BaFin Bans N26 from Issuing New Netherlands Mortgages and Appoints Special Compliance Monitor

Germany’s Federal Financial Supervisory Authority (BaFin) announced a package of serious new supervisory measures against N26 Bank AG on 15 December 2025, following a special audit conducted in 2024 that revealed persistent deficiencies across multiple areas of the bank’s operations.

What BaFin Announced

Netherlands mortgage ban — N26 is prohibited from issuing any new residential mortgage loans in the Netherlands, effective immediately. The ban followed the 2024 audit finding serious organisational deficiencies in N26’s mortgage lending business.
Additional capital requirements — N26 must increase its capital reserves above the minimum required under the Capital Requirements Regulation (CRR), reflecting BaFin’s assessment of heightened operational risk.
Second special compliance monitor — BaFin appointed a special monitor to oversee N26’s compliance remediation. This was the second monitor appointed: the first was imposed in 2021 following AML deficiencies and ran until early 2023.
Findings — The 2024 audit found violations of the German Banking Act across risk management, complaints handling, lending business organisation, and governance frameworks.

What Remained Unchanged

Critically, for existing N26 customers:

N26’s full German banking licence (BaFin) was retained
€100,000 deposit protection under the German Deposit Guarantee Scheme remained in force
Existing accounts, cards, and services continued to function normally
New customer onboarding was restricted only in certain markets (Netherlands) — not EU-wide

Who Is Affected Most

Dutch N26 customers: no new mortgage origination from N26 in the Netherlands
New N26 applicants: onboarding was restricted to Germany and Austria as the bank focused on compliance remediation
Existing N26 customers in other EU markets: no direct service impact

Context: N26’s Regulatory Trajectory

The December 2025 measures were the most serious imposed on N26 since 2021. The timeline:

2021: Customer growth cap, first special AML monitor
2022–2023: Gradual compliance progress, monitor lifted
May 2024: €X fine for separate governance matter
March 2025: €15,000 fine for supervisory board loan notification failure
December 2025: Second special monitor + Netherlands mortgage ban

→ Read our full N26 review including what these sanctions mean for customers