The Financial Market Commission (CMF) reported that it fined banks Santander and Itaú, along with the savings and credit cooperative Coopeuch, for violating the General Banking Law and the Updated Compilation of Regulations.
In the case of Santander and Coopeuch, the regulator stated that they were deficient in the information presented in the Debtors’ Statement they send to the entity. This report included individuals who did not meet the necessary conditions for inclusion.
Regarding Itaú, the CMF pointed out that, according to Resolution No. 5,670, the bank violated a mandatory obligation to inform the General Treasury of the Republic in a timely manner about the amounts corresponding to expired bank credits.
The Commission decided to impose a fine of 2,500 UF on Banco Santander Chile, and two fines of 1,000 UF on Coopeuch and Itaú respectively.
CMF fines Coopeuch and banks Santander and Itaú
Regarding the situation of the Brazilian bank’s subsidiary, the CMF explained in a statement that regulations establish “a system of expiration of deposits, collections, or any other credit in favor of third parties derived from its financial activity.”
If an account remains inactive for two years or no collections are made, the company must create a list in January of the following year.
After three years from the month the list is made, “the credit will expire, extinguishing all the rights of the holder, and the banks will be obligated to pay the corresponding amounts into the Treasury, in accordance with the regulations in force regarding the investigated facts.”
“It is noted that in May 2023, the aforementioned article 156 was subject to a modification, according to which, the expired bank credits must be made available to the National Board of Fire Departments of Chile,” they added.
Regarding the other two cases, the Financial Market Commission emphasized that the rules aim to protect the integrity of the debtors’ information.
This ensures that the information is reliable and allows for the evaluation of access to specific financial solutions or products, highlighting the evaluation of credits.
CMF Fines Coopeuch and Banks Santander and Itaú for Regulatory Violations
The Financial Market Commission (CMF) has imposed fines on banks Santander and Itaú, along with the savings and credit cooperative Coopeuch, for violations of the General Banking Law and the Updated Compilation of Regulations. The CMF’s actions highlight the importance of regulatory compliance and the protection of financial integrity within the Chilean banking system.
Santander and Coopeuch Fined for Debtor Statement Errors
The CMF found that both Santander and Coopeuch submitted Debtor Statements containing inaccurate information. These statements, which are sent to the CMF, are crucial for evaluating creditworthiness and access to financial products. The regulator discovered that both institutions included individuals who did not meet the eligibility criteria for inclusion in the reports.
Itaú Fined for Delayed Reporting of Expired Bank Credits
Itaú, a subsidiary of the Brazilian banking giant, was penalized for failing to report expired bank credits to the General Treasury of the Republic in a timely manner. According to Resolution No. 5,670 of the CMF, banks are obligated to report these amounts promptly. Expired bank credits refer to deposits, collections, or other credits in favor of third parties that have remained inactive for a specified period. After two years of inactivity, banks are required to create a list of these credits. After three years, the credits expire, extinguishing the rights of the holder, and the banks are obligated to transfer the corresponding amounts to the Treasury.
In a recent amendment, expired bank credits are now also made available to the National Board of Fire Departments of Chile. This highlights the evolving nature of regulations and the CMF’s commitment to ensuring responsible and transparent financial practices.
CMF Emphasizes Importance of Debtor Data Integrity
The CMF’s actions demonstrate its commitment to protecting the integrity of debtor information. Accurate and reliable information is essential for assessing creditworthiness, enabling fair and responsible lending practices. By enforcing compliance with regulatory requirements, the CMF aims to ensure that financial institutions operate responsibly and protect the interests of consumers and the financial system as a whole.
Fines Imposed
The CMF imposed a fine of 2,500 UF on Banco Santander Chile, while Coopeuch and Itaú were both fined 1,000 UF each. The UF (Unidad de Fomento) is a Chilean inflation-indexed unit of account.
Impact on the Financial Industry
The CMF’s fines serve as a strong reminder for financial institutions in Chile to adhere to regulatory requirements and maintain high standards of compliance. They demonstrate the regulator’s vigilance in addressing potential violations and its determination to protect the integrity of the financial system. These actions contribute to a more stable and trustworthy financial environment for consumers and businesses.
The CMF’s actions underscore the importance of adhering to regulatory requirements and upholding high standards of compliance within the Chilean banking system. The regulator’s vigilance in addressing potential violations, and its commitment to protecting the integrity of the financial system, benefits consumers and businesses alike, contributing to a more stable and trustworthy financial environment.