Circular 8/2008 — Modifies Circular 15/2007

Thursday, March 13, 2008 OFFICIAL GAZETTE (Second Section) 1

CIRCULAR 8/2008 by which the Resolution is made known by which the general provisions referred to in Article 8 of the Law for the Transparency and Order of Financial Services are modified, regarding the Annual Total Cost (CAT).

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

CIRCULAR 8/2008

TO CREDIT INSTITUTIONS; LIMITED OBJECT FINANCIAL COMPANIES; MULTIPLE OBJECT FINANCIAL COMPANIES; POPULAR SAVINGS AND CREDIT ENTITIES; FINANCIAL ENTITIES THAT ACT AS TRUSTEES IN TRUSTS THAT EXTEND CREDIT TO THE PUBLIC, AS WELL AS TO COMPANIES THAT OF A USUAL MANNER EXTEND CREDITS:

SUBJECT: RESOLUTION BY WHICH THE GENERAL PROVISIONS TO WHICH ARTICLE 8 OF THE LAW FOR THE TRANSPARENCY AND ORDER OF FINANCIAL SERVICES REFERS, IN THE MATTER OF THE COST ANNUAL TOTAL (CAT).

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; 8 and 22 of the Law for the Transparency and Order of Financial Services, as well as on articles 8º third and fourth paragraphs, 10, 14 in relation to 25 fraction II and 17 fraction I, which grant to the General Directorate of Analysis of the Financial System and to the Directorate of Central Banking Provisions, respectively, the attribution to participate in the issuance of provisions, all of them of the Internal Regulations of the Bank of Mexico published in the Official Gazette of the Federation on September 30, 1994, whose last modification was published in the said Gazette on April 26, 2007, with the purpose of promoting the sound development of the financial system and with the object of making some clarifications derived from various queries made by different entities; considering that the Law for the Transparency and Order of Financial Services made known through Decree published in the Official Gazette of the Federation on June 15, 2007, reassigned some powers of this Central Institute to other financial authorities, has resolved to modify subsections h), i) and j) of numeral 4.3 and the first paragraph of numeral 7, as well as to add a subsection k) to the cited numeral 4.3, and a Fourth Transitional Provision, all of the “General provisions referred to in Article 8 of the Law for the Transparency and Order of Financial Services, in the matter of the Annual Total Cost (CAT)”, published in the Official Gazette of the Federation on November 30, 2007, to read as follows:

4. Formula, components and methodology for the calculation of CAT

“4.3 Assumptions for the calculation of CAT

To carry out the calculation of CAT, the following assumptions shall be considered:

…

h) For Credit Card Contracts or revolving credit lines or other Credits in which the maturity date is not specified, it will be assumed that the outstanding balance is amortized at the end of the last period of the third year;

i) In the case of Housing Guaranteed Credits, employer contributions to INFONAVIT that are used to settle mortgage credits shall not be considered;

j) Regarding the CAT that is used for the advertising of Housing Guaranteed Credits, the average value corresponding to each classification range of the type of housing that the Federal Mortgage Society, S.N.C., makes known shall be considered, and the conditions that the Entities establish for credits closest to 15 years and 80%, respectively, and

Thursday, March 13, 2008 OFFICIAL GAZETTE (Second Section) 2

k) It may be considered that all payments or disbursements are made in regular periods.”

“7. Information on CAT

Offers of pre-approved or pre-qualified Credits that the Entities make to specific individuals shall include the specific CAT of the offer.

…”

TRANSITIONAL PROVISIONS

“FOURTH.- In view of the fact that the Law for the Transparency and Order of Financial Services made known through Decree published in the Official Gazette of the Federation on June 15, 2007, assigned to other financial authorities various powers that corresponded to this Central Bank, from the date of entry into force of this Resolution, the Bank of Mexico will not sanction non-compliance that, in their case, multiple banking institutions may have committed with respect to the provisions of Circulars-Telefax 8/2006 and 11/2006 issued on May 25 and August 11, 2006, respectively, regardless of the date on which they were committed.”

UNIQUE TRANSITIONAL PROVISION

The present Circular shall enter into force on the business day following its publication in the Official Gazette of the Federation.

Respectfully,

Mexico, D.F., March 12, 2008.- BANK OF MEXICO: The General Director of Analysis of the Financial System, José Gerardo Quijano León.- Signature.- The Director of Central Banking Provisions, Fernando Luis Corvera Caraza.- Signature.

For any queries regarding the content of this Circular, please go to the General Manager of Authorizations, Consultations and Legal Control Control, located at 5 de Mayo Avenue number 2, sixth floor, Centro Neighborhood, Mexico City, D.F., C.P. 06059, or to the phones 5237.2308, 5237.3200 or 5237.2317.