1. What Epistemic Justice Means in Banking

Coined by Miranda Fricker 2007, epistemic injustice is injustice done to someone specifically in their capacity as a knower.

There are two kinds: testimonial injustice and hermeneutical injustice.

Testimonial injustice is unfairness related to trusting someone's word... when someone is ignored, or not believed, because of their sex... or identity.

In finance, this article applies this to study gender and racial disparity in financial markets. Through analysis of exemplary cases, testimonial injustice is proposed as candidate explanation for racial disparity found in financial services.

Applied to Spain:

Testimonial Injustice in banking: The consumer testifies - "I didn't understand, I was not informed, this clause was imposed". The bank, judge, or regulator gives deflated credibility because speaker is "non-professional", "financially illiterate", elderly, migrant.

Hermeneutical Injustice: The consumer lacks the shared interpretive resources to make sense of their experience. Concepts like cláusula suelo, IRPH, anatocismo en revolving, swap, preferentes did not exist in their vocabulary. The gap is structural.

Spanish regulation explicitly recognizes this:

El Tribunal Supremo articulates consumer protection taking into account complex nature of products and need for special information duties that compensate for informational asymmetry that normally occurs in marketing of these products in order to ensure correct understanding of risks assumed by client.

Informational Asymmetry as the core of the abusive clause - In marketing of complex products by financial service providers to non-professional investors

2. Spanish Regulatory Framework Built to Correct Epistemic Injustice

A. EU Base: Directive 93/13/EEC Arts 3.1 and 4.2 - Unfair terms and transparency control

B. Spanish transposition:

1. Orden Ministerial EHA/2899/2011, 28 Oct - Central piece of transparency regulation. Requires pre-contractual information sheet FIPRE, personalized FIPER.
2. Ley 16/2011, de Contratos de Crédito al Consumo and Ley 5/2019 de Contratos de Crédito Inmobiliario
3. Bank of Spain Circulars 5/2012 and 4/2020 - transparency of banking services, lending responsibility

The law imposes positive duty on bank to correct epistemic gap, not just to deliver document.

The convenience test does not exempt bank from fulfilling its reporting duties when contracting complex financial products When banking entity has not carried out these information duties, especially conformed by convenience and suitability test

3. Judicial Doctrine: Double Transparency Control - The Spanish Invention

Spain is unique in EU for creating two-level control, affirmed by Tribunal Supremo:

Control de incorporación + Control de transparencia material

• Formal control: Was clause grammatically clear?
• Material control: Could a real average consumer understand its economic and legal burden?

If second fails, clause is abusive even if clear.

Reintroduced by STS 9 March 2017 - alters control of transparency to identify it with error in consent

4. Detailed Case Law - From Epistemic Gap to Nullity

Case 1: The Floor Clauses - Epistemic Justice Paradigm

STS 9 May 2013 (RJ 2013/3088) + CJEU Joined Cases C-154/15, C-307/15, C-308/15

El Tribunal Supremo determined by judgment of May 9, 2013 that clauses that various financial entities introduced in mortgage loan contracts to establish a minimum

The Supreme Court declared floor clauses null for lack of transparency - consumers could not understand they were neutralizing variable rate.

CJEU then struck down Spanish limitation of temporal effects:

The solution given by Tribunal Supremo nullity of floor clauses... supposes an incomplete and insufficient protection for consumers, and that is therefore contrary to EU law.[on]

This is hermeneutical injustice corrected: Court said average consumer had no conceptual tool to understand that suelo meant he would never benefit from Euribor fall. In Unicaja Banco C-869/19, bank applied floor clause in 2009 when Euribor rate... - consumer only realized years later.

Case 2: Renegotiated Floor Clauses - Testimonial Injustice

CJEU C-452/18 Ibercaja Banco and STS 15 June 2018

Bank offered private agreement to waive floor clause if consumer waives right to claim.

The CJEU has published judgment in case C-452/18 in which XZ is party against IBERCAJA BANCO... novation of the...

STS 15 June 2018 declares nullity of floor clause and novation carried out subsequently through signing of agreement proposed by bank

Doctrine: Waiver signed under epistemic domination is invalid. Consumer's second testimony "I agreed to novation" is not credible if bank did not cure informational asymmetry.

Case 3: Revolving Credit - New Frontier 2025

STS 154 and 155, 30 January 2025 (Roj: STS 242/2025 and 241/2025) + Barcelona AP 19/05/2025

1st Chamber of Supreme Court has established doctrine on control of transparency in a revolving credit, through judgments numbers 154 and 155, of January 30, 2025, having made assessment of abusive nature of remuneratory interest clause, when revolving credit contract breaches transparency control.

Consumers did not understand anatocismo - interest capitalizing, debt never amortized. Classic hermeneutical injustice: no word for "revolving trap". Court requires bank to explain with simulations, not just TAE.

Case 4: IRPH Index

CJEU C-125/18 Gómez del Moral Guasch and STS 595/2020

Mortgage referencing IRPH Cajas. Question: contractual term stating interest shall vary according to reference index is considered unfair?

CJEU March 3 2020: Even if index is official, bank must explain how it is calculated, past evolution, why it chose IRPH over Euribor. Failure = lack of transparency. Again, correcting hermeneutical gap.

Case 5: Thirteen Standard Clauses Null

STS 792/2009

Thirteen standard clauses provided for various contracts between banks and savings banks and customers... have been declared null and void by Supreme Court Decision 792/2009: Those which prevent consumers to know what fees he will be charged.

Earliest mass application of epistemic justice - bank cannot impose terms that prevent knowing.

Case 6: Bondora Cases C-453/18 and C-494/18 - Procedural Epistemic Justice

CJEU states that Regulation No. 1896/2006 and Directive 93/13 must be interpreted in sense that they allow court to control ex officio potentially abusive nature of clauses of loan contract in European order for payment.

And:

The creditor's refusal to provide information that helps determine existence of abusive clauses is contrary to European law

This is testimonial justice procedural: Judge must not blindly trust bank's claim, must actively seek information to empower consumer's testimony.

5. Spain's Regulatory Response to Epistemic Injustice

a) Banco de España Conduct Supervision Department (created 2014): Now treats complaints not as individual disputes but as signals of systemic hermeneutical gaps. Requires banks to do lectura fácil and pre-contractual tests.

b) Ley 5/2019 Art 14: Notary must give independent advice and attest consumer understands - external epistemic validator.

c) Burden of proof reversed: Bank must prove it fulfilled suitability test. Silence = breach.

In short, Spanish banking law has moved from caveat emptor to caveat creditor - the knower with power bears duty to make the other capable of knowing.