Banking Board of Ecuador

RESOLUTION No. JB-2015-3326

THE BANKING BOARD

CONSIDERING:

THAT this appeal is resolved in accordance with the First Transitional Provision of the Organic Monetary and Financial Code, published in the Official Register Second Supplement No. 332, on September 12, 2014, whose text states that resolutions contained in the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, and the norms issued by the control bodies, will maintain their validity in all that does not oppose what is established in the Organic Monetary and Financial Code, until the Monetary and Financial Policy and Regulation Board resolves what corresponds, according to the case; and with the second paragraph of the Third Transitional Provision, which states that the Banking Board will continue to act until it resolves all complaints, appeals, and other administrative procedures it was hearing as of the date of validity of the same, within a period of one hundred and eighty days, extendable at the discretion of the Monetary and Financial Policy and Regulation Board. From the aforementioned provisions, it is established that the Banking Board is competent to resolve the present review appeal;

THAT the Banking Board issued Resolution No. JB-2013-2451, on April 9, 2013, rejecting the claim contained in the review appeal filed by Mr. Antonio Acosta Espinosa, Vice President of Banco Pichincha C.A.; and, consequently, confirming the letter DJyTL-CyR-REQ-2012-0304 of June 25, 2012, through which the lawyer Fidel Egas Chiriboga, Director of Legal Affairs and Legal Procedures, denied the reconsideration appeal against the administrative act contained in letter DJyTL-REQ-2012-296, of May 30, 2012, and, consequently ratified letter SRJG-CyR-OBS-2006-004 of May 23, 2006, through which the Regional Legal Subdirector of Guayaquil, at that date, ordered Banco Pichincha C.A. to proceed to refund to the account of Mrs. Ly leth Fernanda Pico Rosas the sum of USD 5,850.00, which arose within the claim for payment of certified checks;

THAT Banco Pichincha C.A. filed a reconsideration appeal against the content of Resolution No. JB-20123-2451, regarding which the Banking Board issued Resolution No. JB-2013-2630, of September 12, 2013, in which it resolved: "REJECT the reconsideration appeal filed by Mr. Antonio Acosta Espinosa, Vice President of Banco Pichincha C.A; and, consequently, CONFIRM the administrative act contained in Resolution No. JB-2013-2451 of April 9, 2013, through which the collegiate body rejected the review appeal and confirmed letter No. DJyTL-CyR-REQ-2012-0304 of June 25, 2012";

THAT the Legal Affairs and Legal Procedures Directorate issued letter No. DJyTL-2013-0919, of November 11, 2013, indicating that a copy of letters Nos. JB-2013-2079 and JB-2013-2080, of October 2, 2013, has been received, through which Mr. Pablo Coba Luna, Secretary of the Banking Board, puts certified copies of Resolution No. JB-2013-2630, of September 12, 2013, in the knowledge of the parties, and therefore requested Banco Pichincha C.A. to send, within a term of three (3) days, proof of its compliance;

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THAT through letter No. DJyTL-2014-0695, of May 14, 2014, it again required Banco Pichincha C.A. to send proof of compliance with what was ordered in letter No. DJyTL-CyR-REQ-2012-0304 and confirmed with Resolution No. JB-2013-2630, and emphasized that the review appeal filed before the Banking Board against the fine imposed by the Superintendent does not affect the finality of the order to return funds contained in Resolution No. JB-2013-2630;

THAT on June 2, 2014, Banco Pichincha C.A. filed a reconsideration appeal to have the administrative act contained in letter No. DJyTL-2014-0695, of May 14, 2014, revoked, which was confirmed by the Director of Legal Affairs and Legal Procedures of the Regional Superintendence of Guayaquil, with letter No. DJyTL-2014-0777, of June 12, 2014;

THAT through a document received at the Superintendence of Banks and Insurance on June 26, 2014, Mr. Simón Acosta Espinosa, Vice President of Banco Pichincha C.A., with the professional sponsorship of doctors Gonzalo Orellana Sáenz, Mauricio Estrella Dávila, and Pablo Cadena Merlo, filed a review appeal against letter No. DJyTL-2014-0777, of June 12, 2014, signed by the Director of Legal Affairs and Legal Procedures (E), arguing the following:

• That the appealed letter does not state the norms or legal principles on which the administrative act is based, thus violating due process recognized in the Constitution of the Republic; that Banco Pichincha C.A. has requested the Superintendence of Banks and Insurance to abstain from continuing to hear the case as it has been submitted to the ordinary justice; that regarding the lack of competence of the Control Body to order the return of values, the Constitutional Tribunal has already ruled; that Resolution No. JB-2013-2630 of September 12, 2013, through which the Banking Board ratified the return of the value claimed by Mrs. Pico Rosas, expressly violates the constitutional principle of legality, due to the lack of competence of the Banking Board; that the return of any sum would imply a sanction, which would expressly contradict the aforementioned constitutional norm, as the Banking Board has neither competence nor jurisdiction to order the return of values; and that having filed its administrative contentious appeal, the bank has not failed to comply with Resolution No. JB-2013-2630 of September 12, 2013; that having appealed to the ordinary justice, Banco Pichincha C.A. is not disobeying the orders of the Superintendence of Banks and Insurance and the Banking Board.

THAT through letter No. JB-2014-1701, of July 2, 2014, the Secretary of the Banking Board, accepted the aforementioned review appeal for processing;

THAT through letter No. DJyTL-2014-0901, of July 29, 2014, the lawyer Federico Sandoval Valverde, Director of Legal Affairs and Legal Procedures (E), issued a technical report requested by the Subdirector of Legal Advice of the National Legal Directorate of this Superintendence, with letter No. SAL-2014-00154, of July 15, 2014, in which he pointed out that the appealed letter is not the first document with which the execution of the Banking Board's decision has been requested from Banco Pichincha; that previously, letter No. DJyTL-2013-0919, of November 11, 2013, was sent to the bank, which was answered

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through communication No. BP-ACEC-2013-0933, of November 18, 2013, without having presented any appeal on that occasion, precisely because appeals against procedural letters are not admissible;

THAT article 1, in conjunction with articles 180, letters b) and o) of the General Law of Institutions of the Financial System, assigns to the Superintendence of Banks and Insurance, within the scope of its competence, the supervision and control of the financial system, in all of which the protection of the public's interests is taken into account, as well as requiring that controlled institutions present and adopt the corresponding corrective measures;

THAT in virtue of the aforementioned provision, the Banking Board, with the purpose of achieving effective compliance with the provisions emanating from both the control body and the collegiate body, integrated into chapter IV, of title XX, of Book I, of the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, the procedure for the attention of complaints against institutions of the financial system, always attentive to the protection of the public's interests as mandated by law, whose article 5 establishes that if the result of the analysis carried out by the Superintendence determines the need for the controlled institution to introduce corrections that regularize the situation that motivated the complaint, the Superintendent of Banks and Insurance or his delegate will issue the corresponding disposition. Likewise, if the situation that motivated the aforementioned complaint originated in an incorrect procedure of the controlled institution, which caused harm to the claimant, the Superintendence of Banks and Insurance may order the return of the claimed values, granting the legal representative of the entity a term that may not exceed fifteen (15) days from the notification to send, under the legal warnings, proof of compliance with the issued order;

THAT in accordance with what is expressed in the background paragraphs, Resolution No. JB-2013-2630, of September 12, 2013, in which the collegiate body resolved to reject the reconsideration appeal filed by the Vice President of Banco Pichincha C.A. and confirmed Resolution No. JB-2013-2451 of April 9, 2013, became final, as the resources in the administrative venue were exhausted; consequently, the aforementioned administrative act constitutes a final and enforceable act. In any case, letter No. DJyTL-2014-0695, of May 14, 2014, constitutes an administrative act derived from the previous one, therefore it is not an impugnable administrative act, but an act of mere procedure, through which the compliance with the resolution issued by the Banking Board is insisted upon with the administered, as is also letter No. DJyTL-2013-0919, of November 11, 2013, issued previously, which was not the object of any appeal, and in which it was also requested to send proof of compliance with Resolution No. JB-2013-2630, of September 12, 2013;

THAT the appellant argued that the appealed letter violates due process established in article 76 of the Constitution of the Republic; regarding this, it becomes inadmissible, for the reason that, as expressed above, the bank exercised all and each of the administrative appeals contemplated in

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the pertinent regulations, until concluding with the filing of the reconsideration appeal before the Banking Board;

THAT Banco Pichincha C.A. based its argument that the control body and the Banking Board should abstain from continuing to hear the pending case since a contentious administrative action was filed, so it is up to the Court of Contentious Administrative Justice to resolve regarding the administrative act appealed in that venue. Regarding this, it is necessary to point out that such filing does not suspend the administrative act contained in Resolution No. JB-2013-2630, of September 12, 2013, as determined by article 76 of the Law of the Contentious Administrative Jurisdiction; likewise, article 24, chapter II, title XVI, book I of the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board states that the direct and immediate effects of administrative acts emanating from the Superintendence of Banks and Insurance are not suspended when they have been the object of appeal through the filing of appeals that must be resolved by the Banking Board, with the exception of the tacit suspensive effect that occurs in the resolutions issued by the National Superintendent of the Private Insurance System as delegate of the Superintendent of Banks and Insurance, when resolving, in first instance, the complaints presented by insured persons against insurance companies under the provisions of article 42 of the General Insurance Law, when these have been appealed before the Banking Board;

THAT the appellant insists on his argument regarding the lack of competence of the control body and the Banking Board to order the return of values; in this regard, it is important to emphasize that the same was examined and resolved within the previous administrative appeals filed by the bank, consequently, this argument is not admissible; however, it is necessary to emphasize that the Superintendence of Banks and Insurance has as a constitutional, legal, and normative mandate, previously described, the protection of the interests of users of the controlled systems, therefore, upon determining that some regulatory provision governing its operation has been infringed and an incorrect procedure that caused harm to a claimant user and/or client of the respective controlled institution, it must order the pertinent corrections through the corresponding administrative act.

THAT from the legal order previously expressed, it can be inferred that the administrative act is the unilateral declaration of will of the administration that caused particular legal effects and in a direct manner that obliges the administered to its compliance without delay by virtue of the fact that the resources in the administrative venue of the Superintendence and the Banking Board have been exhausted; therefore, resolution JB-2013-2630 of September 12, 2013, is final and is not suspended by the fact that the bank appealed to the Contentious Administrative Court;

THAT finally, the appellant argued lack of motivation of the appealed letter; regarding this, it is necessary to point out that the aforementioned administrative act contains the analysis of the factual and legal grounds applicable to this case, supported by the pertinent regulations to hear and attend the present appeal, therefore this argument becomes inadmissible;

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THAT by mandate of article 76 of the Constitution of the Republic, in conjunction with articles 137 of the General Law of Institutions of the Financial System, administrative acts issued by the Superintendent of Banks and Insurance or his delegates may be subject to reconsideration appeal; in the present case, the actions deriving from the administrative act contained in resolution JB-2013-2630 of September 12, 2013, which by virtue of the constitution and the law the control body imparts, are actions conducive to demanding its compliance; in any case, letter No. DJyTL-2014-0777, of June 12, 2014, appealed, does not suspend the effects of said resolution, by having automatically caused its own legal effects, as stated in articles 76 of the Law of the Contentious Administrative Jurisdiction and 24 of chapter II, title XVI of the Compilation of Resolutions of the Superintendence of Banks and Insurance and the Banking Board;

THAT the National Legal Superintendence, through memorandum INJ-DNJ-SAL-2015-0062 of January 26, 2015, recommended to the Banking Board to reject the claim contained in the review appeal filed;

AND in exercise of its legal attributes,

RESOLVES:

SINGLE ARTICLE.- REJECT the claim contained in the review appeal filed by Mr. Simón Acosta Espinosa, Vice President of Banco del Pichincha C.A.; and, consequently, CONFIRM letter No. DJyTL-2014-0777, of June 12, 2014, signed by lawyer Roberto Castillo Ottati, Director of Legal Affairs and Legal Procedures, with which he ratifies letter No. DJyTL-2014-0695, of May 14, 2014, in which the control body insists on Banco Pichincha C.A. sending proof of compliance with what was ordered in letter No. DJyTL-CyR-REQ-2012-0304, of June 25, 2012, confirmed with Resolution No. JB-2013-2630, of September 12, 2013.

NOTIFY.- Given at the Superintendence of Banks, in Quito, Metropolitan District, on the first of April of two thousand fifteen.

Econ. Rodrigo Landeta Parra GENERAL SUPERINTENDENT, S PRESIDENT OF THE BANKING BOARD, E

I CERTIFY.- Quito, Metropolitan District, on the first of April of two thousand fifteen.

Lcdo. Pablo Cobo Luna SECRETARY OF THE BANKING BOARD