(Bloomberg) — Deutsche Bank AG, UniCredit SpA and DZ Bank won their fight with Germany’s industry watchdog to get back their share of a €2.3 billion ($2.7 billion) restructuring fund they were forced to pay into after the 2008 financial crisis. 

The Frankfurt Administrative Court on Tuesday ordered financial regulator Bafin to pay back the lenders, the court said in a statement in Tuesday. The authority can appeal.

The cases are part of a quarrel between the German finance industry and the government over what should happen with the funds stemming from the bank levy that’s no longer needed as the European Union has set up a bloc-wide solution.

Hundreds of lenders have asked Bafin to pay back the money. The government has plans to shift it to a fund to support small and medium-sized enterprises. In the Frankfurt suit, Deutsche Bank is seeking €605 million, UniCredit wants €334 million back and DZ is asking for €64 million.  

“As Bafin has put it itself: it’s now only administrating the funds, not using it for any purpose,” one of the judges said at a hearing in the case earlier on Tuesday. “Lawmakers have let the legal situation slip into uncertainty with eyes wide open.”

In their ruling, the judges had stressed the strict constitutional requirements for extraordinary levies that target only a limited number of payers. The money collected from the banking levy no longer serves any purpose after the relevant legislation elapsed at the end of 2023 and Germany didn’t pass rules on what should now happen with it. 

The banking levy was collected from 2011 until 2014. Later, the funds were given to the EU’s new mechanism as a bridge loan but that was limited until the end of 2023. 

A Bafin representative had told the court that while it’s “unfortunate” that Germany’s parliament hasn’t yet passed new legislation, that is now being worked on. Only lawmakers can decide on the matter, and it’s not in Bafin’s powers to pay back the money, the regulator argued.  

The cases are: Az. 7 K 3685/24 et al.

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