Banking Board Resolution JB-2015-3414

RESOLUTION No. JB-2015-3414

THE BANKING BOARD

CONSIDERING:

THAT according to the last paragraph of the Second Transitional Provision of the Organic and Financial Code, published in the Official Register Second Supplement No. 332, of September 12, 2014, the Banking Board will continue to act until it resolves all appeals it was hearing as of the date of entry into force of this Code, for a period of one hundred and eighty days;

THAT through Resolution No. 054-2015-F, of March 5, 2015, published in the Official Register No. 467, of March 27, 2015, the aforementioned period has been extended by an additional one hundred and eighty days;

THAT Mr. David González Zambrano, official of the Statistics Sub-directorate of the Superintendence of Banks and Insurance, through emails dated August 7, 2013, informed Banco del Pacífico S.A. that the geographic distribution visible in the Deposits and Placements reports, which was concentrated in the cities of Cayambe and Guayaquil, corresponds to the data reported by said bank in structures R02 "Granted Operations" and R20 "Credit Card Opening", and therefore such information is the exclusive responsibility of Banco del Pacífico S.A.; furthermore, he stated that this Superintendence cannot modify or correct the information sent by the entities under its control.

THAT through letter No. DEF2013-089, of August 19, 2013, Mr. Efraín Viera Herrera, Executive President of Banco del Pacífico S.A., mentioned that the placement information of his represented entity, which is published on this Superintendence's website, "...with respect to Banco del Pacífico S.A., it is reported that the portfolio is placed only in the cities of Cayambe and Guayaquil, which is not correct information".

THAT through letter No. DNEI-SES-2013-0691, of September 23, 2013, the National Directorate of Studies and Information responded to the letter mentioned in the preceding paragraph, requesting the entity "to send a letter explaining the reason for the error and which must attach, on magnetic media, the correct data, in a tab-delimited text file, with the following fields:

• Operation number
• Subject identification number
• Granting office (table 3)".

THAT through letter No. DNEI-SES-2013-0733, of October 30, 2013, the Directorate of Studies and Information insisted on what was requested in letter No. DNEI-SES-2013-0691, of September 23, 2013, and stated that if the bank does not comply "sanctions provided for in article 10, Chapter I, Title XVI, Book I of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board" will be applied.

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THAT attached to letter No. DEF2013-128, of November 5, 2013, Mr. Efraín Viera Herrera, Executive President of Banco del Pacífico S.A., sent a compact disc with the information on the credits granted by the entity and informed "that in the review of the structures sent since August 2012, field No. 13 had the default code...".

THAT regarding the information sent by Banco del Pacífico S.A., the National Directorate of Studies and Information through letter No. DNEI-SES-2013-0768, of November 20, 2013, indicated that it was incomplete as it lacked the data corresponding to structure R20 "Credit Card Opening" and requested that the missing information be sent by Friday, November 22, 2013.

THAT subsequently, Banco del Pacífico S.A. through letter No. UAIR-RC-156-2013, of December 11, 2013, sent the information for structure R20 "Credit Card Opening". Then, with letter No. AJ-006-2014-AL, of January 17, 2014, said Bank sent the information for structure R20 "Credit Card Opening" again.

THAT through letter No. DNEI-SES-2014-0263, of April 11, 2014, addressed to MBA Johnny Bravo Cevallos, Manager of the Credit Risk Unit of Banco del Pacífico S.A., Msc. Daniel Torresano Melo, then National Director of Studies and Information, stated the following:

"(...)

...the information sent by Banco del Pacífico S.A. through structures R02 "Granted Operations" from August 2012 to July 2013 and R20 "Credit Card Opening" from August 2012 to December 2013, contained erroneous data in the office field, which negatively impacted the quality of the information of both Banco del Pacífico S.A. and the private banking subsystem.

For the above, in accordance with article 134 of the General Law of Financial System Institutions, with organic quality, and in concordance with paragraph 6.2, article 6, Section II, Chapter I, Title XVI, Book I of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board...

...I proceed to impose on you, Johnny Aldrin Bravo Cevallos, with identity card No. 0910885250, Manager of the Credit Risk Unit, as responsible for preparing the information for structure R02 "Granted Operations" of Banco del Pacífico S.A., a fine of USD $ 200.00 (two hundred United States dollars) which must be paid at Banco del Pacífico S.A., depositing at the counter the name or identity card number; a copy of the deposit receipt must be sent to this control body, within

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a term of five (5) days that apply from the receipt of this letter".

THAT through letter No. AJ-014-2014-AL, of April 22, 2014, MBA Johnny Bravo Cevallos, Manager of the Credit Risk Unit of Banco del Pacífico S.A., filed an appeal for reconsideration against the administrative act contained in letter No. DNEI-SES-2014-0263, of April 11, 2014, addressed to MBA Johnny Bravo Cevallos, Manager of the Credit Risk Unit of Banco del Pacífico S.A., which was rejected by the National Director of Studies and Information who through letter No. DNEI-SES-2014-0442, of June 26, 2014, ratified the appealed letter in the following terms:

"(...)

From the review of the arguments exposed in the appeal for reconsideration presented by you, it is confirmed that Banco del Pacífico S.A. sent information with errors in structure R02 "Granted Operations", an event that is the reason for the sanction according to paragraph 6.2 of article 6, Section II, Chapter I, Title XVI, Book I of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board...

(...)

For the above, and once the arguments with which you appeal have been analyzed, this National Directorate rejects the appeal for reconsideration filed and ratifies the sanction contained in letter No. DNEI-SES-2014-0263 of April 11, 2014.

Finally, I comply in informing you that the updated placement information of Banco del Pacífico S.A. is published on the website of this Superintendence, which required processing by the Systems area of this control body, who had to replace the information initially reported in structures, with that sent on the compact discs".

THAT through letter No. AJ-066-2014, of July 4, 2014, master Johnny Bravo Cevallos, Manager of the Credit Risk Unit of Banco del Pacífico S.A., with the professional sponsorship of doctor Alejandro Lazo Mora, filed an appeal for review before the Banking Board, regarding the content of letter No. DNEI-SES-2014-0442, of June 26, 2014.

THAT the appellant argues his appeal for review in that his represented entity always had the initiative and will to correct the inconsistencies in the structure information, but that the control body gave very short deadlines for the sending of corrected information which resulted in the appealed sanction; and, that Banco del Pacífico through letter No. AJ-006-2014-AL, of January 17, 2014, had already delivered the information correctly.

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THAT the Secretary of the Banking Board, through letter No. JB-2014-1799, of July 11, 2014, communicated to Banco del Pacífico S.A. the acceptance for processing of said appeal for review and extended the term to hear and resolve the appeal, in application of what is provided in Art. 182 of the General Law of Financial System Institutions.

THAT article 6 of section II.- On responsibility in the sending of information, chapter I.- Norms for the sending and reception of information in media directly processable by computer (MPDC) to the Superintendence of Banks and Insurance, title XII.- On information and publicity, book I.- General norms for the application of the General Law of Financial System Institutions, of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board, states the following:

"ARTICLE 6.- The safeguarding of the confidentiality, integrity, and legibility of the information sent in media directly processable by computer until its receipt by the Superintendence of Banks and Insurance, will always be the exclusive responsibility of the sending entity, which must take all necessary security measures, regardless of the modalities used to send them.

The reporting entity assumes responsibility for the legal, accounting, technical, and any other order accuracy of the data sent to the Superintendence of Banks and Insurance". (Emphasis added)

THAT paragraph 6.2 of article 6 of Section II.- Of sanctions related to the sending of periodic information, chapter I.- Norms for the application of monetary sanctions, title XVI.- Of sanctions and appeals in the administrative venue, book I.- General norms for the application of the General Law of Financial System Institutions, of the Codification of Resolutions ibidem, says:

"ARTICLE 6.- The Superintendent of Banks and Insurance or his delegate, will proceed to impose a fine on the person holding the legal representation of a controlled institution and on the person responsible for preparing the periodic information, when it is incomplete, or suffers from formal errors that prevent its acceptance or validation, according to the following gradation:

(...)

6.2 For other types of information corresponding to periodic requirements generated by mandate of the Law, by current regulations and by the Superintendence of Banks and Insurance, the fine will not be less than US $ 200, nor more than US $ 1,000". (Emphasis added)

THAT from the transcribed norms it is clear that it is under the responsibility of the financial entity the legal, accounting, technical, and any other order accuracy of the information it sends to the Superintendence of Banks and Insurance,

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control body which in turn is empowered to impose fines on those in charge of sending such information when it suffers from formal errors that prevent its acceptance or validation.

THAT in the present case, MBA Johnny Bravo Cevallos, Manager of the Credit Risk Unit of Banco del Pacífico S.A., sent information with errors in structure R02 "Granted Operations", an error that negatively impacted the quality of the information with which the Superintendence of Banks and Insurance prepares statistical reports, conducts financial studies, and attends to requests for information on credit volume.

THAT furthermore, as stated by the National Directorate of Studies and Information both in the technical report contained in memorandum No. DNEI-SES-2014-0532, of August 5, 2014, the arguments exposed by the appellant in this appeal for review instead of disproving the sending of information with inconsistencies in structures R02 "Granted Operations", ratify that Banco del Pacífico S.A. sent information with errors in the aforementioned structure; an event that warrants the imposition of a sanction, as provided for in article 134 of the General Law of Financial System Institutions, in concordance with paragraph 6.2 of article 6, Section II, Chapter I, Title XVI, Book I of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board.

THAT with respect to the appellant's argument that Banco del Pacífico through letter No. AJ-006-2014-AL, of January 17, 2014, had already delivered the information correctly, it is necessary to point out that such argument lacks validity, as stated by the National Directorate of Studies and Information both in letter No. DNEI-SES-2014-0263, of April 11, 2014, and in letter No. DNEI-SES-2014-0442, of June 26, 2014, attached to said letter No. AJ-006-2014-AL, of January 17, 2014, said Bank sent the information for structure R20 "Credit Card Opening" and not the information for structure R02 "Granted Operations", the subject of the appealed fine.

THAT the National Legal Intendancy, through memorandum INJ-DNJ-SAL-2014-0716 of September 25, 2014, recommended to the Banking Board to reject the claim contained in the appeal for review filed; and,

IN exercise of its legal powers,

RESOLVES:

SINGLE ARTICLE.- REJECT the claim contained in the appeal for review presented by MBA Johnny Bravo Cevallos, Manager of the Credit Risk Unit of Banco del Pacífico S.A.; and, consequently CONFIRM the administrative act contained in letter No. DNEI-SES-2014-0442, of June 26, 2014, which ratifies letter No. DNEI-SES-2014-0263, of April 11, 2014, through which the National Director of Studies and Information imposed on MBA Johnny Bravo Cevallos, Manager of the

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Credit Risk Unit of Banco del Pacífico S.A., a fine of US $ 200.00.

COMMUNICATE.- Given at the Superintendence of Banks, in Quito, Metropolitan District, on the thirteenth of May of two thousand fifteen.

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

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

[Signature]
Lcdo. Pablo Cobo Luna
SECRETARY OF THE BANKING BOARD