Today, it seems almost impossible to deny that banking entities play an essential role in the development of the contemporary capitalist world.
During the last decades, the increase in the number and complexity of actions carried out by these financial organizations that regulate society has led to an increase in situations of abuse towards consumers and users.
Definition of banking law
Banking law is the branch of law that deals with studying and legislating on matters relating to the regulation of the operation of banks.
These matters are usually classified according to three operations:
- Passive or deposit-taking. We call passive operations those that are related to checking accounts, savings accounts, investment accounts, etc. These occur when a banking organization receives and holds customers’ money in exchange for a percentage of the interest earned on the loan of their money.
- Active or bank loans and credits. In them, a banking entity gives an individual as a loan the amount of money requested in exchange for charging a specific interest rate.
- Neutral or banking services. We speak of neutral operations or banking services when a banking organization allows its clients to make payments, transfers, deposits, investments or other types of services without the bank necessarily receiving a dividend for it.
Why is banking law important?
As we have mentioned previously, it is extremely important that people can trust a professional who ensures that good practice is regulated in the professional practices of the banking entities with which they usually interact on a daily basis. Below, we develop in several more specific points the importance that banking law has in maintaining the health of your finances:
- Serves as a legal guide. Thanks to banking law, we can establish a series of guidelines that banks must follow to behave appropriately with clients, ensuring the transparency and fidelity of their actions.
- It acts as a watchdog to ensure that various banking practices are carried out in the correct manner within the legal framework.
- It allows people and entities to stay up to date with the constant changes to which commercial relationships are subject thanks to the ability to adapt and constantly update cases related to banking law.
Rules that make up banking law
As it is not considered one of the classic branches of law, banking law, as opposed to civil, criminal or labor law, is not regulated as such in a specific regulatory body.
This is why banking law is traditionally considered part of commercial law, although due to the close relationship it maintains with the public sector, it is often also affected by rules related to administrative law.
Depending on the area of regulation in which it is regulated, we can classify the set of rules that make up banking law as follows:
Constitutional norms
Here we would find the example of Article 149.11 of the Spanish Constitution, which explains the exclusive competence of the state with respect to foreign exchange, exchange and management of credits, banking and insurance.
Commercial standards
They are established in several articles of the Commercial Code (175 et seq.) and are, among others, responsible for regulating credit companies.
Administrative rules
Relating to the legal organization of the financial activity of banking entities, such as, for example, those related to transparency.
Tax rules
They relate financial and banking entities to the payment of taxes.
Criminal regulations
Relating to criminal offenses that may arise due to scams related to banking products.
Although we have mentioned the most important ones, due to the current socioeconomic context, banking law is also widely related to regulations within the labor, civil, international, public law, etc.
The banking and financial sectors are, today, some of the most important economic actors in a nation marked by the constant flow of money that moves within capitalist societies. In turn, these rapid monetary movements have made the inequality of conditions and power between banking entities and consumers increasingly evident. This is where the figure of the lawyer specializing in banking law arises.