Circular 17/2009 — Limits on the Charging of Commissions

Tuesday, July 21, 2009 OFFICIAL GAZETTE (First Section) 74

CIRCULAR 17/2009, General Provisions Regarding the Charging of Commissions.

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

CIRCULAR 17/2009

TO CREDIT INSTITUTIONS, LIMITED-OBJECT FINANCIAL SOCIETIES AND REGULATED MULTIPLE-OBJECT FINANCIAL SOCIETIES

SUBJECT: COMMISSIONS

The Bank of Mexico, based on Articles 28 of the Political Constitution of the United Mexican States, sixth and seventh paragraphs; 24 of the Bank of Mexico Law; 4 and 22 of the Law for Transparency and Ordering of Financial Services; 48 of the Credit Institutions Law, as well as 8th paragraphs third and sixth, 10, 14 in relation to 25 fraction II; 12 in relation to 20 fraction IV and 17 fraction I, which provide for the powers of the Bank of Mexico through the General Directorate of Financial System Analysis, the General Directorate of Central Banking Operations, and the Directorate of Central Banking Provisions, of issuing provisions, all of them from the Internal Regulations of the Bank of Mexico, Single Agreement on the Affiliation of the Administrative Units of the Bank of Mexico, fractions I, III and IV, considering that:

I. The record of commissions kept by the Bank of Mexico has been useful to obtain information on the basis of which it is convenient to:

a) Eliminate inadequate practices regarding the charging of commissions that have been the subject of observation to date in accordance with said record; b) That the commissions that financial entities determine regarding the active, passive, and service operations they enter into or offer, as well as the mechanisms for charging them, be clear and transparent, and c) That said financial entities only charge commissions linked to services effectively provided, operations carried out, or acts of the clients.

II. On June 25, 2009, the "Decree by which various provisions of the Credit Institutions Law, the Law for Transparency and Ordering of Financial Services, and the Law for Protection and Defense of Financial Services Users are reformed, added to, and repealed" was published in the Official Gazette of the Federation, pursuant to which the charging of commissions for the concept of overdraft or attempted overdraft in credits, loans, or revolving financings associated with cards, as well as in personal liquidity credits without real guarantee, is not permitted.

Therefore, in exercise of its power to regulate commissions provided for in the aforementioned legal provisions, with the object of protecting the interests of the public and promoting the sound development of the financial system, the Bank of Mexico has resolved to issue the following:

GENERAL PROVISIONS REGARDING THE CHARGING OF COMMISSIONS

1. DEFINITIONS

For brevity, the following terms, in singular or plural, shall be understood as:

Client: the person who enters into any passive, active, or service operation with a Financial Entity, receives any Credit, or uses Means of Disposition issued by it.

Credit: the credits, loans, or financings that Financial Entities grant to the general public, whether they offer them directly or through a third party, when they document them through adhesion contracts and their amount is less than the equivalent of 900,000 UDIS or they are credits guaranteed by housing, as referred to in the Law on Transparency and Promotion of Competition in Guaranteed Credit, for any amount.

Commission: any charge, other than interest, regardless of its denomination or modality, that a Financial Entity charges directly or indirectly to a Client for the entry into active, passive, or service operations, including the use of Means of Disposition.

Financial Entity: credit institutions; limited-object financial societies and regulated multiple-object financial societies.

Means of Disposition: debit cards or cards for access to automated teller machines associated with demand money bank deposits; credit cards issued under the auspices of a credit opening contract; prepaid bank cards, checks, and fund transfer orders, including the service known as direct debit.

UDIS: investment units as referred to in the "Decree by which the obligations that may be denominated in Investment Units are established and various provisions of the Federal Tax Code and the Income Tax Law are reformed and added to", published in the Official Gazette of the Federation on April 1, 1995.

2. LIMITATIONS ON THE CHARGING OF COMMISSIONS

2.1 Financial Entities shall not charge Commissions:

a) That cannot be included in the Annual Total Cost, calculated in accordance with the "General Provisions referred to in Article 8 of the Law for Transparency and Ordering of Financial Services, regarding the Annual Total Cost (CAT)" and its modifications.

Charges for the concept of early payment, late payment, and default shall not be subject to this limitation.

b) Alternatives, unless the Commission charged is the lowest.

c) For the cancellation of credit cards.

2.2 Credit institutions, in addition to what is provided in item 2.1, shall not charge Commissions:

a) In demand deposit accounts, for account management and for not maintaining a minimum balance, simultaneously within the same period covered in the account statement.

b) When requiring that a deposit account be opened to make charges related to the payment of any Credit they have granted, for the following concepts: i) opening; ii) management, and iii) for not maintaining a minimum average balance.

c) For the return, for any cause, of checks that they have received for credit to a demand money bank deposit account.

d) For the return, for any cause, of checks that they have received as a means of payment of any Credit for which they are creditors.

e) For exceeding the balance of the demand money bank deposit account associated with a debit card derived from transactions carried out with it.

f) For attempting to exceed the balance of the demand money bank deposit account associated with a debit card derived from transactions carried out with it.

g) For the cancellation of deposit accounts.

h) For the cancellation of Means of Disposition.

i) For the cancellation of the electronic banking service.

2.3 Regarding fund transfer orders, credit institutions shall not differentiate the amount of Commissions based on the amount of the transfer.

TRANSITORY

SINGLE. These Rules shall enter into force on August 21, 2009.

Mexico, D.F., July 17, 2009.- BANK OF MEXICO: the General Director of Financial System Analysis, José Gerardo Quijano León.- Signature.- The Director of Central Banking Provisions, Fernando Luis Corvera Caraza.- Signature.- The General Director of Central Banking Operations, David Aarón Margolín Schabes.- Signature.

Tuesday, July 21, 2009 OFFICIAL GAZETTE (First Section) 76

For any inquiries regarding the content of this Circular, please contact the Department of Authorizations, Consultations, and Legal Control, located at Avenida 5 de Mayo number 2, sixth floor, Colonia Centro, Mexico City, Federal District, C.P. 06059, or at the phones 5237.2308, 5237.2000 ext. 3200 or 5237.2317.