Business · Companies · 10 hrs ago
Banco de España fines Sabadell €16.5 million over mortgage-linked insurance
Spain’s central bank fined Banco Sabadell €16.5 million over the way it sold some mortgages.
The penalty concerns mortgages made conditional on buying insurance, a practice the bank regulator says broke rules and failed to treat customers impartially.
The sales took place from January 2022 to March 2023, and the regulator said many transactions were affected.
Lenders may require insurance to protect repayment, but customers must be allowed to choose the insurer.
The fine is final through the administrative process, but Sabadell is challenging it in the Supreme Court, so it is not yet final in court.
The case concerns rules intended to prevent banks from tying loans to insurance policies from a particular provider.
Banco de España fined Banco Sabadell €16.5 million for making mortgage lending conditional on buying an insurance policy.
The regulator classified the conduct as a very serious infringement involving prohibited tied sales and failure to act impartially toward customers.
The practices affected a high number of mortgage transactions and were repeated, according to the regulator.
The fine is final through the administrative process, but Sabadell is appealing it at Spain’s Supreme Court.
The sales practices were detected between January 2022 and March 2023.
- Who
- Banco Sabadell was fined by Banco de España.
- What
- The regulator imposed a €16.5 million fine over mortgage-linked insurance sales.
- When
- The practices were detected between January 2022 and March 2023. The fine became known in April; the article does not state the year.
- Where
- Spain.
- Why
- Banco de España said Sabadell made mortgage lending conditional on taking out insurance, breaching rules on tied sales and impartial treatment of customers.
This story does not have two clearly opposing sides.
Banco de España detected the joint sale of mortgages and insurance during this period.
The €16.5 million fine became known.
The administrative fine is final, but Sabadell is appealing it at the Supreme Court.
- Fine
- €16.5 million
- Regulator
- Banco de España
- Bank
- Banco Sabadell
- Relevant period
- January 2022–March 2023
- Legal status
- Final administratively; under appeal at the Supreme Court
1 source
What people are saying
The entity has failed to meet the obligations set out in Law 5/2019 of 15 March, regulating real estate credit agreements, concerning prohibited tied sales practices and the duty to act impartially while respecting the interests of its customers, failures that are especially significant given the number of transactions affected and the repeated nature of the conduct.