Spain’s Banks are Using Coronavirus Crisis Government Loans to Sell Life Insurance

SPAIN’S banks have been accused of trying to sell financial products to people looking to get government-backed loans to help them through the economic uncertainty caused by the coronavirus.

The country’s competition regulator, the CNMC, has said that it is investigating reports that some banks are trying to demand that life insurance policies are taken out for a loan to be authorised.

Spain’s government had agreed to guarantee up to €100 billion of loans for companies and self-employed people to reduce the problems caused during the country’s State of Alarm lockdown.

The state-run credit agency is underwriting up to 80 per cent of loans to the self-employed and to small companies, whilst the limit is up to 70 per cent for larger firms.

The Association of Banks has said that it had told its members that the government-supported loans cannot be bundled in with the sale of any other financial products.

The CNMC said it has received over 50 complaints in the last week over the sale of services linked to the coronavirus crisis.

It’s also investigating whether undertakers have been charging a fair price for funeral services and if makers of vital sanitary products such as hand gels and ethanol have been ripping people off.