Protection of Financial Services Users - New Regulations

This new regulation amends the regulations originally issued in January (effective as from May) in furtherance of the amendment of the Central Bank Charter which provides that the Central Bank has, among other functions, "to provide for the protection of the financial services users’ rights" (see “Protection of Financial Services Users” published in Marval News # 125 on February 28, 2013).

The new regulation provides certain minimum requirements regarding formalities and content of financial services agreements as well as certain restrictions on charges, fees and expenses.

This regulation applies to financial entities, foreign exchange bureaus, agencies and offices (although certain exceptions are provided), trustees in trusts which are creditors of financial credits and credit card issuers (except for those transactions not included in the Credit Cards Law).

Among others, the new regulation sets forth certain basic requirements regarding formalities and content of financial services agreements. This regulation provides that agreements shall be clearly written and include stand-alone sections. Specific provisions are included with respect to the font size (1.8mm high) and the delivery of an original copy of the agreement to the users. It is further provided that agreements shall, among others, include the charges and fees and the terms and conditions under which the services are offered, advertised and agreed.

Regarding charges, fees and expenses, the new regulation includes specific provisions on admitted and non-admitted charges and expenses as well as provisions on the presentation, modification and reimbursement of such.

In these regards, the new regulation provides, as a general rule, that charges and fees shall be based on real and demonstrable costs and be duly justified from a technical and economic stand point. Services rendered by third parties, as insurances, shall only be borne by the user at cost value and shall not be higher than the price charged by the third party to its clients with no intermediary and under similar circumstances.

Furthermore, charges and fees are limited to the actual rendering of a service previously demanded, agreed and/or authorized by the user. Likewise, no charges and fees may be charged on services and products if not demanded, agreed and/or authorized by the user and, even if demanded, agreed and/or authorized by the user, if such services were not actually rendered.

Also, pursuant to the new regulation, no fees can be charged on transactions through human bank tellers and with respect to the engagement and/or management of insurance policies, the issuance of bank statements, the sending of electronic bank statements and the assessment, granting or management of credits.

It is further provided that no fees can be charged if such fees are not published in the entities' official website and that entities shall inform aggregate financial costs of transactions. If the entities do not comply with this latter obligation, the entities shall instead charge the damaged party the interest rate that banks pay on fixed-term deposits.

If the entity wishes to set new charges or fees, prior and express approval of the users is required. In the event that the entity wishes to modify existing charges, no objections shall be received during a 60-day term after informing its intention to do so.

The regulation also provides that in the event that unlawful charges are applied on the user, such amounts shall be reimbursed within 5 days upon receipt of the user's complaint.

Finally, the new regulation provides that entities shall analyze and resolve users' complaints. To such end, it includes certain basic requirements, the need of a handbook and certain provisions on the sending, reception and resolution of complaints.

In view of the foregoing amendments, the new regulation complies with certain other related regulations such as those regulations relating to "Interest rates in credit transactions", "Saving deposits, bank accounts for the payment of wages and universal and specific charge fee accounts", "Rules on checking accounts", "Checking accounts in cooperative credits" and "Credit management".