Credit Card Law and the articles that compose it – 2024-02-17 12:34:33

The Congress of the Republic approved the Credit Card Law in its final wording on the night of February 15. The legal norm, identified with Decree 2-2024, will regulate the relationships between issuer, affiliate and cardholder as of its entry into force.

The now law had been under discussion since 2019, following the Economy and Foreign Trade Commission and the Consumer and User Defense Commission issued a favorable opinion in conjunction with the one that began its reading process. After an extensive day and approving the 66 articles that compose it, in the last hours nine amendments were presented for addition, substitution and deletion of articles, paragraphs, phrases and words.

The approved changes were agreed upon by all the parties present and in total 13 articles were modified. Nine of them were through amendments and the remaining four were carried out through “a review fund” in which technical aspects of form, but not substance, are seen.

New changes

The first amendment approved and added to the law is related to the percentage of interest for late payment that the user will have to pay. Then the legislators eliminated two lines from article 3, which stated that Savings and Credit Cooperatives will not function in the same way as those that are regulated by the Law of Banks and Financial Groups.

Another paragraph removed is that the credits originated by the use of credit cards and the payment thereof will not apply the rules of the promissory notes. In the article that regulates the validity and termination of the contract, it was approved that the cardholder must pay as agreed with the issuer, until the entire balance is paid.

In relation to payment agreements, another of the amendments presented is aimed at payment agreements. The legislators approved that the user can request an agreement with the issuer, this when they have not paid two or more installments or the debt reaches 150 percent of the credit limit.

You may also request it if you do not agree with the modification of the interest rate or when the conditions of the original contract vary. Misleading advertising by the card issuer will be sanctioned, is another of the added paragraphs.

In article 34, the deputies added that card issuing entities must comply with international and security standards. In this same paragraph, they added that the Directorate of Consumer Care and Assistance (Diaco) will be the entity that for the purposes of consumer law will control and supervise the quality of the suppliers.

The commercialization of data will be classified as a serious infraction, as established in the Consumer and User Protection Law, which imposes fines. Likewise, the Monetary Board will have to make regulations for the operation of the law within a period of no more than 60 days from the publication in the Official Gazette.

The Diaco will not have an additional budget nor will a Financial Services Protection Unit be created as initially intended.

These are some of the main regulations in the Credit Card Law:

• No interest may be calculated on commissions or surcharges. In the case of a payment agreement, the interest may be considered as part of the capital of the new debt.
• If the user has an economic problem and cannot pay the debt or does not agree with the issuer’s interest rate, they may request a payment agreement. The issuing entity must decide “whether or not to agree to said request within 30 days of receipt.”
• When the client pays his debt, the issuing entity will have the obligation to issue a settlement to prevent the same debt from being collected once more years later.
• The Superintendency of Banks (SIB) must publish on its website monthly and in a newspaper with greater circulation semi-annually, a report in a form that is understandable to the public, the weighted average interest rates of credit card operations.
• The SIB will ensure that credit card issuers publish the interest rates for late payments, commissions and any other charges for the credit cards they issue.
• Two types of contracts will be established regarding interest rates: fixed interest rate, which will remain for the duration of the contract signed between the issuer and the cardholder. The variable interest rate will be the one freely agreed upon by the issuer and the cardholder, which may be reviewed semiannually.
• The bank will notify the client 45 days in advance that the interest rate has been modified. If the member does not accept the new rate, they may request that the issuer have their accumulated balance as of that date be canceled through a payment agreement.
• First and second degree savings and credit cooperatives can act as issuers and co-issuers of credit cards, as do the entities regulated by the Banking and Financial Groups Law.
• Banks are prohibited from taking money from monetary accounts without the client’s permission. Article 17 of said law states that “anyone who issues credit cards and manages other accounts of the credit card holder is prohibited from using the monetary or savings funds of the cardholder to allocate the money to pay card debts.” of credit, unless it is endorsed by the member or there is a court order.
• Article 29 states that issuers, directly or through their respective unions, must annually implement financial education programs aimed at cardholders on the proper use of credit cards.
• In this context, the Directorate of Consumer Services (Diaco), the SIB and the Ministry of Education, together with the banks, must organize the “Financial Education Fair” annually in which no type of financial product.
• The crimes of card cloning and data theft are created. The person responsible will be punished with imprisonment of six to ten years and a fine of Q150 thousand to Q500 thousand.
• The cardholder may object to the operations or charges contained in the account statement, as long as they present documents that prove that they did not make the purchase or transaction. The bank must correct the error of the inconsistency or the objected operations.
• In no case is the cardholder obliged to pay the consumption that is the subject of the claim while there is an investigation. The issuer will not apply a late payment interest rate or other charges to the balance under investigation and will not activate the credit card.
• The creditor or collection agent is prohibited from insistently oppressing, bothering or abusing a person to collect debts and making more than two communications during the day towards the debtor is considered harassment.