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What it is

Rules for sanctioning and supervising credit institutions

BOE step 7 of 7 · Passed

It is a government bill. Introduced by the Government. It was introduced on 23 December 1987. Introduced by: GOBIERNO.

Official title: Government bill on the discipline and intervention of credit institutions.

Follow this law

Source: Congreso de los Diputados, file 121/000071· updated 11 Nov

Automatic summary, not yet reviewed

  1. It creates a common sanctioning regime for credit institutions and for people holding management or direction positions in them, with violations classified as very serious, serious and minor.
  2. It sets the penalties: for very serious violations, a fine of up to 1% of own funds or revocation of the authorization; for serious ones, public censure, compensatory deposits or a fine; for minor ones, private censure or a fine. Responsible managers can face fines, suspension or disqualification.
  3. It divides powers: the Bank of Spain opens case files and imposes penalties for serious and minor violations; very serious ones are sanctioned by the Minister of Economy and Finance, and revocation of authorization by the Council of Ministers.
  4. It bans performing activities reserved to credit institutions or using their names without authorization, with fines of up to five million pesetas, rising to ten million if the activity continues after a formal warning.
  5. It allows the Bank of Spain to intervene in an institution or replace its administrators when it is in an exceptionally serious situation endangering its own funds, stability, liquidity or solvency.
  6. It regulates financial leasing operations: minimum terms of two years for movable property and ten for real estate, a purchase option for the user, and the tax treatment of the installments.

Who it affects

  • Credit institutions (banks, savings banks, credit cooperatives and others): They are subject to a common regime of violations and penalties, and to the control and inspection of the Bank of Spain.
  • Managers and directors of those institutions: They can be personally sanctioned with fines, suspension or disqualification if they are responsible for violations.
  • Any unauthorized person or company: They may not use the names or perform activities reserved to credit institutions, on pain of fines.
  • Insurance companies: The same sanctioning regime and the measures of intervention and replacement of administrators are extended to them, with adaptations.
  • Autonomous Communities (Comunidades Autónomas): They may exercise sanctioning powers over savings banks and credit cooperatives, respecting the basic principles of the Law.

Words worth knowing

Entidad de crédito (credit institution)
A company that takes funds from the public as deposits or loans and uses them to grant credit, such as banks, savings banks or credit cooperatives.
Recursos propios (own funds)
The institution's money and reserves, used to cover possible losses.
Intervención (intervention)
A measure by which the administration appoints supervisors who must approve the institution's actions to protect its solvency.
Arrendamiento financiero (financial leasing)
A rental contract for an asset with an option to buy it at the end of the contract.
Coeficiente de recursos propios (own funds ratio)
The minimum required ratio between an institution's own funds and the risks it takes.

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

Where it stands

How far did it get?

It took 7 of 7 steps. It reached BOE, and today it is passed.

  1. Introduced23 December 1987Someone registers the text in the Congreso.
  2. Admitted12 January 1988The Bureau of the Congreso accepts it and, for a members’ bill, the plenary decides whether to consider it.
  3. Amendmentsno dateGroups propose changes.
  4. Committeeno dateA committee goes through the text in detail.
  5. Plenaryno dateAll 350 deputies vote.
  6. Senateno dateThe Senate can pass it, amend it or veto it.
  7. BOEno dateIt is published in the Official State Gazette (BOE) and comes into force.
See the 2 official steps on a timeline
Dec 198711. 23 December 1987: Presentación22. 12 January 1988: Calificación

Was there a plenary vote?

We have no plenary vote linked to this law in the Congreso’s data.

What happens next

What happens now?

It is law, or will be once published in the BOE. It comes into force on the date its own text sets.

Published in the BOE: Law 26/1988, of July 29, on the Discipline and Intervention of Credit Institutions.

Sources

Where does all this come from?

  • The data comes from the open files of the Congreso, the Senate and the BOE, unaltered.
  • Each deputy’s province is the one of their seat on the day of the vote.
  • We only say “passed” or “rejected” when the majority needed is certain; otherwise we say which side had more votes.

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