Recent judgments on abusive clauses oblige institutions and professionals who offer personal loans to consumers residing in Spain to review and adapt the clauses to legal constraints. Find here practical advice to implement.
Banking and Finance law addresses the legal footing for the structuring and formalization of structured finance, refinancing and capital market operations. It ranges from asset financing through loans or lines of credit, with or without collateral, to consumer credit or leasing agreement operations.
Consumer loans in Spain are monitored by government regulatory agencies for their compliance with consumer protection regulation. The Bank of Spain (together with the Spanish National Securities Exchange Commission) is the government body that exercises general supervisory powers over domestic credit institutions.
Fintech is on the rise and competing with financial institutions. Fintech firms offer consumers benefits such as more and easier options for funding. However, there is a catch. While offering benefits to consumers who would be unable to receive such benefits via traditional financial institutions, these fintech services also create risks for consumers.
The incorporation of a new company in Spain to undertake consumer credit activities does not require a specific regulatory license given that the new company will not be incorporated as a credit institution.
When considering whether an exemption applies to a consumer credit agreement (which would take the agreement outside the scope of regulation of the CCA), care must be taken to consider the precise terms of the relevant exemption.
One of the basic pillars of the Consumer Credit Agreement Law in Spain (Law 16/2011) is the development of the regulation of the pre-contracting process; that is, the steps prior to a creditor and a consumer entering into a consumer credit agreement.
In Spain, Law 16/2011 derogated the previous legal regime (dating back to 1995) and transposed Directive 2008/48 of 23 April 2008 on credit agreements for consumers (the “Directive”) into Spanish law. Law 16/2011 reproduces the provisions of the Directive. Furthermore, where the Directive has failed to include specific provisions, the old regime has been maintained or even extended to new scenarios, with the aim of increasing the protection granted to Spanish consumers.
Spain possesses numerous advantages to welcome start-ups in the FinTech sector. Spain can benefit from the consequences of Brexit if it decides to create a favourable field for such start-ups.
Law 16/2011 transposed the Consumer Credit Directive on consumer credit agreements to Spain. The objective of the law is to foster the integration of the consumer credit market and grant a high level of consumer protection by focusing on transparency and consumer rights.
A consumer credit agreement (CCA) is an agreement whereby a creditor grants or undertakes to grant credit in the form of a deferred payment, loan, credit facility or any other equivalent way of financing in favour of a consumer.