Responsible lending

Under the current regulatory framework, institutions are required to act responsibly when granting loans. But what exactly does this requirement involve?

First, when they offer such products, institutions must act honestly, impartially and professionally. That is, they must take into account, among other things, your personal and financial situation, and your preferences and objectives, pointing out any condition or characteristic of contracts which is not conducive to those objectives. Therefore, it is essential that the information you give your bank about yourself is complete and accurate.

Moreover, before the transaction is approved, your bank must carefully assess your solvency. The bank’s decision should preferably be based on your ability to meet the scheduled payments, not only on the expected value of the collateral you provide.

In addition, it is essential that the institution informs you properly about the features of the products best suited to your requirements, so that you can give the matter due thought and make comparisons, in order to make an informed, rational and prudent decision.

Finally, it should be made clear that the obligation that institutions are under to act responsibly when granting loans is far from being merely symbolic. It is a principle that institutions must increasingly take into consideration when formulating their commercial policies.