Not considering the costs of the collection process, nor market conditions, are some of the failures that banks identify in the bill being discussed in the Legislative Assembly of Costa Rica.
In Costa Rica a law proposal pretends to reduce by 50% the bank fees on loans for businesses and SMEs, as well as credits for social housing and lower class.
The law project, which was presented to the Congress by the representative, Yorleny Leon, aims to reduce fees in the formalization of bank loans, which currently range between 8% and 10% of total credit.
The Legislative Assembly has approved the absorption of Bancredito by Banco de Costa Rica, which must take on both the entity's assets and its obligations.
After determining that Banco Crédito Agrícola de Cartago (Bancrédito) was not financially viable, last March the National Council of Supervision of the Financial System (Conassif) recommended the absorption of the financial institution, a process that was completed yesterday when the Assembly voted in favor of the suggestion.
Once enacted, the newly approved law will force accountants, lawyers, realtors, and other professionals to report suspicious transactions made by their clients.
Bill 19.951 reforming the Law on Narcotic Drugs, Psychotropic Substances, Drugs of Unauthorized Use, Related Activities, Legalization of Capital and Financing of Terrorism was approved in a second debate by the Legislative Assembly.
A bill has been presented to finance, build, operate and maintain transport infrastructure using trusts.
From the Law project "An Act authorizing the development of transport infrastructure through trusts":
There is a need to rethink the model for financing infrastructure, taking into account the fact that these investments impact on growth expectations for competitiveness.
In Costa Rica a bill has been put forward which aims to allow cooperatives and private and public pensions funds to invest in public infrastructure.
The bill introduced in the Legislative Assembly "... aims to allow different private and public organizations dedicated to raising money from pension funds, to invest in the construction of public works."
The Legislature has approved the creation of a Bank Trust for $440 million to finance construction of the route from San Jose to San Ramon.
From a statement issued by the Legislative Assembly of Costa Rica:
With 45 members in favor, unanimous approval was given this afternoon (February 5th) in a second debate to processing file 18887 on the Act for Development of Public Works on Highway, San Jose, San Ramon and its ring roads using a trust.
A law has been approved to modernize sources of capital for mutuals, allowing the collection of third-party investments.
Until now far mutuals could only turn to the accumulation of profits in order to have capital formation.
The Act to modernize sources of capitalization for mutuals establishes that these entities may obtain financing through mutual participation fees, this mechanism will allow them to capture third-party resources who have no control over the mutuals, only economic rights.
Rules for providing housing to the middle class are being approved without adequate studies on their feasibility and functionality within the financial system.
Within the current drive in the search for housing solutions for the middle class sector, three projects have entered the legislative process.
Of the three projects, two have already been made law and one is awaiting approval by Congress in the second debate.
Entrepreneurs in the finance sector and academics are preparing a proposal to regulate by law invoice discounting, an activity which keeps on growing.
The wording of this proposal has gained importance in recent days as the Legal Affairs Committee of the Legislature began a study of a factoring project dating from 2002.
In this regard Pedro Chaves, director of the Department of Commercial Law at the University of Costa Rica, told Nacion.com that “’All of it will have to be changed, that project is ten years old. The concept to factoring was completely different then. We can not start with such outdated legislation."
The Legislative's delay in approving international financing could contract credit and increase upward pressure on interest rates.
A bill to authorize financing for the country in international markets through Eurobonds has become stalled in the Legislative Assembly, amid a clash between government and opposition.
The absence of these bonds would force the government to resort to 100% financing in the local market in order to fund its operations, increasing interest rates, according to the former Central Bank President Francisco de Paula Gutierrez.
The government of Costa Rica is promoting a legal reform that would transfer the cost of financial supervision to banking institutions, insurance companies and pension operators.
The legal amendment was included in the Bill for the Efficient Management of Public Finances already sent to the Legislature.
So far, "the Central Bank is funding 80% of the operation of the Superintendent of Financial Institutions (Sugef), the Superintendent of Securities (Sugeval), the Superintendent of Pensions (Supen) and the Superintendent of Insurance (SUGESE)," reported Nacion.com.
The Chairman of the Central Bank believes that the regulations need to be modified.
As part of the ‘Jornada de Reflexión’ (Day of Reflection), organized by the National Stock Exchange in commemorating its 35th anniversary, a discussion took place on the major changes that need to be made to the market in order to make it suit the prevailing reality in global financial markets.
More government spending -> more debt -> more expensive credit and more taxes. The State continues to fatten at the expense of the productive sector.
Juan Carlos Hidalgo, in his blog at Elfinanciero.com, begins his article calling the 2011 budget approved by the Legislative Assembly as “illegal”. He explains that current expenditures are included as investments, which is specifically prohibited by the National Budget Law.