Spain’s 'Indignados' protest foreclosures by closing their bank accounts

Protesters lined up in front of Bankia in Madrid to close their bank accounts. Photo published on Twitter by DRY Madrid.

Just around the corner from Madrid’s Puerta del Sol plaza, the epicentre of Spain’s “Indignados” movement, which is celebrating its first anniversary, dozens of protesters lined up outside a bank Monday to close their accounts. Our Observer explains they did this to protest what they see as Bankia’s unfair seizures of homes that owners can no longer pay their loans on.

In front of Bankia’s central branch Monday, clients voiced their anger at seeing their taxes going to bail out a bank that has seized many of their homes, or is on the verge of doing so. Some even cut up their credit cards and bank papers right on the sidewalk, as police officers looked on.

A Bankia client cuts up his bank account booklet. Photo published on Twitter by LorenaMN.

Bankia, Spain’s fourth-largest bank, was formed in 2010 from seven weak savings banks in a bid to salvage them. At the time, it received 4.5 billion euros from the state to stay afloat. However, it has not fared well since, as it has been unable to unload the vast amounts of real estate it owns. The government came to Bankia’s rescue last week by buying a 45 percent stake in the bank, effectively taking control of it. Analysts expect the government to have to inject billions more into the ailing bank in the near future.

A client closes her Bankia account. Photo courtesy of Lainformacion.com.

"For each client who went in asking for the bank to reduce the amount of debt on their homes, another client threatened to close their account"

Lola Fernandez is a member of the Indignados movement. As part of the Indignados’ working group on housing in Madrid, she helped organised Monday’s protest.

When we arrived at the bank, the police were already there waiting for us. They wouldn’t let us in, even though many protesters were clients. It took two hours of negotiations before they let those of us who were clients in, two by two. They asked to see identification and wrote down the names of everyone who went in. This scared some people off – many Indignados have received fines before for taking part in unauthorized protests, and not everyone can afford to pay them.

A policeman asking a protester for identification. Photo courtesy of Lainformacion.com.

We organised ourselves in such a way that for each client who went in asking for the bank to reduce the amount of debt on their homes, another client threatened to close their account. The bank took down all these complaints; now we have to wait and see what happens. Hopefully, the bank will agree to negotiate with the indebted individuals.

By our estimates, about 50 people closed their accounts at this branch Monday [this number could not be confirmed with Bankia, as Tuesday was a bank holiday in Spain], while about 100 protested outside. Many more have closed their bank accounts at different Bankia branches all week. We feel that all Spaniards have the right to protest Bankia, since the government has bailed the bank out with taxpayer’s money.

Policemen lined up in front of Bankia Monday. Photo published on Twitter by Osec.

“When a house is seized, the former homeowners shouldn’t have to keep paying the bank”

Bankia is not the only bank kicking people out of their homes, but we chose to focus on it because we feel it’s been the most noxious. In Madrid, it is responsible for the vast majority of recent home foreclosures. And out of all the big banks, we have found it’s the least open to negotiating to reduce individual homeowners’ debt.

Under Spanish law, when homeowners default on their homes, banks can seize their property, and if the sale of the home doesn’t cover what the homeowners owe, they have to pay the difference back to the bank. Of course, with Spain’s housing collapse, the banks aren’t selling these properties for much, so people are in huge amounts of debt for houses they no longer own. What we want is for a change in the law, so that when a house is seized, that’s it, the homeowners are free of their debt. But in the meantime, we’re pushing for banks to individually negotiate with homeowners to lower their debt, and, instead of banks letting all these houses they now own just sit there empty, to let people keep living in homes for a “social rent” – 30 percent of their salary.

People in Spain are pretty furious about the government bailing Bankia out, after everything they’ve done, so the least they could do is make efforts to negotiate. In the meantime, we’re encouraging people all over Spain to switch their money to more ethical banks.

Photo published on Twitter by Elena Herrera.

Comments

Crazy bank foreclosures

Submitted by stevebaz on Tue, 15/05/2012 - 20:52.

I have never understood why banks do not Let the property that they have foreclosed on to the occupier at an affordable rent. It's absolutely crazy - the banks, on selling in what is a buyers market, cannot recoup the mortgage money by the sale. Yet the bank would recoup its loss (a loss of its own making because it lent the money in the first place) over the long term even if it meant the children of the house went on to pay off the mortgage. There must be so many creative ways in which this problem could be solved - but then banks are not known for real creative thinking, just the quick buck variety.