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.
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).
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.
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.
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.
In the Guatemalan Congress of a favorable opinion was cast on an initiative to regulate the operation of the credit cards and the relationships between issuers, operators and affiliate cardholders.
Posted by the Congress of the Republic of Guatemala:
At a press conference, the president of the Committee on Economy, deputy Emmanuel Seidner, announced that an initiative was presented to Legislative assembly to approve the Credit Card Act, which aims to regulate the operation of credit cards and the relationships between issuers, operators and affiliate cardholders.
The initiative presented to congress contains serious gaps to the detriment of consumers who use plastic money, and who have not been consulted in the preparation of the project.
Carlos A. Mendoza, CABI analyst, warns that the text of the bill on credit cards has been written without consulting financial consumers, and cites as an example the Salvadoran law on the same subject.
The Government presented Congress the Credit Card bill.
The bill if approved by Congress, will regulate the contracts, demanding to provide the given credit limit, interest rates, fees and charges which apply. The institution issuing the credit card must provide the customer a copy of the contract.
"It also states that issuers should verify the ability of people who apply for the card to pay such debt and in case the user cannot pay, he may request to restructure the debt," stated the article in Elperiodico.com.