El Salvador: Unions Oppose Greater Financial Regulation

Unions are opposed to the legal reform which aims to extend the scope of the supervision of the Superintendent of Financial System over savings and loans cooperatives.

Tuesday, September 20, 2016

In the view of Julio Cesar Portillo, secretary of the board of the National Commission for credit unions in El Salvador and CEO of Co-Andes de R.L. , "... the reform presented to the Legislature, seeks to impose on savings and loans cooperatives a framework of regulation and supervision which is exclusively for private financial companies and for-profit institutions such as banks. "

Elsalvador.com reports that "...Among the reforms proposed by the Superintendency of the Financial System is the concept that when the sum of assets, deposits or contributions of a cooperative exceed $10 million they must submit quarterly financial statements to the SSF and monthly reporting of portfolio loans, deposits and other obligations. They must also submit a regularization plan and failure to meet deadlines would result in them incurring penalties and revocation of operating permits. "

The bill proposes that cooperatives be classified according to their assets, ranging from those with equity of less than $1 million to those with more than $10 million and that the fee for supervision is 0.025% per annum on equity, paid in monthly installments. 

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