy from that point on. The notices were therefore to be revoked, and the contributions refunded.

The judgments are not final; appeals and leapfrog appeals to the Hessian Administrative Court were allowed due to the fundamental importance of the case.VG Frankfurt, Urteil vom 16.09.2025.Show Footnote

Key takeaways

The court affirms the right to reopen the proceedings, to revoke the contribution notices, and to repay the contributions levied between 2011 and 2014. It qualifies the bank levy in legal terms as a special levy with a financing function, which, according to the case law of the Federal Constitutional Court, is only permissible as long as there is a specific and ongoing group-related earmarking.

This earmarking ceased to apply with the expiry of the bridge financing for the Single Resolution Fund on January 1, 2024, because there is no new legal regulation. The continued application of the levy without a specific purpose is therefore out of the question. The Chamber rejects the statute of limitations defense raised by BaFin, meaning that claims for reimbursement for the years 2011 to 2014 remain valid and can, in principle, still be asserted today. The judgments are not final, and appeals are still possible.VG Frankfurt/M.PM 17.09.2025.Show Footnote

Key considerations

The court strictly adheres to the guidelines of the Federal Constitutional Court on special levies. A special levy is only constitutionally legitimate as long as there is a specific and ongoing group-related purpose and the funds are used in a manner appropriate to the group. After the completion of the national transition phase to the Single Resolution Fund between 2016 and 2023, there was no new legal decision on the use of the contributions previously levied as of 1 January 2024.Single Resolution Board.Show Footnote The earmarking requirement was thus no longer applicable, and there was no question of the levy continuing to apply without any specific purpose.

In weighing up the interests, the Chamber gives priority to the interest of the institutions liable to pay contributions in rescinding the contributions notices over the protection of existing rights and legitimate expectations, as special levies are subject to parliamentary approval and strict earmarking. Another important practical point is that the Chamber rejects the statute of limitations defence. Claims for reimbursement for the years 2011 to 2014 are therefore not barred by time limits and can continue to be asserted by the institutions concerned, depending on the status of the notice and proceedings. This could result in considerable repayment obligations and organisational burdens for BaFin.

This may give banks the opportunity to generate significant liquidity inflows, which could be of strategic importance, particularly for smaller institutions. In terms of legal policy, the decision increases the pressure on legislators to promptly and clearly readjust the earmarking of special levies in future in order to avoid constitutional risks and widespread refundsVG Frankfurt/M.PM 17.09.2025.Show Footnote

Outlook

The decisions are not legally binding, and BaFin is expected to appeal. Clarification by the Hessian Administrative Court or the Federal Administrative Court appears likely. Institutions are advised to systematically review their contribution notices from 2011 to 2014, secure their claims for reimbursement including interest and depending on their risk appetite, initiate application or legal proceedings.

Further parallel lawsuits are to be expected, and the broad impact could trigger significant repayment volumes, which could place a noticeable strain on the supervisory authority and the federal budget. In terms of legal policy, there is increasing pressure to readjust temporary special levies at an early stage and in a clear manner by law or to replace them with alternative, clearly earmarked financing instruments.

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