The Supreme Court of Spain today ruled that non mortgage overdraft and non-payment fees from banks can be more than 2% above the base rate.
The ruling came after a test case by Santander bank (which it has now lost) and is based on EU rules.
The sentence rules that in personal loans, which are not mortgages, taken out by private individuals, defaulting fees that are more than 2% above the base rate are abusive and must not be implemented.
The Court also ruled that if you are charged more than 2% on the unpaid amount, then the whole amount charged is invalid and the consumer is not liable for any additional fee for having defaulted on their payment.
A third decision by the Court in the same ruling says that boilerplate bank contracts cannot be abusive, and any clause in said contract that establishes a default fee of over 2% is likewise invalid. However, the Court made an exception for personally negotiated contracts in which the 2% limit has been personally agreed in exchange for a concession from the bank; these types of clauses remain legal.