Answer ... (a) Mortgage lending?
The Central Bank has issued its Manual on Offering and Administrating Mortgage Credits, which establishes certain requirements that must be observed by financial entities when granting mortgages. The manual regulates the required minimum salary, life insurance, solvency evaluation, characteristics of the loan, currency, amortisation, salary-instalment ratio and valuation of the real estate, among other things.
(b) Consumer credit?
Consumer credit and credit card interest are regulated in the Regulation on Interest Rates Applicable to Credit issued by the Central Bank. The general parameters established in this regulation are as follows:
- Lenders must calculate interest on the balances of principal actually lent and for the period for which such principal has been available to consumers.
- Fixed interest rate loans may not contain clauses that provide for their modification in certain circumstances.
- Variable interest rate loans must clearly specify the parameters that will be used to determine the variation.
- General loans must be calculated on a 365-day basis, while mortgage loans must be calculated on a 360-day basis.
- Punitive interest rates in addition to the compensatory interest, to be applied to overdue and unpaid credits, will be freely arranged between financial entities and consumers.
In addition, the regulations set out under the Credit Card Law (25,065) must be complied with. As the name indicates, this law regulates the credit card payment system, including the credit card contract, applicable commissions, interest rates, relationship between the issuer, acquirer and clients, among others.
(c) Investment services?
The Capital Markets Law (26,831) regulates the capital markets and appoints the National Securities Commission (Comisión Nacional de Valores (CNV)) as the regulatory authority. To provide securities investment services, financial entities must also be registered as agents of the capital markets with the CNV.
In this sense, financial entities are usually registered as securities brokers in the category of liquidation and compensation agents, which can offer services relating to the negotiation and custody of securities.
(d) Payment services and e-money?
The Central Bank recently issues a new regulation on payment service providers (PSPs). PSPs are legal entities that do not qualify as financial entities, but which perform at least one function in the retail payment system, such as offering electronic payment accounts.
The funds credited by clients in electronic payment accounts offered by PSPs must be available at all times and with immediate effect upon request by the customer. The internal systems implemented by the PSP must allow for the identification of the funds of each customer.
PSPs must register in a special PSP register of the Central Bank and comply with a special information regime. In addition, PSPs must clarify in every advertisement that:
- they are limited to offering payment services;
- they are not authorised to operate as financial entities; and
- the funds deposited in payment accounts are not guaranteed by the Deposit Insurance Fund.