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.
Implementing a mixed system of interest rates composed of a fixed one with a contract for a determined time and another variable agreed between the account holder and the issuer, is one of the proposals that are discussed in the Congress of Guatemala.
The proposal for two interest rates was presented by the Instituto de Investigación y Proyección sobre Economía y Sociedad Plural (Idies), before the Congressional Economic Commission, in charge of discussing the proposals for changes to Credit Card Law 5544.
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.
The new law prohibits banks and financial institutions from implementing abusive practices in order to manage debt collection.
From a statement issued by the Congress of Guatemala:
With 108 votes in favor, Congress deputies approved amendments to the Banking Act, with which it prohibited harassment and abusive collection practices on the part of the lenders.
The Superior Court has ordered the temporary cancellation due to lack of a ruling from the Bank of Guatemala, and the fact that Congress gave approval without having a majority, as stipulated by law.
The Constitutional Court (CC) has provisionally suspended the Credit Card Act, which came into force on March 8. Gloria Porras, president of the CC, told Prensalibre.com that one of the major failings was that Congress did not pass the Law with 105 votes, which is defined as a majority.
On the same day of its entry into force, the employers' union filed a constitutional motion against it, arguing that it adversely affects the freedom of the financial market.
For the second time a motion has been filed to temporarily suspend the enforcement of the law, with arguments once again made that the relevant processes were not followed and that its application will have adverse effects on the Guatemalan financial market.
The appeal filed against the law establishing ceilings on interest rates charged by card issuers has been rejected by the Constitutional Court.
The Constitutional Court (CC), rejected the appeals filed against the Credit Card Act , presented in January by the Association of Banks of Guatemala (ABG), the Association of Card Payment Issuers (AEMPG) and Deputy Ronald Arango, reported Republica.com.gt.
The Guatemalan company G & T Continental has submitted an application to the Superintendent of Banks to change its current microfinance license to a general banking license.
From a statement issued by the Superintendency of Banks in Panama:
In compliance with Article 51 of the Banking Law No. 3-2001 and Agreement. amended by the Agreement No. 2-2006, we report:
The president of the central bank said that this would prevent Guatemala from being regarded internationally as a tax haven.
This was explained by Edgar Barquín, president of the Bank of Guatemala (Banguat). He added that approval next year in the U.S. of the Foreign Account Tax Compliance Act (Facta) will be incompatible with Guatemala where there is no law to release bank secrecy.
The fulfillment of the obligation to report on foreign bank accounts belonging to U.S. citizens has been postponed to July 1, 2014.
This was announced by the U.S. Treasury through a statement, explaining that "due to the huge interest from countries around the world" the deadline to comply with the Law on Foreign Account Tax Compliance (FATCA), will be extend by six months, that is until July 1, 2014.
The Monetary Board has issued regulations governing the registration of local rating agencies, and the requirement for all financial institutions to be qualified.
In addition the Monetary Board (MB), published the regulation on Concentration in Contingencies and Investments as well as issues related to the operating permits for offshore entities, regulations that are part of the changes made to the Banking Act and financial groups that were in effect before April 1.
Rating agencies registration is now mandatory and banking institutions must be rated by one of them.
Rating agencies will have to submit their paperwork to the Superintendency of Banks (SIB). According to the chairman of the Monetary Board (JM) and the Bank of Guatemala (Banguat), Edgar Barquin, "among the amendments to the Law on Banks and Financial Groups is the addition that now banks must have a risk rating" .