A press release from the Presidency of the Republic of El Salvador reads:
The observations are essentially based on three considerations:
1. The Presidency shares the spirit of the legislators in their initiative to limit interest rates, in many cases charged by loan sharks, in the financial system that applies to credit card users and which has as its principal the intention to protect consumers.
2. The Presidency believes that the procedure by which the legislators intended to benefit users is inadequate because, far from providing benefits, it harms nearly half of them, and precisely those who are the most vulnerable and in need of funding for their production, commercial, service or consumption operations.
3. The Presidency considers that the decree establishes inequalities under the law and has disproportionate penalties that affect legal certainty in the country.
The observations made by the Presidency concern the mechanism for setting a ceiling on interest rates that can be charged and unequal treatment between economic operators.
Source: Presidencia de la República El Salvador
More on this topic
August 2009
The new law will oversee issuance, operation, administration and closure of credit and debit cards.
Some of the aspects included in the new legislation will be commissions, fees for late payments and interest rates.
Representative Blanca Coto commented in newspaper ElSalvador.com: "We intend to protect the user from abuses, … and obviously to lower interest rates".
November 2009
Among the new regulations, fees for late payments cannot be higher than $25.
This law has been discussed by the Legislative Assembly for 7 years. It forces issuers to send statements to their customers with 15 days of anticipation, but refrains from set maximum interest rates.
September 2009
In El Salvador, opponents of the law are proposing a maximum credit card interest rate controlled by the Central Bank.
Authorities from the Central Bank (BCR), the Superintendence of the Financial System and the Consumer Defense Directorate, presented a new law proposal to the Legislative Assembly.
October 2011
The Financial Committee of the Legislative Assembly in El Salvador has began to study a bill which will apply to "all financing operations related to the procurement of goods and services."
The item will be incorporated into the usury bill, that will be analyzed in Congress .
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