Circular 33/2008 — Modifying General Provisions for Salary and Labor Benefit Transfers

Thursday, July 31, 2008 OFFICIAL GAZETTE (First Section) 1 CIRCULAR 33/2008 regarding the modifications to the general provisions for the transfer of salary and other labor-related benefits, in accordance with what is provided in Article 18 of the Law for Transparency and Orderly Conduct of Financial Services.

At the margin, a logo, which says: Bank of Mexico.

CIRCULAR 33/2008

TO CREDIT INSTITUTIONS:

SUBJECT: MODIFICATIONS TO THE GENERAL PROVISIONS FOR THE TRANSFER OF SALARY AND OTHER LABOR-RELATED BENEFITS, IN ACCORDANCE WITH WHAT IS PROVIDED IN ARTICLE 18 OF THE LAW FOR TRANSPARENCY AND ORDERLY CONDUCT OF FINANCIAL SERVICES

The Bank of Mexico, based on Articles 28 of the Political Constitution of the United Mexican States, sixth and seventh paragraphs; 24 and 26 of the Bank of Mexico Law; 18 and 22 of the Law for Transparency and Orderly Conduct of Financial Services; 8th, third and sixth paragraphs, 10, as well as Articles 17 fraction I, 20 fraction IV and 25 fraction II, which provide for the attribution of the Bank of Mexico, through the Central Bank Provisions Directorate, the Operations and Payments Systems Directorate and the Financial System Analysis Directorate, to participate in the issuance of provisions, respectively, all of the Internal Regulations of the Bank of Mexico, as well as in the Sole Article of the Agreement on the Affiliation of the Administrative Units of the Bank of Mexico, fractions I, III and IV; with the objective of promoting the proper functioning of payment systems and protecting the interests of the public, and considering the request made by credit institutions through the Mexican Bank Association, A.C., to extend the entry into force and make some modifications to the “General Provisions for the transfer of salary and other labor-related benefits, in accordance with what is provided in Article 18 of the Law for Transparency and Orderly Conduct of Financial Services”, published in the Official Gazette of the Federation on June 11, 2008, due to the operational problems they face to adapt their systems to comply with what is stated in such Provisions, has resolved to modify paragraphs 1, definition of Payroll Service; 2.1; 2.2, first paragraph, item iv) and second paragraph; 2.4; 2.5, first paragraph; 3, first paragraph, and the Sole Transitional Provision; as well as, to add in paragraphs 1., the definition of Employer, 2.2, a third paragraph; 2.5, the second and third paragraphs; paragraph 3., second paragraph, moving the current one to become the third paragraph, and paragraph 4, all of the aforementioned Provisions, to read as follows:

“1. DEFINITIONS

For brevity, it will be understood, in singular or plural, as follows:

. . .

Employer: the person who contracts the Payroll Service with an Ordering Credit Institution and sends the payment instructions for salaries and other labor-related benefits to Ordering Accounts or Receiving Accounts.

Payroll Service: the one provided by credit institutions to Employers through which resources related to salaries and other labor-related benefits of their employees are deposited via electronic fund dispersal.”

2. GENERAL PROVISIONS

“2.1 Clients may instruct the Ordering Credit Institution so that each time they receive their salary and other labor-related benefits in the Ordering Account, such resources are transferred to the Receiving Account.

Thursday, July 31, 2008 OFFICIAL GAZETTE (First Section) 2

When the resources mentioned in the previous paragraph have been available in the Ordering Account no later than 15:00:00 hours, the transfer to the Receiving Account must be carried out on the same Business Day, so that they are credited on that date.

In the event that the resources are available in the Ordering Account after the mentioned time, the transfer to the Receiving Account must be carried out with the necessary advance notice so that said resources are credited no later than the opening of the next Business Day.

The foregoing is without prejudice to the fact that, prior to the transfer, the Ordering Credit Institutions may make charges in the Ordering Accounts: i) when so agreed with the Clients to make the payment of credits granted to them, or ii) in cases where the Clients have authorized it through the direct debit service, for the recurring payment of goods and services.”

“2.2 The instruction referred to in the previous paragraph must contain at least the following requirements:

. . .

iv) CLABE of the Receiving Account or, in its absence, the Debit Card Number.

To this effect, the Ordering Credit Institution must provide to Clients who request it, a format containing the following text:

“Based on Article 18 of the Law for Transparency and Orderly Conduct of Financial Services, I hereby instruct that institution to transfer without cost to my charge the resources that are deposited in my favor in account number ____________ (Ordering Account), to the Receiving Account with CLABE number ________________ (eighteen digits) or, in its absence, to the Debit Card Number ___________________ (sixteen digits), which is held by _______________________ (Name of the credit institution), on days ______ (fixed days on which deposits are received periodically for the concept of salary or other labor-related benefits) or on the Business Day on which the respective resources are deposited in the Ordering Account, in case any of those dates is not a Business Day.

The foregoing, understanding that such resources must be at my disposal in the referred Receiving Account, on the same date they were available in the Ordering Account, provided that this occurred before 15:00:00 hours, or at the latest at the opening of the next Business Day when they were available after said time.

This instruction will take effect no later than the tenth Business Day following the date of this communication and will remain valid until the date on which its cancellation is ordered.”

To comply with the respective instructions, the Ordering Credit Institutions must verify the identity of the Clients, as well as that the Receiving Account is active. This understanding being that they cannot require more documentation than necessary to carry out such verification.”

“2.4 The instructions and cancellation orders referred to in these Provisions may be delivered in writing at any branch of the Ordering Credit Institution, during public service hours. The Ordering Credit Institutions must keep records that evidence the receipt and content of the instructions and cancellation orders received, and must deliver to the Client a copy of the request with the branch stamp, the executive's signature and the date of receipt.”

Thursday, July 31, 2008 OFFICIAL GAZETTE (First Section) 3

“2.5 Credit institutions that maintain Ordering Accounts must disclose through their electronic page on the worldwide web (Internet) and through easily visible posters placed in all their branches, in the months of January and July of each year, the following legend:

“You have the right to have resources deposited in this institution for the concept of salary and other labor-related benefits transferred to another bank without cost.

For this, you only need to instruct us in writing at any of our branches using the format we have available to you.

The foregoing, in accordance with what is provided in Article 18 of the Law for Transparency and Orderly Conduct of Financial Services and the other applicable provisions.”

Likewise, on the first Business Day of each week of the mentioned months, the Ordering Credit Institutions must publish, individually or jointly, in at least two newspapers of wide national circulation the following legend:

“In the event that the bank where you receive your salary and labor-related benefits is not your preferred bank, you have the right to instruct it in writing so that, without cost, it periodically transfers the respective resources to any account you have in the bank of your choice. For your convenience, at all branches of your bank, you will be provided with the format you can use for this purpose.

The foregoing, in accordance with what is provided in Article 18 of the Law for Transparency and Orderly Conduct of Financial Services and the other applicable provisions.”

During each of the mentioned months, no more than one publication shall be made in the same newspaper.”

“3. SEND OF RESOURCES

In order to easily identify the origin of each fund transfer, the Ordering Credit Institution must send to the Receiving Credit Institution, a brief note that allows them to identify that the transfer is carried out in accordance with what is provided in Article 18 of the Law for Transparency and Orderly Conduct of Financial Services, as well as the data or information that the Employer has assigned to make the deposit of the corresponding resources in the Ordering Account.

The Ordering Credit Institutions will not be obligated to attempt to send the respective resources more than once on each of the dates of the month in question indicated in the instructions referred to in paragraph 2.2, when the Receiving Credit Institution has returned the respective payment instruction for any circumstance not attributable to them and, consequently, such resources cannot be credited in the Receiving Account.

Credit institutions cannot charge Clients any amount for the sending and receipt of the transfer of the resources referred to in these Provisions.”

“4. OTHER PROVISIONS

When, based on the terms and conditions that the Ordering Credit Institution agrees with the Employer, the salary and other labor-related benefits are deposited directly in favor of the Client in the account that he has designated for such effect in the institution of his choice, the procedure provided in these Provisions will not apply.”

“TRANSITIONAL

SOLE. These Provisions will enter into force on October 31, 2008.

The foregoing, without prejudice to the fact that credit institutions may offer the fund transfer service referred to in these Provisions, before their entry into force.”

TRANSITIONAL

SOLE. This Circular will enter into force on August 1, 2008.

Mexico, D.F., July 29, 2008.- BANK OF MEXICO: The Director of Financial System Analysis, Pascual Ramón Odogherty Madrazo.- Rubric.- The Director of Operations and Payments Systems, Ricardo Medina Alvarez.- Rubric.- The Director of Central Bank Provisions, Fernando Luis Corvera Caraza.- Rubric.

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