The Dutch Authority for the Financial Markets has fined Santander Consumer Finance EUR 3.7 million for irresponsible consumer lending practices in the Netherlands, marking the second time the regulator has penalised the Spanish banking group for the same category of misconduct in the country. The AFM announced the penalty following a supervisory study of ten customer credit files from 2021.
The AFM's investigation found that in five of the ten reviewed files, Santander had extended credit on terms the regulator considered irresponsible given the borrowers' financial circumstances. In four of those ten files, the bank was found to have gathered insufficient information about customers' financial positions before issuing loans — a failure that regulators said undermined the robustness of the affordability assessment required under Dutch consumer credit legislation.
EARLIER 2019 PENALTY
The 2024 fine of EUR 3.7 million compares with the EUR 1.1 million penalty the AFM levied on Santander in 2019 for irresponsible lending in the Netherlands.
Responsible lending obligations in the Netherlands require consumer lenders to gather adequate documentation of a borrower's income, expenses, and existing financial commitments before approving a loan. The AFM found that Santander's data-gathering fell short of that standard in four of the ten sampled files.
REMEDIATION
The regulator has not publicly indicated whether further supervisory measures are planned following the latest fine. The AFM said SCF is taking measures to prevent a recurrence and has compensated some of the consumers who may have received excessive credit.