New Attempt to Regulate Credit Cards

After the law seeking to regulate the credit card market in Guatemala was declared unconstitutional, a new proposal was presented.

Thursday, January 31, 2019

The Credit Card Law that was declared unconstitutional at the beginning of 2019, entered into force on March 8, 2016, however, after the business chambers, card issuers and the Bank of Guatemala filed legal appeals before the Constitutional Court (CC), was suspended on March 31 of that year.

See "New Setback for Credit Card Law" and "Guatemala: Credit Card Law Suspended"

The new law proposal presented on 30th January by deputies Ronald Arango, José Valladares and Félix Monzón has among its main objectives to establish controls and limits on interest rates and other charges that are not currently fixed.

Prensalibre.com reports that the initiative "... Establishes regular interest rates. According to that initiative, the last value of the weighted average asset interest rate of the banking system should not be exceeded twice. Based on data from the Banco de Guatemala (Banguat) up to December 2018 the last value mentioned was 12.81%. In other words, it cannot exceed 25.62%. Currently, interest rates have no maximum limitations, so if they are approved, user charges would have to be reduced."

The article adds that "... The initiative also states that there must be an assessment of the ability to payment for anticipated to grant credit by credit cards. It will also establish the obligation for card issuers to carry out the capacity to pay assessment when offering extra-financing."

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More on this topic

Credit Card Law: Progress on New Proposal

December 2019

Last December 2, the new Credit Card Law proposal received a favorable opinion from the Economy Commission of the Guatemalan Congress, and now it should be discussed in the plenary session.

This is the second attempt made in the country to regulate the credit card market, since on March 8, 2016 a law came into force, which was suspended weeks later, because the business chambers, card issuers and the Bank of Guatemala filed legal appeals before the Constitutional Court (CC). At the beginning of 2019 the law was definitively declared unconstitutional by the CC.

Credit Cards: Discussion Continues in Guatemala

May 2019

Regarding the new bill presented to Congress at the beginning of 2019, the Superintendence of Banks is of the opinion that the interest rate should not be limited.

The Credit Card Law came into force on March 8, 2016, but was suspended at the end of the same month, after business chambers, card issuers and the Bank of Guatemala filed legal appeals before the Constitutional Court (CC).

Credit Cards and Regulation

February 2019

Limiting the fees charged in Costa Rica and establishing a law that defines market limits in Guatemala are part of the attempts being made in the region to regulate the use of credit cards.

A law proposal presented last January before the Legislative Assembly of Costa Rica, aims to regulate the percentage of the commission paid by businesses for credit or debit cards.

New Setback for Credit Card Law

January 2019

After 14 appeals filed, the Guatemalan Constitutional Court declared unconstitutional the law that attempted to regulate the credit card market in the country.

The Credit Card Law became effective on March 8th, 2016, however, after the business chambers, card issuers and the Bank of Guatemala filed legal appeals before the Constitutional Court (CC), it was provisionally suspended on March 31st of the same year.

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