Circular 14/2014 — Modifies Circular 13/2011

(First Section) OFFICIAL GAZETTE Monday, July 28, 2014 BANK OF MEXICO CIRCULAR 14/2014, addressed to Unregulated and Regulated Multiple-Object Financial Societies with Equity Links to Entities Other Than Credit Institutions, Popular Financial Societies, Community Financial Societies, Cooperative Savings and Loan Societies, Financial Entities Acting as Trustees in Trusts Granting Credit or Financing to the Public, and Development Banking Institutions, regarding Modifications to the provisions for the determination of the minimum payment for credit cards.

A logo appears at the margin, stating: Bank of Mexico.

CIRCULAR 14/2014
TO UNREGULATED AND REGULATED MULTIPLE-OBJECT FINANCIAL SOCIETIES WITH EQUITY LINKS TO ENTITIES OTHER THAN CREDIT INSTITUTIONS, POPULAR FINANCIAL SOCIETIES, COMMUNITY FINANCIAL SOCIETIES, COOPERATIVE SAVINGS AND LOAN SOCIETIES, FINANCIAL ENTITIES ACTING AS TRUSTEES IN TRUSTS GRANTING CREDIT OR FINANCING TO THE PUBLIC, AND DEVELOPMENT BANKING INSTITUTIONS:

SUBJECT: MODIFICATIONS TO THE PROVISIONS FOR THE DETERMINATION OF THE MINIMUM PAYMENT FOR CREDIT CARDS

The Bank of Mexico, with the purpose of promoting the sound development of the financial system and protecting the interests of the public, deems it convenient to clarify in the "Provisions for the determination of the minimum payment for credit cards" contained in its Circular 13/2011 the manner in which they must apply the collection of resources resulting from the payment made by the holder of a credit card in each period, in the event that such payment is greater than the minimum required at the cutoff of said period. On the other hand, considering the celebration of operations related to credit cards by some development banking institutions, it is appropriate to apply to said institutions the regime on minimum payment established by the aforementioned Circular 13/2011. Likewise, in attention to the financial entities that, in accordance with the Law for Transparency and Ordering of Financial Services, are subject to the general provisions of the Bank of Mexico regarding the minimum payment amounts that must be charged in credits, loans, or revolving financing associated with a card, it is convenient to more precisely indicate those authorized by the laws applicable to them to issue said cards.

For the above, based on articles 28, paragraphs sixth and seventh, of the Political Constitution of the United Mexican States, 24 and 26, of the Bank of Mexico Law, 18 Bis 7 and 22, of the Law for Transparency and Ordering of Financial Services, 4, paragraph first, 8, paragraphs fourth and seventh, 10, paragraph first, 14 Bis, in relation to 17, fraction I, and 14 Bis 1, in relation to 25 Bis 1, fraction IV, of the Internal Regulations of the Bank of Mexico, which grant it the authority to issue provisions through the General Legal Direction and the General Direction of Financial System Affairs, respectively, as well as Second, fractions I and X, of the Agreement on the Assignment of Administrative Units of the Bank of Mexico, it has resolved to modify the definition of "Issuer" in numeral 1 and add numeral 2.3 to the "Provisions for the determination of the minimum payment for credit cards," contained in Circular 13/2011, to remain in the following terms:

PROVISIONS FOR THE DETERMINATION OF THE MINIMUM PAYMENT FOR CREDIT CARDS

1. DEFINITIONS

"...
Issuer: (i) unregulated multiple-object financial societies, (ii) regulated multiple-object financial societies that maintain equity links with entities other than credit institutions, (iii) popular financial societies with operation level IV, in terms of the Popular Savings and Credit Law, (iv) community financial societies with operation level IV, in terms of the Popular Savings and Credit Law, (v) cooperative savings and loan societies with operation level IV, in terms of the Law for Regulating the Activities of Cooperative Savings and Loan Societies, (vi) financial entities that act as trustees in trusts granting credit or financing to the public, and (vii) development banking institutions, that issue Credit Cards. ..."

"2.3 In the event that the payment made by the holder during a payment period is greater than the Minimum Payment corresponding to said period and, on the other hand, the credit line in question includes a differentiated interest rate scheme, the Issuer must apply the excess of said Minimum Payment, in the first instance, to the amortization of the outstanding balance of the revolving portion with the highest rate."

TRANSITORY

SINGLE. This Circular shall enter into force on December 22, 2014.

Mexico, D.F., July 18, 2014.- The General Legal Director, Luis Urrutia Corral.- Signature.- The General Director of Financial System Affairs, Jesús Alan Elizondo Flores.- Signature.

(First Section) OFFICIAL GAZETTE Monday, July 28, 2014 For any inquiries regarding the content of this Circular, please contact the Authorization, Consultations, and Legal Control Management, at the phones (55) 5237-2308, (55) 5237-2317 or (55) 5237-2000, extension 3200.