Resolution JB-2015-3525 of the Banking Board of Ecuador

Banking Board of Ecuador

RESOLUTION No. JB-2015-3525

THE BANKING BOARD

CONSIDERING:

THAT by Resolution No. JB-2015-3518 of July 15, 2015, the Banking Board, upon learning of the review appeal filed by the Deputy President of Banco Pichincha C.A., against the administrative act contained in Letter No. IRG-DAyEU-V-R-2014-746 of July 9, 2014, resolved as follows:

"SINGLE ARTICLE.- REJECT the claim contained in the review appeal filed by Mr. Antonio Acosta Espinosa, Deputy President of Banco Pichincha C.A.; and, consequently, CONFIRM Letter No. IRG-DAyEU-V-R-2014-746 of July 9, 2014, through which the Regional Intendant of Guayaquil rejected the reconsideration appeal filed by Banco Pichincha C.A. and confirmed Letter No. IRG-DAyEU-V-R-2014-466, of May 21, 2014; with the clarification that the amount the bank must reimburse to Mr. Wesley Leonardo Merchán Reyes amounts to the sum of US$ 8,078.88."

THAT by writing received at the Superintendency of Banks on July 29, 2015, Dr. Jaime Flor Rubianes, Legal Representative, with legal representation of Banco Pichincha C.A., filed a reconsideration appeal against the administrative act contained in Resolution No. JB-2015-3518 of July 15, 2015, arguing the following:

That within the powers of the Superintendency of Banks referred to in the Organic Monetary and Financial Code, there is no power related to ordering the return of values; and,

That "(...) from the 'Detail of Credits' sent by my represented party, it is clear that the installments charged in 2013 and 2014 were debited from the checking account No. 3498799304 owned by the Fideicomiso Automotores Pichincha Trust, and not from account No. 3040379100 belonging to Mr. Wesley Leonardo Merchán Reyes. For validation, we detail the data constant in our system regarding checking account No. 3498799304 owned by the Fideicomiso Automotores Pichincha Trust (...)";

THAT through Letter No. JB-2015-1289 of July 30, 2015, the Secretary of the Banking Board admitted the reconsideration appeal to proceedings and through Letter JB-2015-1290 of the same date, notified Mr. Wesley Leonardo Merchán Reyes with the content thereof;

THAT this challenge is resolved in accordance with the First Transitional Provision of the Organic Monetary and Financial Code, published in the Official Registry Second Supplement No. 332, of September 12, 2014, whose text states that resolutions contained in the Codification of Resolutions of the Superintendency of Banks and Insurance and of the Banking Board, and the norms issued by the control bodies, will maintain their validity in all that does not oppose what is provided in the Organic Monetary and Financial Code, until the Monetary and Financial Policy Board resolves what corresponds, according to the case; and with the second paragraph of the Third Transitional Provision, which empowers the Banking Board to continue acting until resolving all claims, appeals, and other administrative procedures that it was hearing on the date of its entry into force, within a period of one hundred and eighty days, extendable at the discretion of the Monetary and Financial Policy Board;

THAT by Resolution No. 054-2015-F of March 5, 2015, published in the Official Registry No. 467 of March 27, 2015, the aforementioned period was extended by the Monetary and Financial Policy Board by one hundred and eighty additional days;

THAT articles 1 and 180, letters b) and o), of the General Law of Institutions of the Financial System, in force at the date of the claim, determined that the Superintendency of Banks and Insurance is the competent authority to ensure the stability, solidity, and correct functioning of institutions subject to its control; to supervise that they comply with the norms governing their functioning; and to require that said institutions present and adopt the corresponding corrective measures when necessary; attributions that are currently contemplated in article 60 of the Organic Monetary and Financial Code with the purpose that said activities be subject to the legal order and attend to the general interest; in harmony with numerals 9 and 16 of article 62 ibid., which determine, among others, the functions of the Superintendency, in that order: "9. Require that controlled entities present and adopt the corresponding corrective and remedial measures"; "16. Protect the rights of financial clients and users and resolve administrative controversies that arise with entities under its control for which it may request or carry out ex officio, as the case may be, the necessary control actions for their clarification";

THAT the first paragraph of article 3; section I.- OF RECONSIDERATION; chapter II, title XVI; book I of the Codification of Resolutions of the Superintendency of Banks and Insurance or of the Banking Board, establishes:

ARTICLE 3.- "The reconsideration appeal must be based solely on the existence of elements of fact or law not known by the Superintendency of Banks and Insurance or the Banking Board at the time of issuing the resolution, whose record, if it had existed, could have decisively influenced the sense of the resolution."

THAT with respect to the appellant's argument that according to the new legal framework in force, the Superintendency of Banks does not have the power to order the restitution of values, it is necessary to indicate that at the date when Mr. Wesley Leonardo Merchán Reyes filed the claim, the General Law of Institutions of the Financial System was in force; therefore, the resolution of the appeal filed must be resolved in accordance with the provisions of said law, which in the pertinent part established:

The first paragraph of article 1 and letters b) and o) of article 180 of the General Law of Institutions of the Financial System, and article 5 of chapter IV "Procedure for the attention of claims against institutions of the Financial System"; title XX "Of the Superintendency of Banks and Insurance"; book I "General norms for institutions of the financial system" of the Codification of Resolutions of the Superintendency of Banks and Insurance and of the Banking Board, state:

Article 1.- "This law regulates the creation, organization, activities, functioning, and extinction of private financial system institutions, as well as the organization and functions of the Superintendency of Banks, the entity in charge of the supervision and control of the financial system, in all of which the protection of public interest is taken into account.(...).";

Article 180.- "The Superintendent of Banks has the following functions and powers:

b) Ensure the stability, solidity, and correct functioning of institutions subject to its control and, in general, that they comply with the norms governing their functioning, through permanent extra-situ supervision and in-situ inspection visits, according to best international practices, without any restriction and that allow determining the economic and financial situation of the entity, the management of its business, evaluate the quality and control of risk management, and verify the veracity of the information it generates;

(...)

o) Require that controlled institutions present and adopt the corresponding corrective and remedial measures in cases where this is required;

Article 5.- "If the result of the analysis carried out by the Superintendency determines the need for the controlled institution to introduce corrections to regularize the situation that motivated the claim, the Superintendent of Banks and Insurance or the official who has the delegation of said authority, will issue the corresponding order.

If the situation that motivated the claim referred to in the previous paragraph originated in an incorrect procedure of the controlled institution, which caused harm to the claimant, the Superintendency of Banks and Insurance may order the return of the claimed values, in exercise of the functions and powers contemplated in letters b) and o) of article 180 of the General Law of Institutions of the Financial System, granting the legal representative of the entity a period that may not exceed fifteen (15) days from the notification to send, under the legal warnings, the record of compliance with the order issued. Emphasis added.

(...).";

THAT from the cited provisions, it is determined that the Superintendency of Banks is the entity in charge of the supervision and control of the national financial system, in all of which the protection of public interests is taken into account; supervising that they comply with the norms governing them; as well as requiring that said institutions present and adopt the corresponding corrective measures when necessary. In this line, the control body can order the return of values when the claim originates in an incorrect procedure that causes economic harm to the claimant. In merit of the above, the referred argument of the appellant lacks legal basis;

THAT in relation to the argument that the installments charged by the bank in 2013 and 2014 were debited from checking account No. 3498799304 owned by the Fideicomiso Automotores Pichincha Trust, and not from account No. 3040379100 belonging to Mr. Wesley Leonardo Merchán Reyes, it must be indicated that through Letter No. BP-ACEC-2015-0499, received at this control body on June 5, 2015, the Authorized Signatory of Banco Pichincha C.A., presented the "Detail of Credits" of the Auto-Insurance Product, Operation No. 851481-00, for an amount of US$ 14,726.00 with a due date of August 19, 2015, according to the table attached below and which is recorded on folios 99 and 100 of the file; and, that evidences that the last regular debit made to Mr. Wesley Leonardo Merchán Reyes was on December 11, 2012, that is, before the date of the signing of the vehicle delivery-receipt act; and, that from that date no additional credits are recorded, until February 7, 2014, when the bank made several automatic debits to account No. 3040379100 of the claimant, an amount that amounts to the sum of US$ 8,078.88;

Account Number	Account Owner	Credit Date	Description	Amount Credited
3040379100	Merchán Reyes Wesley Leonardo	2014/02/07	Automatic Debit	US$. 224.00
3040379100	Merchán Reyes Wesley Leonardo	2014/02/07	Automatic Debit	US$. 582.40
3040379100	Merchán Reyes Wesley Leonardo	2014/02/07	Automatic Debit	US$. 39.20
3040379100	Merchán Reyes Wesley Leonardo	2014/02/07	Automatic Debit	US$. 39.20
3040379100	Merchán Reyes Wesley Leonardo	2014/02/07	Automatic Debit	US$. 7,194.08
			TOTAL	US$. 8,078.88

THAT it is evident that Banco Pichincha C.A. violated legal provisions, as it charged loan installments after the vehicle was delivered by Mr. Wesley Leonardo Merchán Reyes; without having justified according to law, the charge of US$ 8,078.88 to Mr. Merchán;

THAT the National Legal Intendency recommended the Banking Board to reject the claim contained in the reconsideration appeal filed by Dr. Jaime Flor Rubianes, Legal Representative, with legal representation of Banco Pichincha C.A.;

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Banking Board of Ecuador

Resolution JB-2015-3525 Page No. 5

THAT the National Legal Intendency, through memorandum INJ-DNJ-SAL-2015-0562 of August 11, 2015, recommended the Banking Board to reject the claim contained in the reconsideration appeal filed; and,

IN exercise of its legal powers,

RESOLVES:

SINGLE ARTICLE.- REJECT the claim contained in the reconsideration appeal filed by Dr. Jaime Flor Rubianes, Legal Representative, with legal representation of Banco Pichincha C.A.; and, consequently, CONFIRM the content of Resolution No. JB-2015-3518 of July 15, 2015.

NOTIFY.- Given at the Superintendency of Banks, in Quito, Metropolitan District, on the thirteenth of August of two thousand fifteen.

[Signature] Econ. Rodrigo Landeta Parra GENERAL INTENDENT, S PRESIDENT OF THE BANKING BOARD, E

I CERTIFY.- Quito, Metropolitan District, on the thirteenth of August of two thousand fifteen.

[Signature] Ab. Juan Francisco Simone Lasso SECRETARY OF THE BANKING BOARD