Regulatory Alerts2016-04-11 | Circular 8/2016Added
Circular 8/2016 — Modification to Circular 22/2010 (Refunds and Prepayment Commission)
The Bank of Mexico amends Circular 22/2010 to prohibit financial institutions from charging prepayment commissions on mortgage credits for housing unless the borrower explicitly chooses this option, which must be registered with the Bank, or selects a substitute product. The amendment also mandates that institutions refund remaining portions of advance-paid commissions upon early contract termination, calculated on a pro-rata daily basis, with an exception for contracts terminated within thirty days. These provisions apply to credit institutions and multiple-object financial societies, with the prepayment commission rules taking effect on October 1, 2016, and the refund rules on January 1, 2017.