Amendments to the Regulation on Non-Financial Credit Providers

The Communique amends the regulation governing non-financial credit Providers, defined by the BCRA as “those legal entities that, without being financial institutions in the terms of the Financial Institutions Law, either as a main or supplementary activity, offer credit to the general public, granting certain financings on a regular basis.”

The financings included in the scope of the regulation are basically those granted to individuals and legal entities both for the purchase of goods and/or services and without a specific destination. With respect to these obligated subjects, there are two distinct categories: “nonfinancial companies that issue credit and/or purchase cards” and “Other non-financial credit providers.”

The latter, which operates as a residual category, encompasses a large universe of companies, including FinTech companies that operate under the digital loans vertical. The regulation’s novelties include extending the deadline in the provisions in the Financial Institutions Law applicable to “Other non-financial credit providers” with a scope limited to the financing they grant. In turn, all non-financial credit Providers and the members of their governing, administrative and oversight bodies will be subject to the sanctions provided in articles 41 and 42 of the Financial Institutions Law and concordant provisions on noncompliance with the standards issued by the BCRA to regulate its activity. In relation to this extension, the BCRA expressly clarified that “registration in the Registry of non-financial companies issuing credit and/or purchase cards and/or in the Registry of other non-financial credit providers will not imply authorization to carry out financial intermediation operations, attract public resources, carry out advertising or use the names reserved for entities authorized to do so, or any other action that generates doubts about their nature, individuality or purpose.”

Likewise, a new measure in the Communique is mandatory registration in the “Registry of other nonfinancial credit providers” of the other non-financial credit providers and the non-financial companies that issue credit and/or purchase cards (for the financing not included in Law No. 25,065 on Credit Cards). In both cases, the measure applies when they have granted financing for an amount greater than
$ 10 million, whether or not they receive assistance from financial institutions, whether the credit offer is made in-person and/or electronically or remotely.

This regulation will come into effect on December 1, 2020. The main consequence of this provision is that those non-financial credit providers that are registered with the BCRA will be required to comply with the information regime of the Central Debtors of the Financial System. In addition, through the Communique, the BCRA updated the wording of regulations applicable to the Other non-financial credit providers. Thus, as of January 1, 2021, the provisions of Sections 1: “General aspects,” 3. “Expression of rates” and 4. “Publicity” of the rules on “Interest rates in credit operations” will apply to Other non-financial credit providers. Also as of February 1, 2021, Other non-financial credit providers will become obligated subjects under the regulations on “Protection of users of financial services” and “Communication by electronic means for the protection of the environment.”

In addition to the information regime of the Central Debtors, the Communique establishes that the subjects obligated to register in the “Registry of other non-financial credit providers” must comply, as of March 1, 2021, with the sections on “Transparency” and “Claims” of the “Monthly Accounting Information Regime.”

In addition, the BCRA orders that non-financial credit Providers governed by this regulation must annually submit to the Superintendency of Financial and Exchange Institutions (the “SEFyC,” for its acronym in Spanish) a compliance report made by professionals or professional associations registered with the relevant certification by the Professional Council of Economic Sciences in which they are registered. Lastly, the BCRA establishes that the provisions in the Communique will not apply to cooperatives and mutual associations, with the exception of those on “Transparency” for those cooperatives and mutual associations that are registered or that must register in the “Other non-financial credit providers Registry.” In addition, it clarified that registration does not imply authorization to carry out the operations inherent to a financial institution.