2008-09-25 | Circular 44/2008

Added

Circular 44/2008 — Modifies Circular 27/2008

The Bank of Mexico amends Rule 12 of the General Rules for Credit Information Societies to mandate the removal of credit history data based on the outstanding principal balance and time elapsed. Specifically, information must be deleted after 12 months for balances up to 25 UDIS, 24 months for balances between 25 and 500 UDIS, and 48 months for balances between 500 and 1,000 UDIS, calculated from the first date of default reporting or last update. The rule also requires the deletion of observation or prevention keys, with prevention keys only removed if the total outstanding principal for a client with a specific creditor is under 400,000 UDIS. This circular entered into force on September 29, 2008.

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Thursday, September 25, 2008 OFFICIAL GAZETTE (First Section) 1

CIRCULAR 44/2008 containing the modifications to the General Rules to which the operations and activities of credit information societies and their users must be subject.

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

CIRCULAR 44/2008

TO THE CREDIT INFORMATION SOCIETIES:

SUBJECT: MODIFICATIONS TO THE GENERAL RULES TO WHICH THE OPERATIONS AND ACTIVITIES OF CREDIT INFORMATION SOCIETIES AND THEIR USERS MUST BE SUBJECT

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; 12 and 23, eighth paragraph, of the Law to Regulate Credit Information Societies; 22 of the Law for Transparency and Ordering of Financial Services; 8th, third and sixth paragraphs, 10, 14 in relation to 25, fraction II, and 17, fraction I, which provide for the attribution of the Bank of Mexico through the General Directorate of Financial System Analysis and the Directorate of Central Banking Regulations, respectively, all of the Internal Regulations of the Bank of Mexico; Unique, fractions III and IV of the Agreement on the Assignment of Administrative Units of the Bank of Mexico, and with the objective of promoting the healthy development of the financial system, has resolved to make adjustments to the Twelfth of the “General Rules to which the operations and activities of Credit Information Societies and their Users must be subject”, in order that the elimination of credit information generates greater benefits for Clients, to remain in the following terms:

GENERAL RULES TO WHICH THE OPERATIONS AND ACTIVITIES OF CREDIT INFORMATION SOCIETIES AND THEIR USERS MUST BE SUBJECT

CHAPTER V

General Provisions

“TWELFTH.- Societies must eliminate from credit histories the information relating to any credit that has been reported as overdue or, the credit information regarding which the User has ceased to update the records, as follows:

I.- If the outstanding principal balance is equal to or less than the equivalent of twenty-five UDIS, after twelve months counted from the date that occurs first, either the date on which the credit was first reported as overdue, or from the last time the User updated the credit record;

II.- If the outstanding principal balance is greater than the equivalent of twenty-five and up to five hundred UDIS, after twenty-four months counted from the date that occurs first, either the date on which the credit was first reported as overdue, or from the last time the User updated the credit record, and

III.- If the outstanding principal balance is greater than the equivalent of five hundred and up to one thousand UDIS, after forty-eight months counted from the date that occurs first, either the date on which the credit was first reported as overdue, or from the last time the User updated the credit record.

In the case of overdue credits where there is information both of defaults and of payments, all negative information, as well as positive information, must be eliminated, in accordance with what is provided in items I, II, and III of this Rule, as applicable.

Additionally, when Societies effect the elimination of the information of the credits referred to in items I, II, and III above, they must delete, as applicable, the respective observation or prevention keys. Regarding prevention keys, their elimination will only proceed when the sum of the outstanding principal balances of the credits of a Client regarding the same creditor is less than the equivalent of four hundred thousand UDIS.

For the purposes of this Rule, overdue credits shall be understood as those defined as such in the applicable provisions issued by the Commission and the calculation of the outstanding principal balance of the overdue credits will be carried out using the value of the UDI corresponding to the first banking business day of the calendar year in which the deletion must be carried out, in accordance with the publication made by the Bank of Mexico in the Official Gazette of the Federation.

Societies shall not eliminate the credit histories referred to in this Rule that fall under the cases provided in fraction II of Article 24 of the Law.”

TRANSITORY

UNIQUE. This Circular shall enter into force on September 29, 2008.

Thursday, September 25, 2008 OFFICIAL GAZETTE (First Section) 2

Mexico, D.F., September 23, 2008.- BANK OF MEXICO: The General Director of Financial System Analysis, José Gerardo Quijano León.- Signature.- The Director of Central Banking Regulations, Fernando Luis Corvera Caraza.- Signature.

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, Centro Neighborhood, Mexico City, D.F., C.P. 06059, or at the phones 5237.2308, 5237.2000 ext. 3200 or 5237.2317.

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