COVID-19 Sectoral Moratoria
The Spanish government recently regulated the regime of certain private moratorium agreements that financial institutions and their customers may enter into, supplementing the official mortgage and non-mortgage moratoria available to individuals who are in a situation of economic vulnerability.
These moratoria arise from private-sector agreements, in which institutions have participated through their representative associations, which regulate certain aspects of payment deferral.
The regulations on sectoral moratoria revolve around the following assumptions:
- Financial institutions: for the purposes of this moratorium, financial institutions are deemed to be credit institutions, specialised lending institutions, real estate credit lenders, payment institutions and electronic money institutions.
- Transactions: all kinds of loans, credits and financial leases.
- Repayment: the amount deferred (which will continue to accrue the interest agreed in the initial agreement) may be repaid by extending the maturity of the transaction for the same length of time as the duration of the moratorium or by redistributing the amount of the instalments, without extending the term.
- What can and cannot be agreed: in these moratoria, the extension —under the same conditions as initially agreed— of the payment protection or loan repayment insurance can be agreed for the same period in which the maturity is extended. In contrast, it will not be possible to
- Change the agreed interest rate.
- Charge expenses or fees, unless it is an interest-free loan and the effect of the expense or fee does not involve an increase in the Annual Percentage Rate (APR) agreed in the initial agreement, or it is the premium for the extension of the insurance contract mentioned in the previous section.
- Be marketed together with any other linked or combined product.
- Establish personal guarantees or collateral in addition to those contained in the original contract.
- Prior information: a simplified prior information regime has been established. In addition to the draft agreement regulating the moratorium, the institution must provide the customer with information on the legal and economic consequences of the deferral —with or without extension of the term— and, if applicable, on the conditions of the extension of the insurance.
- Formalisation: in order to be entered in the corresponding Registry, the moratorium agreement must be recorded in a public document, when, under the general rules, it is so required.
The institution can fulfil this formality without the debtor also having to go to the notary, provided that the moratorium only agrees on a deferral of the principal or of the principal and interest through an extension of the maturity and provided that the customer does not expressly request to be present.
If the institution unilaterally approaches the notary, the notary must provide the debtor with a simple copy of the moratorium agreement free of charge.
- Publication: the sectoral agreements used must be communicated to the Banco de España for publication on its website. They are available at this linkAbre en ventana nueva: