Rabobank objects to AFM's multi-million dollar fine over high mortgages

Rabobank has lodged an appeal against the fine of 12 million euros imposed by the Financial Markets Authority (AFM) last month. This was reported by the AFM and confirmed by Rabobank. According to the regulator, the bank breached regulations when granting customized mortgages, which put customers at risk of taking out excessive loans. The bank considers the penalty to be "disproportionate".

With a bespoke mortgage, a lender is allowed to deviate from the maximum lending standard as long as it provides a good explanation as to why this is appropriate. The AFM ruled that Rabobank had not taken "sufficient care" in this respect. In many cases, taking out a mortgage loan was left to the personal interpretation of the Rabobank employee concerned, the market regulator said in its penalty notice in December.

The AFM had carried out a random sample which showed that Rabobank's mortgages were "higher than the maximum that could be taken out based on income". Customers who took out these loans were also left with high payment obligations for a long time, the supervisory authority found. The mortgages should have been granted, but only if it was reasonably certain that they were justified, the AFM said.

After receiving the fine, Rabobank announced that it was already considering an appeal. According to the bank, the sample carried out by the AFM was not representative of the entire mortgage portfolio. Rabobank does not agree with the AFM's conclusion that "standards were structurally violated" and considers the amount of the fine to be "disproportionate".