More Business for Cooperatives

A bill in Costa Rica proposes allowing cooperatives to carry out activities which up until now were prohibited, such as the public offering of securities issues, administration of trusts, factoring and financial leases.

Thursday, November 30, 2017

The Ministry of Finance and the National Council of Supervision of the Financial System (Conassif) is opposed to this bill. The substitute text received an endorsement from the Legislative plenary on November 28, and will now be sent for consultation and will then be discussed again in the Economic Affairs Committee. reports that "...Among the criticisms of the plan are that these entities do not have the necessary experience to do more sophisticated activities and are exempt from the majority of taxes paid by banks, mutual and financial companies."

Besides lack of experience in the business of financial intermediation, another of the objections is that the project goes against the very nature of cooperatives, since if they are allowed to offer public securities, they would be raising resources from the public and not only from their associates.

Luis Carlos Delgado, president of the Council, expressed the questions to the plan in office PDC-0145-2017, and Finance in the letter DGH-422-2017.  Both documents were sent to the Economic Affairs Committee, the body that processes the bill.  "We are not comfortable with this project because it extends the range of clients of cooperatives beyond those associated with a cooperative, which is an issue," stressed Delgado."

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