Guatemala: Call to Veto Credit Card Law

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.

Monday, November 16, 2015

An article on 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. Fuentes explained, if a maximum rate of 26 percent annual interest is imposed, the risk of loss to businesses increases, therefore those who earn less than 12,000 quetzales would no longer qualify for a credit card . "

Another unintended consequence of the enactment of the new law is that " will have an impact on the collection of taxes, and that will affect consumption levels."

Currently "... interest rates are around 44 percent."

"... The Executive has not yet given the green light to the Act, but representatives of issuers, have already announced that, if enacted, they will file an action against this law, and at the same time have appealed to President Alejandro Maldonado to veto the legislation which was recently approved. "

More on this topic

Costa Rica: Dollar Loans Getting More Expensive

August 2016

If the measures which the Central Bank plans to implement come to fruition, banks will have to seek authorization from the entity in order to borrow abroad in dollars.

This measure would be in addition to the latest implemented by the Central Bank, raising reserve requirements to 15% on new business loans from abroad. In June this year the increase in the loan portfolio in dollars compared to the same month of 2015 was 14%. 

Costa Rican Government Calls For Credit Restriction Removal

July 2013

President Chinchilla has asked the central bank to reconsider the current policy of quantitative limits on credit growth.

Nació reported that the president's main argument is that "the outlook for the economy in the country is different from that faced in January."

Tighter Rules for Credit in Dollars

May 2013

The Sugef in Costa Rica has demanded tighter controls on banks when lending in dollars.

As part of the measures proposed by the Superintendent of Financial Institutions (Sugef), financial institutions must conduct a capacity analysis on the borrower, as well as requiring collateral and credit history, a test now only done when the loan is for more than $130,000.

Credit Risk for Honduran Agriculture

August 2012

The appropriation of productive land by peasant groups has caused the rejection of $8.2 million in loans requested by agribusiness.

The invasion of land housing mills and palm oil farms has increased credit risk. President by law to the Honduran Association of Sugar Producers (AHPA), Robert Vinelli said that because of the increased risk, banks will have more requirements and there will be an increase in borrowing costs because of uncertainty.

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