Directors and managers of financial institutions such as banks, insurers, investment firms, and lenders face decisions shaped by a new Independent Administrative Authority focused on consumer protection in the financial sector. The draft government proposal would allow sanctions up to 250,000 euros for minor violations or up to a million euros for serious crimes. A notable feature is the public condemnation: once published in the Official State Gazette (BOE), the identity of the violator, the nature of the breach, and the sanction imposed would be disclosed. These advances are part of the government’s plan to create a new institution that will be accessible to EL PERIÓDICO from the Prensa Ibérica group—highlighting a move toward greater transparency in regulatory enforcement. (Source: Government draft)
In the version reviewed by the Council of Ministers in April, individual accountability for organizations remains, but there is still a single sanctions regime, albeit with special provisions. After receiving dozens of claims, the Ministry of Economy established the authority and simultaneously reduced the size of sanctions that can be levied, emphasizing proportionality and the impact on the financial client and the market as a whole rather than penalties targeted at individual customers. (Source: Government draft)
Serious sanctions, therefore, have been trimmed. The maximum potential penalty was reduced from five percent of turnover to two percent, with a new cap of two million euros, while temperate sanctions stay at one percent but with a maximum cap of five hundred thousand euros. Violations are classified as serious or minor based on how many customers are affected, the repetition of the behavior, and the overall effect on customer confidence and financial system stability. It may even be considered a petty crime when deficiencies are persistent. The concept of late or erroneous compliance remains a binding decision of the new institution. (Source: Government draft)
Deterrent effect
The department led by Nadia Calviño has also encouraged organizations to take the issue seriously, ensuring they do not ignore or delay pre-contractual and contractual documentation (including that relating to banking, savings, CNMV oversight, and the General Directorate of Insurance). A Regulatory Impact Analysis accompanies the draft; the government argues that the deterrent effect of enforcing documentation requirements outweighs potential burdens on the industry and ultimately benefits consumers and the market. (Source: Government draft)
Another important shift concerns the institution’s stance on good practices and financial conduct. Good practice suggestions or procedures auditors apply to relationships with clients are not binding unless included in binding standards. Annual summaries of such practices will be informational rather than mandatory, and the agency’s decisions on these matters will not be binding on companies, removing doubts about constitutional issues for firms. (Source: Government draft)
Mandatory codes
Despite potential confusion over terminology, the Code of Good Practice—alongside the 2012 mortgage framework and the 2021 ICO-backed restructuring of business loans—will compel organizations to adhere when they voluntarily join the relevant legal framework. Agency decisions on this matter will be binding, with limits set in April for claims below 20,000 euros. The same binding effect applies to the Bank’s Strategic Protocol to Strengthen Social and Sustainable Commitments, which includes care initiatives for the elderly and is slated for expansion to improve access to cash in Spain. (Source: Government draft)
The draft and supporting memoranda were circulated to several advisory bodies. The publication of state opinions will be treated as a formal step, and compensation provisions between businesses and customers may be set at 100 to 2,000 euros when a claim lacks economic value. Such decisions will be non-binding expert reports if the client pursues court action; consumer associations may file claims on behalf of injured parties but cannot pursue collective action. The president and vice president of the institution must be approved by an absolute majority of Congress. (Source: Government draft)