With the aim of establishing an appropriate legal framework, representatives have approved a reduction in the maximum interest rate as part of the Law on Credit Cards.
The lack of knowledge about how to use this method of financing in the country is one of the reasons why the reform was proposed, as several representatives believe it is essential to regulate the activity and better educate consumers on the use credit card loans.
An article in Prensagrafica.com explains that "reform MPs endorsed the first paragraph of Article 19 of the Act, which now states that issuers and co-issuers and can not establish interest rates higher than eight times the weighted average interest rate paid by banks to the public on savings with a maturity of one year.
Currently interest rates as high as 40% per year are being charged. The Salvadoran Banking Association (ABANSA) argued against this reform. The bank says this is not feasible for the 400,000 credit cards with limits of under $500. "
Source: laprensagrafica.com
More on this topic
September 2011
The Salvadoran Banking Association is opposing the adoption of a reform which sets a ceiling on interest rates that can be charged for credit card use.
Private banking sector representatives noted that the changes were approved without having performed prior technical analysis and this threatens their legal certainty.
June 2011
The Chamber of Commerce and Industry is calling for a repeal of the decree requiring unanimity in the decisions of the Constitutional Chamber of the Supreme Court.
The statement from the Chamber of Commerce and Industry of El Salvador reads:
“House asks Legislature to repeal Decree 743
June 2011
The National Assembly has approved amendments to Law 7744, extending concessions to 35 years and reducing the associated red tape.
The new law, which has been in discussion in Congress for more than three years, reduces procedures for concessions to 12 months.
The director of the Inter-institutional Commission on Marinas and Wharves, Oscar Villalobos, said the environmental assessment conducted by the Environmental Technical Secretariat (SETENA) is essential to get a marina concession.
August 2011
The recent fine imposed on Mabe has revived controversy over the nature of the regulations.
Two bills relating to monopolies, under analysis in the Legislative Assembly, might be reactivated earlier than expected, after the Commission for the Promotion of Competition (COPROCOM) decided to fine the company Mabe for unlawful concentration in the market.
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