Banking Board of Ecuador

RESOLUTION No. JB-2015-3388

THE BANKING BOARD

CONSIDERING:

THAT this appeal is resolved in accordance with the First Transitory Provision of the Organic Monetary and Financial Code, published in the Official Register Second Supplement No. 332, of September 12, 2014, whose text states that resolutions contained in the Codification 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 Transitory Provision, which states that the Banking Board will continue to act until it resolves all complaints, appeals, and other administrative procedures that it was hearing on the date of entry into force 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, which grants the control body competence to hear and resolve this review appeal;

THAT through the "Free complaint form from users of entities controlled by the Superintendence of Banks and Insurance," submitted to the control body on March 20, 2014, Mr. Freddy Aníbal Marcillo Merino filed a complaint against the National Bank of Development indicating the following: "On Thursday, January 16, 2014, I made a withdrawal of 100 Dollars in the city of Duran, Province of Guayas, being this the last withdrawal in BANRED; the following day, $350 more dollars appeared as withdrawn, a value I never withdrew. Subsequently, I reviewed my bank statement and calculated that approximately $1,600 are missing. BNF retained my card," and therefore requested "That an investigation be conducted and my values, which are approximately one thousand six hundred dollars, be returned";

THAT through letter No. IRP-SAC-2014-216, of March 25, 2014, the Regional Intendancy of Portoviejo, requested the aforementioned financial institution for information and explanations regarding the complaint presented. Through letter No. 04330, of April 11, 2014, Mr. Marco Ruales Valverde, Engineer, Director of the Customer Service Unit of the National Bank of Development, attached the "Customer Service Report" in which he indicated the following:

"(...)
Reviewed the transactions of withdrawals made through ATMs, from December 19 to 21, 2013, and from January 14 to 18, 2014, dates on which the debits that were the subject of the complaint were made, it is established that they were carried out with validation of the PIN of debit card No. 6031600040032054 assigned to savings account No. 0210127997 belonging to Mr. Marcillo Merino Freddy Aníbal;"

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"(...)");

THAT through letter No. IRP-SAC-2014-296, of April 29, 2014, the control body, requested the General Manager of the National Bank of Development the detail of alerts sent to the client for withdrawals made by ATM from December 1, 2013, to January 31, 2014. Through letter No. 04559, of May 6, 2014, the controlled entity manifested the following: "(...) The National Bank of Development currently does not have the SMS and email notification service; however, the Entity, based on Resolution No. 2148 issued by this Control Body, is working on the project that will allow having a transaction monitoring system in order to perform notification through SMS or email";

THAT through letter No. IRP-SAC-2014-338, of May 12, 2014, the Regional Intendancy of Portoviejo, after carrying out the corresponding analysis, concluded and resolved the following:

"(...)
That National Bank of Development, within a period of sixty-two hours, proceed to reimburse US$ 1,467.50, claimed by Mr. Freddy Aníbal Marcillo Merino.
(...)");

THAT through a document submitted to the control body on May 26, 2014, Mr. Pablo Fabián Hurtado Tandazo, Economist, Commercial Manager of the National Bank of Development, Jipijapa Branch, filed a request for reconsideration against the administrative act contained in letter No. IRP-SAC-2014-338, of May 12, 2014;

THAT through letter No. IRP-SAC-2014-377, of June 4, 2014, the Regional Intendancy of Portoviejo, communicated the following:

"(...)
National Bank of Development received the letter (sic) IRP-SAC-2014-138 of May 12, 2014 on May 13 of the current year and the request for reconsideration was submitted to this Control Body on May 26, 2014, having elapsed nine working days, as evidenced in the document, which I attach for your knowledge, therefore the appeal filed is out of time, (...). (Emphasis added). (...)");

THAT through a document submitted to the Superintendence of Banks and Insurance on June 17, 2014, Mr. Pablo Fabián Hurtado Tandazo, Economist,

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Commercial Manager of the National Bank of Development, Jipijapa Branch, with the professional sponsorship of lawyers Jacinto Giler Intriago and Fabián Gómez Vizuete, filed a review appeal against the administrative act contained in letter No. IRP-SAC-2014-377, of June 4, 2014;

THAT Mr. Pablo Fabián Hurtado Tandazo, Economist, Commercial Manager of the National Bank of Development, Jipijapa Branch, argues the following:

"On June 6 of the current year, the National Bank of Development, Jipijapa Branch, was notified of Letter No. 1RP-SAC-2014-377 of June 4, 2014, signed by Lawyer Teresa Roca E., Regional Intendant of Portoviejo of the Superintendence of Banks and Insurance, through which it states that the request for reconsideration cannot be accepted according to the norm of Art. 02, section I.- Of Reconsideration, Chapter II.- Norms for the application of the Appeals of Reconsideration and Review, (sic) regarding this, Madam Intendant, I allow myself to indicate the following:

In accordance with what is prescribed in article 4 of the Organic Law (sic) of the National Bank of Development, it is established that this banking entity has its main domicile in the city of Quito and therefore its General Manager and Legal Representative has domicile in this city; therefore, it is understood that the Resolution adopted by the Regional Intendant should have been notified at the Bank's domicile in the city of Quito; therefore, the term (sic) to file the Request for Reconsideration runs from the date it was received in the General Secretariat of BNF in Quito, which is May 15, 2014, as evidenced in the records, and the Request for Reconsideration was presented on May 26, 2014, that is, within the term (sic) established in Art. 2, section I.- Of Reconsideration, Chapter II, Norms for the application of the Appeals of Reconsideration and Review in matters related to the financial system, (sic) circumstances that have been overlooked by the Regional Intendant of Banks Portoviejo.

With these antecedents of strict legal order, I request you, Mr. Superintendent of Banks and Insurance, President of the Banking Board, to kindly revoke the resolution appealed and contained in letter (sic) IRP-SAC-2014-377 of June 4, 2014, notified at this branch on June 6, 2014, and order that the Request for Reconsideration presented by the claimant on May 26, 2014, be accepted for processing and resolution (sic)."

THAT through letter No. JB-2014-1614, of June 26, 2014, Mr. Pablo Cobo Luna, Lawyer, Secretary of the Banking Board, accepted the review appeal filed for processing, and through letter No. JB-2014-1615, of June 26 of the same month and year, Mr. Freddy Aníbal Marcillo Merino was notified of the appeal filed by the controlled institution;

THAT article 1 and letters b) and o) of article 180 of the General Law of Financial System Institutions determine that the Superintendence of

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Banks and Insurance, has the function and attribution to ensure the stability, solidity, and correct functioning of institutions subject to its control; to supervise that they comply with the norms that govern them; and, to require that said institutions present and adopt the corresponding corrective measures when necessary; likewise, if the Superintendence of Banks and Insurance determines incorrect procedures on the part of controlled financial institutions that have caused harm to a claimant, it must act as ordered for those effects;

THAT through letter No. IRP-SAC-2014-338, of May 12, 2014, the Regional Intendancy of Portoviejo, after the analysis carried out, resolved to order the National Bank of Development to reimburse the values claimed by Mr. Freddy Aníbal Marcillo Merino, by determining that the Bank is subject to what is established in article 5 of Chapter IV, Title XX, Book I of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board;

THAT from the certification of receipt of documents that appears on folio 230 of the file, it was verified that the administrative act contained in letter No. IRP-SAC-2014-338, of May 12, 2014, was notified to the National Bank of Development, Portoviejo Branch on May 13, 2014, and that the financial institution, through a document submitted to the control body on May 26, 2014, filed a request for reconsideration against the aforementioned administrative act; therefore, at the date of its presentation, nine days had elapsed, which is the term.

THAT article 137 of the General Law of Financial System Institutions, as well as article 2 of Chapter II "Norms for the application of the appeals of reconsideration and review in matters related to the financial system and the social security system; and of appeal in matters of private insurance," of Title XVI "Of sanctions and of appeals in the administrative venue"; Book I of the Codification of Resolutions of the Superintendence of Banks and the Banking Board, in force at the time, established that from the administrative acts adopted by the Superintendent of Banks and Insurance or by his delegates, the appeal of reconsideration may be filed before the same officials who issued the respective administrative act, within a term of eight days from notification; for this reason, the request for reconsideration filed by the National Bank of Development was rejected as untimely, consequently the administrative act contained in letter No. IRP-SAC-2014-388, of May 12, 2014, was final at the date the request for reconsideration was filed;

THAT regarding the argument concerning the place in which the content of an administrative act is to be notified, it is important to note that the "Omeba Legal Encyclopedia" establishes notification as "the legal act by which a judicial or administrative resolution of an authority is communicated in an authentic manner to a specific person or group of persons, with all the formalities prescribed by Law."

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For its part, the second paragraph of article 73 and article 74 of the Civil Procedure Code designate notification as the act by which the parties, or other persons or officials, as the case may be, are made aware of judgments, orders, and other judicial provisions, or it is made known to whom an order must be fulfilled or an appointment accepted, issued by the judge; from the notification, the bailiff shall record the corresponding reason, in which the name of the notified person and the date and time of the diligence will be recorded;

THAT for an administrative act to be valid, it must have legal existence and produce effects; it must previously have been duly notified. This means that an administrative act has existence from its notification, and before it, it not only produces no legal effect, but it has no validity or efficacy; being in this way a guarantee that the State grants to those administered to ensure their right of defense against the activity of the Public Administration;

THAT through Letter Power No. 04277, of April 9, 2014, Mr. Freddy Monge Muñoz, Economist, General Manager of the National Bank of Development, delegated to Mr. Pablo Fabián Hurtado Tandazo, Economist, the functions and attributions of Commercial Manager of the National Bank of Development, Jipijapa Branch; among these, that of appearing as plaintiff, assisting third party, excluding third party, injured third party, complainant, or claimant before any administrative and judicial authority of the Republic, in defense of the Bank's interests, which makes the Manager of the Jipijapa Branch competent to receive notifications in procedures initiated against the controlled entity; so much so that it was the Commercial Manager of the National Bank of Development, Jipijapa Branch, who filed the requests for reconsideration and review within the complaint presented by Mr. Freddy Aníbal Marcillo Merino; therefore, the argument that the notification should have been made in the city of Quito because it is the main domicile of the Bank, has no legal basis;

THAT the National Legal Intendancy, through memorandum INJ-DNJ-SAL-2015-0123 of February 4, 2015, recommended to the Banking Board to reject the claim contained in the review appeal filed;

AND,

IN exercise of its legal attributions,

RESOLVES:

SINGLE ARTICLE.- REJECT the claim contained in the review appeal filed by Mr. Pablo Fabián Hurtado Tandazo, Economist, Commercial Manager of the National Bank of Development, Jipijapa Branch; and, consequently CONFIRM, letter No. IRP-SAC-014-377, of June 4, 2014, through which the request for reconsideration filed by the financial institution against the administrative act contained in letter No. IRP-SAC-2014-338, of May 12, 2014, was rejected, which is final, and with which the financial institution was ordered to reimburse the sum of USD$ 1,467.50, claimed by Mr. Freddy Aníbal Marcillo Merino.

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

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

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

Lcdo. Pablo Cobo Luna
SECRETARY OF THE BANKING BOARD