A bill proposes to limit interests on all forms of credit, prohibiting setting interest rates unilaterally.
Tuesday, August 27, 2013
A press release from the Ministry of Economy, Industry and Trade of Costa Rica reads:
The President of the Republic, Laura Chinchilla Miranda, Vice President Luis Liberman and the Minister of Economy, Industry and Trade, Mayi Antillon Guerrero, today introduced a bill that seeks to establish limits to define credit usury, through the establishment of economic indicators that would be adjusted periodically.
President Chinchilla said that the behavior of interest rates has been a top concern for her administration, for which they have implemented a number of instruments in addition to monitoring, which allow to establish objective measures to assure that rates are in line with Costa Rican purchasing power.
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The Solis administration is relaunching a bill which aims to set the maximum allowable interest rate for any type of loan.
Although the so called usury rate is part of Costa Rican law, it is not specified how much the rate should be. Because of this, "... the Costa Rican financial market offers various loans with very high rates that could be punishable, but the gap in the law does not allow the courts to determine what is a high or low rate."
Mortgage inventories, cash flow, contracts, intellectual property, trademarks, among others, can be used as an alternative option to traditional collateral on real estate.
Additionally, the law passed by the Legislature on April 30, also allows for current assets or rights given in contracts, equipment, accounts receivable, chattels, crops, tourist bookings and even future rights to the value of timber to be taken into account. The bill is awaiting the signature of the President of the Republic, and subsequent publication, and the issue of the relevant regulations by the General Superintendence of Financial Entities (SUGEF).
The Board of the Central Bank says that any attempts to control prices and restrict competition will drive the informal economy.
Nacion.com reports that "The Government submitted, in late August, to the Legislative Assembly a Bill on Consumer Rights in relation to Usury in Credit Cards."
Congress is studying the "Credit and Debit Card Market Regulation" proposed law.
One of the elements of the new law is to provide better information on interest rates and charging conditions, like not charging interests when complains are being resolved.
According to the nacion.com article: "Advertising, marketing practices, detail on balances and interests, contractual changes and internet shopping are some of the aspects of credit cards that may face regulation, should the law be approved... It will be the first law to regulate this activity in Costa Rica, and would put the country up to date with similar laws that exist in other nations".
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