New rules for Spanish savings banks and banking foundations

Automatic summary, not yet reviewed

1. Savings banks are defined as credit institutions with a social purpose, focused on retail customers and small and medium-sized businesses. Their activity may not exceed the territory of one autonomous community, unless they operate in up to ten neighboring provinces.
2. Savings banks are governed by three bodies: the general assembly, the board of directors and the control committee. Being a member of these bodies is incompatible with elected political office and with senior public administration positions.
3. In the general assembly, depositors must hold between 50 and 60 percent of the general board members, and public administrations may not exceed 25 percent. The assembly must have between 30 and 150 members.
4. A majority of board of directors members must be independent directors, and all of them must meet the honorability, experience and good governance requirements that apply to bank directors.
5. A savings bank must become a banking or ordinary foundation if its total assets exceed 10 billion euros or if its deposit share in its territory exceeds 35 percent. It then loses its authorization as a credit institution.
6. Foundations holding at least 10 percent of the capital or voting rights of a bank, or able to appoint or remove a member of its board, are considered banking foundations and are subject to this law.
7. Banking foundations holding at least 30 percent of a credit institution must approve a management protocol and an annual financial plan, supervised by the Bank of Spain. If they exceed 50 percent or hold control, they must also create a reserve fund and an investment diversification plan.
8. Savings banks operating indirectly, through a bank, must become foundations within one year of this law taking effect.

Who it affects

• Retail customers and small and medium-sized businesses, the audience savings banks must serve.: Savings banks focus their financial activity on them and on their territory.
• Depositors of savings banks: They gain weight in the general assembly, with 50 to 60 percent of the general board members.
• Employees, founding entities and public administrations: Their representation in the general assembly is capped at maximum percentages.
• Foundations with stakes in banks: If they reach 10 percent of the capital or can appoint directors, they become banking foundations and take on management, transparency and supervision duties.
• Large savings banks and indirectly operating savings banks: They must become foundations and lose their status as credit institutions.

Words worth knowing

Entidad de crédito (credit institution)

A company authorized to take money from the public and grant credit, like a bank.

Impositor (depositor)

A person who has money deposited with an entity, for example in an account.

Fundación bancaria (banking foundation)

A foundation that owns at least 10 percent of a bank and is dedicated to its social work and to managing that stake.

Vocal independiente (independent director)

A member of a governing body who does not depend on any group with an interest in the entity and decides with objectivity.

Protectorado (guardianship authority)

The public body that oversees whether a foundation is legally set up and operating.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries