Spanish Banks Probed for Selling Life Cover With Crisis Loans
Spanish Banks Probed for Selling Life Cover With Crisis Loans
(Bloomberg) --
Some Spanish banks have been pushing applicants for state-backed loans designed to mitigate the coronavirus crisis to buy other financial products, according to the antitrust regulator CNMC.
The CNMC said in a statement on Tuesday that it’s investigating whether some banks have been demanding an additional guarantee, in most cases the purchase of life insurance, in exchange for selling a loan.
Spain has agreed to guarantee as much as 100 billion euros ($109 billion) of loans for companies and the self-employed. The program is a key part of the government’s program to protect businesses suffering steep drops in revenue as steps taken to combat the pandemic shut down the economy.
The state credit agency is backing 80% of loans channeled to smaller companies and those who are self-employed, and 70% of those for larger corporations.
The Spanish Association of Banks, or AEB, said on Monday that it had clarified to its members that the state-backed loans can’t be linked to the sale of other products.
The CNMC said it has received more than 50 complaints in the past week related to the sale of services linked to the coronavirus crisis. It said it is also investigating whether undertakers have been charging a fair price for funeral services and if producers of sanitary products such as hand gels and ethanol have been charging excessive prices.
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