Banking Board of Ecuador

RESOLUTION JB-2015-3321

THE BANKING BOARD

CONSIDERING:

THAT the second paragraph of the third transitional provision of the Organic Monetary and Financial Code determines that the Banking Board will continue to act until it resolves all claims, appeals, and other administrative procedures it was handling on the date of entry into force of that Code, within a period of one hundred and eighty days, extendable at the discretion of the Monetary and Financial Policy and Regulation Board;

THAT through letter No. INSFPR-D1-2014-0178 of January 28, 2014, a monetary sanction of US$ 1,000.00 was imposed on the Deputy President of Banco Pichincha C.A. for non-compliance with the provision issued by the Banking Board No. JB-2013-2639 of September 18, 2013, in which the claim filed by Mr. Oscar Cabrera Rodríguez was resolved;

THAT through communication dated January 31, 2014, received by the Superintendence on February 5 of the same year, the Deputy President of Banco Pichincha C.A. filed an appeal for reconsideration against the administrative act contained in letter No. INSFPR-D1-2014-0178 of January 28, 2014; consequently, the appeal for reconsideration was denied;

THAT through communication dated April 9, 2014, received by this Superintendence on the 11th of the same month and year, Mr. Antonio Acosta Espinosa, Deputy President of Banco del Pichincha C.A., filed before the Banking Board an appeal for review against the administrative act contained in letter No. INSFPR-D1-2014-0603 of April 2, 2014;

THAT with Resolution No. JB-2014-3165 of November 13, 2014, the Banking Board resolved to reject the appeal for review filed by Mr. Antonio Acosta Espinosa, Deputy President of Banco Pichincha C.A.; and, consequently, confirmed letter No. INSFPR-D1-2014-0603 of April 2, 2014, with which the National Superintendent of the Private Financial Sector resolved to confirm the administrative act contained in letter No. INSFPR-D1-2014-0178 of January 28, 2014, and clarified that Banco del Pichincha has not complied with Resolution JB-2013-2639 of September 18, 2013;

THAT through a document presented at the Superintendence of Banks on December 4, 2014, Mr. Antonio Acosta Espinosa, in his capacity as Deputy President of Banco Pichincha C.A. and as such legal representative, filed before the Banking Board an appeal for reconsideration against Resolution No. JB-2014-3165 dated November 13, 2014;

THAT with letter No. JB-2014-3250 of December 10, 2014, the lawyer Juan Francisco Simone Lasso, Secretary of the Banking Board (s), accepted for processing the appeal for reconsideration before the Banking Board, filed by Banco del Pichincha C.A.;

THAT Banco del Pichincha C.A., in the document received by the Superintendence of Banks on December 4, 2014, through which it filed the appeal for reconsideration, stated:

"(...) that Resolution JB-2013-2639 issued by the Banking Board on September 18, 2013, was challenged and refuted by the institution that

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Resolution No. JB-2015-3321

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represents me, and thus, in exercise of its constitutional and legal rights, Banco del Pichincha C.A. sued before the Judges of the Contentious Administrative Tribunal, requesting that the aforementioned administrative act be annulled, as it unjustly harms the Bank, it being important to consider that among the attributions of the Superintendent of Banks and those of the Banking Board, referred to in articles 180 and 175 of the applicable Organic Law of Institutions of the Financial System, there is none that refers to the power to order the return or restitution of values."

That "(...) any provision for the return or restitution of values, issued by the control entity, violates the principle of legality expressly enshrined in article 226 of the Constitution of the Republic,"

That "(...) clearly inadmissible, the fine imposed for the alleged non-compliance with Resolution No. JB-2013-2639", which the Banking Board ratified by instructing Banco Pichincha to "restitute the value claimed by Mr. Oscar Roberto Cabrera Rodríguez", US$ 5,000 (five thousand United States dollars).

That "(...) because in the Resolution subject of the present challenge, citing article 76 of the Law of Contentious Administrative Jurisdiction is inadmissible, as it expressly contradicts constitutional mandates and, consequently, in accordance with article 424 of the Constitution of the Republic, lacks legal efficacy."

The bank states that the aforementioned article 76 of the Law of Contentious Administrative Jurisdiction "violates the right to effective judicial protection, recognized by article 75 of the Constitution, according to which every person has the right to "effective, impartial, and expeditious protection of their rights and interests, subject to the principles of immediacy and speediness".

In its writing, the financial institution indicates that "despite the above and without this implying recognition or acceptance of any responsibility on the part of the Institution, and in strict compliance with what was established through letter No. SB-INSFPR-D1-2014-0540 issued by the Acting Superintendent of Banks, Banco Pichincha accredited on November 13 of the present year, to account No. 5054489600 of Mr. Oscar Roberto Cabrera Rodríguez, the value of US$ 5,000 (five thousand United States dollars), fulfilling the disposition of the control body."

THAT the report carried out by the National Legal Intendancy contained in memorandum No. INJ-DNJ-SAL-2013-0874 of December 19, 2013, which served as the legal basis for the imposition of the sanction contained in letter No. INSFPR-D1-2014-0178 of January 28, 2014, and cited in Resolution JB-2014-3165, mentions that:

"The contentious administrative action filed by the Bank, by challenging the resolution of the Banking Board, since it is a subjective appeal or of full jurisdiction, has the purpose that the bank seeks the protection of its subjective rights allegedly affected, denied, unrecognized, or not recognized, that is, it is an action that tends to justify the lack of legal validity of the challenged act and the manner in which it causes grievance to the plaintiff";

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Banking Board of Ecuador

Resolution No. JB-2015-3321

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"Since it has been submitted to the judicial seat of the Contentious Administrative Tribunal, it must determine the validity and legal efficacy of the challenged administrative act and, if applicable, order the annulment or illegality of the administrative act, the restoration of the affected subjective rights of the plaintiff, i.e., the bank";

THAT article 76 of the Law of Contentious Administrative Jurisdiction establishes that "(...) in no case is the execution of the administrative act suspended";

THAT the actions of the Banking Board are based on constitutional principles and legal provisions enunciated in previous resolutions, which are letter d) of article 175 of the General Law of Institutions of the Financial System, which has an organic character and provides:

"Article 175.- The following are the attributions of the Banking Board: (...) d) Resolve appeals for review of an administrative nature raised before this body".

Article 180, letter j) of the General Law of Institutions of the Financial System provides:

"Article 180.- The Superintendent of Banks has the following functions and attributions: j) Impose administrative sanctions on the institutions it controls, when they contravene the provisions that govern them, as well as their directors, administrators, and officials, and credit subjects who infringe the provisions of this law, in the cases indicated therein";

THAT the arguments exposed by the appellant within the present appeal for review have been repeatedly addressed in the different administrative instances in which the present case has been processed. It is a circumstance that Banco del Pichincha C.A. complied with the provisions of the Banking Board Resolution No. JB-2013-2639 of September 18, 2013, on the same day that the Banking Board ruled on the ratification of letter INSFPR-D1 of April 2, 2014;

THAT Banco de Pichincha C.A. at the time the sanction was imposed by the National Intendancy of the Private Financial Sector had failed to comply with what was established in Resolution JB-2013-2639 of September 18, 2013. The compliance of Banco Pichincha C.A. with the provisions of the control body occurred belatedly, fourteen (14) months after the resolution adopted by the Banking Board (Resolution No. JB-2013-2639 of September 18, 2013);

THAT the provisions of the control body must be complied with by the controlled institutions under conditions of timeliness and under the established determinations, given that they are presumed to be conceived under legality and good faith; their non-compliance affects the effective resolution of conflicts, controversies, and rights of the intervening parties or the corrective actions that must be carried out;

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THAT through internal memorandum -2015-001 of March 4, 2015, it recommended to the Banking Board to reject the claim contained in the appeal filed by the Deputy President of Banco del Pichincha C.A.; and,

IN exercise of legal attributions:

RESOLVES:

ARTICLE ONE.- REJECT the claim contained in the appeal for reconsideration filed by Mr. Antonio Acosta Espinosa, Deputy President of Pichincha C.A.; and, consequently, CONFIRM Resolution No. JB-2014-3165, with which the Banking Board resolved to confirm letter No. INSFPR-D1-2014-0603 of April 2, 2014, with which the economist Valeria Llerena Endara, National Superintendent of the Private Financial Sector, resolved to confirm the administrative act contained in letter No. INSFPR-D1-2014-0178 of January 28, 2014, and clarify that although Banco del Pichincha C.A. complied with the provision of Resolution JB-2013-2639 of September 18, 2013, on the same day that the Banking Board issued Resolution No. JB-2014-3165 on November 13, 2014, this act was belated, as fourteen (14) months had elapsed since the issuance of Resolution JB-2013-2639 of September 18, 2013.

NOTIFY.- Given at the Superintendence of Banks and Insurance, in Quito, Metropolitan District, on the twenty-fifth of March of two thousand fifteen.

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Econ. Rodrigo Landeta Parra
GENERAL SUPERINTENDENT (S)
PRESIDENT OF THE BANKING BOARD SESSION (E)

I CERTIFY.- Quito, Metropolitan District, on the twenty-fifth of March of two thousand fifteen.

Lcdo. Pablo Cobo Luna
SECRETARY OF THE BANKING BOARD