Credit Cards and Regulation

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.

Thursday, February 7, 2019

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. According to the initiative, this task would be in charge of the Central Bank and the Commission to Promote Competition.

See "Commission Regulation for Card Payments"

In addition to the proposed law, the Central Bank of Costa Rica (BCCR) examined the possibility of fixing the percentages to the commissions charged according to its organic law in force, however, it was concluded that it is currently not feasible to attribute these powers.

This conclusion was reached after the Legal Advisory Division of the BCCR will conduct an analysis of this possibility, at the request of the manager of the institution, Eduardo Prado, which was conducted on December 28, 2018.

Nacion.com reports that the conclusion of the Legal Advisory Division of the BCCR was that "... the legal bases given by Articles 2 and 69 of the Organic Law of the Central Bank do not satisfy the requirements already described of the need to comply in this matter with the above-mentioned Principle of Legality, for which reason they are not enough to support a regulation by this Entity of the percentages or rates of exchange or acquisition of credit cards."

Costa Rica is not the only country in the region where attempts are currently being reported to regulate the credit card market, as Guatemala has been trying for years to implement a law for the sector.

Also see "New Setback for Credit Card Law" y and "New Attempt to Regulate Credit Cards".

On March 8, 2016, the Credit Card Law came into force. However, after the business chambers, card issuers and the Bank of Guatemala filed legal appeals before the Constitutional Court (CC), it was suspended on March 31 of the same year.

After the Law was declared unconstitutional, on January 30 a new proposal was presented before the Congress of the Republic, whose main objectives are to establish controls and limits to interest rates and other charges that are currently not fixed.

More on this topic

New Attempt to Regulate Credit Cards

January 2019

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

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.

Commission Regulation for Card Payments

January 2019

In Costa Rica, the Central Bank and the Commission to Promote Competition are proposed to set a single percentage in the commissions paid by businesses for accepting credit or debit cards.

Law 21.177, which aims to empower the government to regulate the commissions charged by financial institutions to businesses, was presented to the Legislative Assembly by several deputies.

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.

Costa Rica: Bank Acceptances DO Affect Bank Risk

April 2013

The instrument which had been viewed as a way to circumvent the current credit squeeze, is now officially considered as another form of credit facility.

Bankers' acceptances had been relaunched by the National Stock Exchange (BNV) as a way to provide short-term funds to companies who require them, without having to apply for a formal loan, believing that banks would not have to count them as part of their portfolio credit growth which is currently limited by resolution of the Central Bank of Costa Rica (BCCR).

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