Arion Bank's breach of the ban on arrangement fees on small business loans with variable interest rates

An investigation into Arion Bank's compliance with the provisions of Article 2. The investigation into Arion Bank's compliance with the provisions of Article 2 of the settlement agreement it made with the Competition Authority in 2017 has concluded with Arion Bank admitting to breaching the ban on redemption charges on variable-rate loans to small businesses in certain specific cases. The bank also agrees to pay fines in relation to the matter and has implemented appropriate measures to minimise the impact of the conduct and ensure more robust compliance with the provision going forward. Furthermore, the bank acknowledges that the implementation of its obligations under clause 2 of the settlement could have been better, with regard to the provision of information to customers who had an interest in the matter.

The provision which the bank breached is set out in an agreement which forms the basis of the decision. No. 24/2017, Measures to enhance competition in general banking services for individuals and small businesses. Under the provision of Article 2 of the agreement, prepayment charges on variable-rate loans to individuals and small businesses were prohibited.

Landsbankinn and Íslandsbanki made settlements similar to Arion bank in 2017, concerning measures to strengthen competition in general commercial banking services for individuals and small businesses. The investigation which has now led to the aforementioned fine concerned only Arion Bank and focused solely on the bank's compliance with Article 2 of the settlement, which prohibits early repayment charges on variable-rate loans for individuals and small businesses.