Between 2010 and September 2016 the gross balance of loans granted through credit cards grew by more than 100%, going from $145 million to $340 million.
Figures from the Superintendency of Banks and Other Financial Institutions (SIBOIF) show that the number of loans granted through credit cards rose from 541,000 in 2009 to more than 1 million to September this year.
The bill against tax fraud authorizes the Ministry of Finance to return up to 1% of sales tax paid by final consumers.
The return of that percentage, which would be a maximum of 1% of the general sales tax, would be subject to ranges and types of trading activity, as explained in the Bill to improve the fight against tax fraud.
Cost analysis, interest rates and annuities for credit cards and other financing cards issued in Panama in August 2016.
Up until this July the balance on credit cards was $1.865 million, 21.6% more than the balance recorded in July 2015, which was $1,533,000.
The lowest rate of average annual interest in the local market is located at 7.50%, while the highest is at 28%, reveals a quarterly study published by the Authority for Consumer Protection and Defense of Competition (Acodeco ).
In April 2016 the balance of the credit card debt was $1.688 billion, 15% more than in the same period in 2015.
From a statement issued by the Ministry of Economy, Trade and Industry:
The study with a cut off date of April 30 determined that the balance of debt is 908.149 million colones ($1.688 billion) (3.02% of GDP), which represents an increase of 1.27% compared to the previous study (January), while the yoy increase was 15.4%.
In the first quarter of 2016 cardholders delinquencies decreased, but the total arrears remains at a relatively high percentage of 10.3%.
From a report issued by the Ministry of Economy, Industry and Commerce (MEIC):
Study on Credit Cards
- Balance of debt on credit cards up to 31 January recorded an increase of 7.15% over the previous quarter.
- The average balance of outstanding card debt is ¢398,000 colones.
The business sector is opposed to a bill which aims to regulate interest rates on bank and nonbank loans, including credit cards.
In the opinion of the private sector the usury bill that is being promoted by the executive branch "... contradicts the laws governing financial activity."This is the view of the Honduran Council of Private Enterprise (COHEP), who presented several comments on the text to the Presidential House and Congress .
Loans at lower rates and better terms than loans with credit cards explain part of the interannual drop of 9% in total plastic cards circulating in the country in March 2016.
Data from the National Banking and Insurance Commission (CNBS) indicates that the number of credit cards in circulation fell from 905,007 in March 2015 to 822,278 in the same month in 2016.
The new law prohibits banks and financial institutions from implementing abusive practices in order to manage debt collection.
From a statement issued by the Congress of Guatemala:
With 108 votes in favor, Congress deputies approved amendments to the Banking Act, with which it prohibited harassment and abusive collection practices on the part of the lenders.
The Superior Court has ordered the temporary cancellation due to lack of a ruling from the Bank of Guatemala, and the fact that Congress gave approval without having a majority, as stipulated by law.
The Constitutional Court (CC) has provisionally suspended the Credit Card Act, which came into force on March 8. Gloria Porras, president of the CC, told Prensalibre.com that one of the major failings was that Congress did not pass the Law with 105 votes, which is defined as a majority.
On the same day of its entry into force, the employers' union filed a constitutional motion against it, arguing that it adversely affects the freedom of the financial market.
For the second time a motion has been filed to temporarily suspend the enforcement of the law, with arguments once again made that the relevant processes were not followed and that its application will have adverse effects on the Guatemalan financial market.
The appeal filed against the law establishing ceilings on interest rates charged by card issuers has been rejected by the Constitutional Court.
The Constitutional Court (CC), rejected the appeals filed against the Credit Card Act , presented in January by the Association of Banks of Guatemala (ABG), the Association of Card Payment Issuers (AEMPG) and Deputy Ronald Arango, reported Republica.com.gt.
Unconstitutionality lawsuits filed by banks and the Association of Payment Card Issuers may postpone the enforcement of the law, which was scheduled for March 2015.
The actions claiming unconstitutionality argue that when approving the controversial law, Congress did not follow the relevant processes, including the inclusion of the opinion of the Monetary Board on the part of representatives.
The controversial law limiting interest rates charged by credit card issuers was sanctioned by President Maldonado and will take effect on March 8, 2016.
Despite the request of the financial sector to veto the new law , president Maldonado decided to sanction it, and now the Superintendency of Banks will have to issue the necessary regulations for its implementation.
Issuers have objected in particular to the cap on interest that can be charged, citing an increased credit risk and a reduction in the number of cardholders.
An article on Lahora.gt reports that "... Roberto Fuentes, of the Association of Credit Card Issuers of Guatemala (AEMPG), said the Credit Card Act does not have the technical basis necessary to actually have a positive effect on users.
The new law will prevent usury and harassment of users, but will also affect consumers and business activity by leaving at least 500,000 Guatemalans without access to this payment method.
Decree 7-2015 of the Law on Credit Cards, approved by the Guatemalan Congress will come into force in three months time and will put a cap on interest rates that can be charged by card issuers, the procedures used to collect from defaulters, but at the same time will limit access to an important method of payment.