And who might be behind it all (see below article – 26 page pdf attached ...attachment
to third link ‘for the file’)
From One Scam to Another: How Banks in Spain Intend to “Compensate” 1.4 Million Fleeced Homeowners
By Don Quijones, Spain & Mexico, editor at WOLF STREET.
14 January 2017
“Poisoned offers” to settle, backed by the government.Spain’s biggest banks, it seems, will never learn — not even when the highest court of the land, the European Court of Justice (ECJ), rules against their dodgy practices. The ECJ ruled just before Christmas that Spain’s major banks would have to refund all the billions of euros they had surreptitiously overcharged borrowers as a result of the so-called “mortgage floor-clauses” that were unleashed across the whole home mortgage sector in 2009 [A Nightmare Before Christmas for Spanish Banks].
These floor clauses set a minimum interest rate, typically of between 3% and 4.5%, for variable-rate mortgages, which are a very common mortgage in Spain, even if the Euribor dropped far below that figure. In other words, the mortgages were only really variable in one direction: upwards! While this is not illegal, most banks failed to properly inform their customers that the mortgage contract included such a clause. The ECJ’s ruling was an emphatic victory for the almost 1.4 million borrowers who had been fleeced out of thousands of euros, many of whom have spent years trying to recoup the funds through Spain’s creaking legal system. Yet even now, the banks, many of which are struggling against a backdrop of negative interest rates and tightening margins, seem loath to part with the cash.
The president of Spain’s sixth biggest bank, Josep Oliu, today called the ruling against the bank’s floor clauses an “attack against the banks,” likening claimants to “roguish swindlers.” His bank, Sabadell, has been accused of pressuring its mortgage customers to sign a “pact of silence,” by which the customers, knowingly or not, pledge never to speak publicly about the conditions of their mortgage — not even to their lawyers — and in return the bank removes the floor clause from the mortgage, without reimbursing a single cent of what it owes.
Even today, with the law firmly on the borrowers’ side, “poisoned offers” continue to proliferate, warns consumer association Facua-Consumidores en Acción. “It was entirely predictable that the same entities that had shafted consumers out of millions with their abusive mortgage contracts would try to do the same despite the fact that the European Court of Justice has ruled that they must reimburse absolutely all the money they have overcharged customers,” said Facua’s spokesperson, Rubén Sánchez. Some banks are pressuring customers to sign documents seemingly designed to strip them of their rights to take the banks to court while reimbursing just part of the money they’re owed.
As usual, the banks have the Rajoy government firmly on their side. At first his coalition government considered passing a law that would have forced all the banks to reimburse all the money they had overcharged customers, as the ECJ had ruled. Unsurprisingly, such an approach was firmly opposed by the banking sector and was duly shelved. The government then came up with a much more bank-friendly offer that included a voluntary, non-binding arrangement, which all big banks tend to love. However, the proposal was deemed too lenient by the coalition government’s “socialist” faction, which fears being seen by voters as coming down too softly on the banking sector, especially at a time when social-democratic parties are fading into irrelevance all over Europe.
In the latest offering, which could be enacted by Royal Decree as early as Saturday, the banks are not obligated to reimburse affected customers, but merely to enter into bilateral negotiation with them. The two sides will have a maximum period of three months (well over double the initial 36 days tabled) to reach a mutually satisfactory arrangement. If, after that time, the customer is still unsatisfied, he or she can launch legal action against the bank. However, if in the end the amount awarded is less or equal to the amount initially offered by the bank, it is the customer that must cover the legal costs.
The problem with such an approach is that it treats the banks and their customers as equals, says Fernando Herrero, the secretary general of Adicae, an association representing financial end users. It’s a ludicrous proposition given the vast gulf in financial knowledge and expertise of the two sides, not the mention the fact that for the banks “negotiating means flagrantly deceiving the consumer, signing away his or her rights.” The new proposed legislation has two main goals: to prevent the collapse of a major, cash-strapped bank (such as, say, this one) from the pressure of having to reimburse all its customers all at once, while also reducing the strain on Spain’s already over-burdened judicial system. According to Herrera, the government hasn’t even bothered to contact consumers or their representatives; “it only liaises with the banks.”
And it tells: the government’s new proposal will allow banks to repay customers not only in cash, which will be the most heavily taxed option available, but also by any other “equivalent means.” That apparently includes offering customers “financial products” (subordinated bank bonds, anyone?) of the equivalent value of the money owed, or the possibility of reducing the interest or principal payable on the mortgage, which will have a much less destructive short-term impact on the bank’s balance sheets.
Banks will also be able to offer to swap a customer’s variable mortgage (with floor clause) for a fixed rate one. The consumer association OCU has advised consumers to reject these types of offers, many of which include clauses preventing signatories from undertaking future legal action against the bank in question. Whatever happens in the coming months, one thing is certain: regardless of what EU law may hold, the banks will do whatever they can to ensure that they refund as little as possible of the billions of euros they surreptitiously overcharged their customers. And they will have the government’s consent throughout. By Don Quijones, Raging Bull-Shxx. The bank-bailout business rages on. Read… UBS Warns: Spain’s “Most Italian Bank” Runs Out of Options
Minister Sherry meets IOSCO Secretary General
8 May, 2008
http://www.findlaw.com.au/news/5397/minister-sherry-meets-iosco-secretary-general.aspx
Federal Corporate Law Minister, Senator Nick Sherry, has met with the Secretary General of the International Organisation for Securities Commissions (IOSCO), Greg Tanzer, in Madrid, Spain. IOSCO is the international organisation for financial and market regulators, with more than 100 regulators as members. The Australian Securities and Investment Commission is a full IOSCO member, and Australia's representative. Minister Sherry and Mr Tanzer discussed a wide range of issues currently faced by market regulators world-wide and the important role being played by Australia in multilateral responses.
Minister Sherry and the Secretary General also discussed:
- the ongoing consequences of events in the U.S. subprime mortgage market and the global credit and liquidity environment;
- the Federal Government's support for IOSCO's role in the international implementation of the recent Financial Stability Forum recommendations;
- IOSCO's current re-drafting of its Code of Conduct Fundamentals for credit rating agencies;
- trends in the operation and regulation of securities markets, including European and North American multi-operator environments;
- financial markets transparency issues and
- IOSCO's approach to tax haven arrangements, including the ongoing Vanuatu tax avoidance investigation Project Wickenby.
15 June 2009 Mr Greg Tanzer Dear Mr Tanzer
https://www.afma.com.au/afmawr/_assets/main/LIB90021/O28-09... · PDF file
Mr Greg Tanzer . Secretary General . IOSCO . Calle Oquendo 12 . ... SPAIN . By email: UMP@iosco.org . Dear Mr Tanzer . Consultation Report on Unregulated Markets and ...
July 29, 2011
Mr. Daniel Heller
Head of Secretariat
CPSS
Bank for International Settlements
4002 Basel
Switzerland
Email: cpss@bis.org
Mr. Greg Tanzer
Secretary General
IOSCO
Calle Oquendo 12
28006 Madrid
Spain
Email: fmi@iosco.org
Dear Messrs. Heller and Tanzer:
Please find attached the response from the Payments Risk Committee1 to the CPSS-IOSCO consultative report, Principles for financial market infrastructures. The Committee is a private sector industry group comprised of major users of payments, clearing and settlement services and is sponsored by the Federal Reserve Bank of New York. The Committee identifies and analyzes risk issues in payments, clearing, and settlement of financial transactions, seeks to foster broad industry awareness and discussion, and develops input on public and private sector initiatives. We are pleased to have the opportunity to comment on the important issues addressed in this report and would welcome further dialogue as appropriate.
Yours sincerely,
Robin Vince
Chairman
1 The PRC’s objective is to foster enhancements to the safety and resiliency of financial market infrastructures, including steps to strengthen the clearing and settlement of financial transactions. The PRC institutions submitting this letter include Bank of America, Bank of New York Mellon, Bank of Tokyo-Mitsubishi UFJ, Citibank, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street, UBS and Wells Fargo. More information on the PRC and its members is available at: http://www.newyorkfed.org/prc/