BBVA offers commitments to get the Sabadell merger approved; UK’s FCA to consult on extension of car finance complaints

Spanish lender BBVA announced a series of commitments on Wednesday aimed at gaining antitrust approval from the country’s competition regulator CNMC for its proposed hostile takeover of Banco Sabadell.

BBVA said the commitments aim to “ensure financial inclusion, strengthen lending to small and medium-sized enterprises and improve competitiveness”, to facilitate speedy approval of its merger with Sabadell.

Key commitments include maintaining branch operations in underserved areas, preserving commercial terms for individuals and SMEs in regions with limited competition, and ensuring that existing lines of credit for SMEs are maintained for 18 months after the merger. BBVA also promised to maintain the current total lending volume for companies that rely exclusively on both banks.

Last week, the CNMC, citing concerns over potential branch closures and reduced lending to SMEs, said BBVA must undergo a longer antitrust reviewwhich could delay the approval of a merger until well into 2025.

—

UK’s Financial Conduct Authority calls for feedback on proposal to extend deadlines for lenders to deal with complaints about non-discretionary car finance commissionsfollowing a Court of Appeal ruling that could spark Britain’s biggest consumer banking scandal since the Payment Protection Insurance mis-selling scandal.

The ruling found it illegal for car dealers to earn fixed or discretionary commissions without obtaining the customer’s consent, potentially affecting millions of car finance deals.

In one statement on Thursday the FCA said extending the deadline for final responses to car finance complaints would enable lenders to deal with the expected high volume of complaints more effectively, ensuring consistent and orderly outcomes for both consumers and businesses. The Swedish Competition Authority proposes an extension to May 2025 or December 2025.

The FCA first announced in January that it was reviewing whether car finance customers had been overcharged due to the historical use of discretionary commissions. As part of this review, the eight-week deadline for lenders to provide final responses to relevant customer complaints was paused.

FCA chief executive Nikhil Rathi said the regulator aims to ensure “consumers who are owed money get it in an orderly manner” while maintaining a competitive car finance market.

Banks have started to set aside for potential costs, with Santander UK setting aside £295mn and Lloyds Banking Group allocating £450mn. Moody’s estimates that industry costs could reach £30 billion.

—

U.S. Sen. Elizabeth Warren on Wednesday called on the Federal Reserve to keep Wells Fargo’s $1.95 trillion asset cap in place until the bank fully addresses its risk management and compliance deficienciesaccording to Reuters. She also called on the Fed to publicly disclose any third-party reviews the bank has submitted as part of its efforts to get the cap lifted.

In a letter to Fed Chairman Jerome Powell and Vice Chairman for Supervision Michael Barr, seen by the news service, Warren argued that the cap, which was put in place in 2018, should remain in place until Wells Fargo “can demonstrate that it can properly manage the risks associated with with running a large bank”.

According to a Bloomberg report in September, Wells Fargo had submitted a third-party review of its risk and control enhancements to the Fed in an effort to end the asset cap. The cap was imposed after the bank’s fake account scandal in 2016 and other regulatory failings.

Wells Fargo CEO Charlie Scharf has previously said that strengthening the bank’s risk and control framework remains a top priority. The bank has successfully persuaded US regulators to lift six regulatory consent orders since 2019.

—

Former billionaire investor Sung Kook “Bill” Hwang was sentenced Wednesday to 18 years in prison for his role in the collapse of Archegos Capital Managementwhich caused over $10 billion in losses for Wall Street banks.

US District Judge Alvin Hellerstein handed down the sentence in Manhattan after a jury convicted Hwang in July of 10 felony charges, including wire fraud, securities fraud and market manipulation. “The amount of loss that was caused by your conduct is greater than any other loss that I have dealt with,” Hellerstein said before announcing the sentence.

Archego’s rapid implosion in March 2021 shocked Wall Street, with lenders bracing for default. Prosecutors had asked for a 21-year sentence, $12.35 billion in forfeiture and restitution for the victims, describing the case as “a national disaster.”

Hellerstein postponed a decision on forfeiture and restitution, and the hearing was set to continue Thursday.