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Santander’s Loan Practices Trigger Complaints in Scandinavia

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Banco Santander SA has been faulted by the financial regulator in Denmark for its handling of some consumer loans.

The reprimand, and an order to improve, follows two complaints against Santander Consumer Bank in Denmark relating to its treatment of car loans, the Financial Supervisory Authority in Copenhagen said on Monday. The regulator has given Santander three months to comply. Santander didn’t immediately comment on the FSA’s statement, when contacted by phone.

The Danish regulator criticized the bank’s handling of changes to fees and interest rates for loans based on benchmark rates, and the extent to which Santander complied with standard practices.

According to an earlier filing this month by the Danish Financial Complaint Board, one of the cases relates to a borrower who took out a car loan with Santander in 2014, based on the Copenhagen Interbank Offered Rate. The borrower complained that the bank failed to cut the interest rate on the loan when Cibor fell.

After the SNB floated the Swiss franc in 2015, speculators turned to Denmark, triggering an intense peg defense.

Three-month Cibor has been negative since early 2015, when the central bank fought back an attack against Denmark’s euro peg by flooding the market with kroner and cutting the benchmark policy rate to minus 0.75 percent.

Santander’s Nordic operations are based outside Oslo, the Norwegian capital. It bought GE’s Nordic assets in 2014 and has defined the region as a focus area. After more than a decade there, it has local assets of roughly $18 billion and some 1,300 employees, mostly focused on providing car and so-called leisure loans that target the consumer market.

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