JPRF-F-2025-0140 — Reforms to the Standard for the Strengthening of Savings and Credit Cooperatives and Mutual Savings and Credit Associations for Housing

Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas Government Financial Management Platform. Red Block, 8th floor
| Postal Code: 170507 | Quito - Ecuador |
Resolution No. JPRF-F-2025-0140
THE FINANCIAL POLICY AND REGULATION BOARD
CONSIDERING:
That, Article 82 of the Constitution of the Republic of Ecuador recognizes that the right to legal certainty is based on respect for the Constitution and the existence of prior, clear, public legal norms applied by competent authorities; That, Article 308 of the Supreme Norm determines that the national financial system is composed of the public, private, and popular and solidary sectors, which intermediates public resources. Each of these sectors will have specific and differentiated control norms and entities, which will be responsible for preserving their safety, stability, transparency, and solidity; That, Article 309 ibidem prescribes that the national financial system is composed of the public, private, and popular and solidary sectors, which intermediates public resources; determining that each of these sectors will have specific and differentiated control norms and entities, which will be responsible for preserving their safety, stability, transparency, and solidity; That, Article 14 of the Organic Code of Money and Finance, Book I, determines that the Financial Policy and Regulation Board is responsible for formulating credit, financial, including insurance, prepaid comprehensive health care services, and securities policies; That, Article 14.1 numeral 1 of the aforementioned Code establishes as a function of the Financial Policy and Regulation Board the regulation of the creation, constitution, organization, activities, operation, and liquidation of financial entities, securities, insurance, and prepaid comprehensive health care services; That, Article 1583 of the Civil Code provides that obligations are extinguished, in whole or in part, by novation; That, Article 1644 of the Civil Code establishes that novation is the substitution of a new obligation for an earlier one, which is therefore extinguished; That, Article 15 of the Organic Administrative Code enshrines the principle of responsibility, establishing that the State will be liable for damages resulting from the lack or deficiency in the provision of public services, as well as for actions or omissions of its public servants or subjects of private law who act in the exercise of a public power delegated by the State, including their dependents, controlled entities, or contractors; That, the Technical Secretary of the Financial Policy and Regulation Board, through Memorandum No. JPRF-ST-2025-0007-M of February 20, 2025, submits to the President of the Board the Technical Report No. JPRF-CTSF-2025-004 and the Legal Report No. JPRF-CJF-2025-005, of February 18 and 19, 2025, respectively, as well as the respective draft resolution; That, the Financial Policy and Regulation Board, in an ordinary session held by technological means, convened on February 20, 2025, and carried out via video conference on February 24, 2025, reviewed the Memorandum JPRF-ST-2025-0007-M of February 20, 2025, issued by the Technical Secretary of the Board; as well as the Technical Report No.
JPRF-CTSF-2025-004 and the Legal Report No. JPRF-CJF-2025-005 of February 18 and 19, 2025, respectively, issued by the Technical Coordination of Policy and Regulation of the Financial System and by the Legal Coordination of Policy and Financial Norms, and the corresponding draft resolution;

Resolution No. JPRF-F-2025-0140

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas Government Financial Management Platform. Red Block, 8th floor
| Postal Code: 170507 | Quito - Ecuador |
That, the Financial Policy and Regulation Board, in an ordinary session held by technological means, convened on February 20, 2025, and carried out via video conference on February 24, 2025, reviewed and approved the following Resolution; and, In exercise of its functions, RESOLVES:
ARTICLE FIRST.- Substitute Article 5 of Section II "Standard for the Strengthening of Savings and Credit Cooperatives and Mutual Savings and Credit Associations for Housing" of Chapter XXXVI "Popular and Solidary Financial Sector", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following:

"Art. 5.- Savings and credit cooperatives, with the prior approval of their respective Boards of Directors, may require their members to contribute up to 3% of the amount of the credit disbursed in their favor, which will be destined to strengthen the Indivisible Legal Reserve Fund.
If deemed pertinent, the Superintendence of the Popular and Solidary Economy, in accordance with the analysis of the situation of each financial entity, given its degree of vulnerability to risks and the projection of its economic and financial condition, may order that, on an obligatory basis, the financial entity allocate up to 3% of the amount of the credit disbursed in favor of its members to strengthen the Indivisible Legal Reserve Fund, in order to prevent a future non-compliance with the minimum solvency level. The application of the percentage will be only on original credit operations and will not apply to restructured or refinanced operations. In the case of novated operations that contemplate the disbursement of additional resources in relation to the balance of the operation being novated, the percentage will be applied only on said additional resources. The percentage destined to strengthen the Indivisible Legal Reserve Fund will not be considered for the calculation and reporting of the effective active interest rates established by the Financial Policy and Regulation Board. For credits with a term of less than one year, the calculation of the percentage to be allocated to the Indivisible Legal Reserve Fund will be up to 3% annually, calculated proportionally to the term of the credit operation. If the term is greater than one year, the calculation and collection will be carried out in a single instance. This article will apply to mutual savings and credit associations for housing, only with respect to original credits granted to their members; it will not apply to restructured or refinanced operations and will serve to strengthen the 'Indivisible Legal Reserve' account. In the case of novated operations granted to their members that contemplate the disbursement of additional resources in relation to the balance of the operation being novated, the percentage will be applied only on said additional resources."

ARTICLE SECOND.- Add a General Provision in Section II "Standard for the Strengthening of Savings and Credit Cooperatives and Mutual Savings and Credit Associations for Housing" of Chapter XXXVI "Popular and Solidary Financial Sector", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following text:

Resolution No. JPRF-F-2025-0140

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas Government Financial Management Platform. Red Block, 8th floor
| Postal Code: 170507 | Quito - Ecuador |
"GENERAL PROVISIONS
FIRST.- The Superintendence of the Popular and Solidary Economy will establish the corresponding control and supervision actions to verify compliance with what is established in this standard. If contributions from credits to the 'Indivisible Legal Reserve Fund' or 'Indivisible Legal Reserve', as applicable, are identified that do not observe what is established in this standard, the control body will order their reversal and return in favor of the contributing member in their savings account."

GENERAL PROVISIONS
FIRST.- The Superintendence of the Popular and Solidary Economy will notify the content of this Resolution to its controlled entities within three (3) days.
SECOND.- The Superintendence of the Popular and Solidary Economy will adapt the content of its control norms corresponding to what is established in this Resolution, within a term of thirty (30) days.
FINAL PROVISION.- This Resolution will enter into force from the present date, without prejudice to its publication in the Official Register, and will be published on the institutional website of the Financial Policy and Regulation Board within a maximum term of two days from its issuance.
NOTIFY.- Given in the Metropolitan District of Quito, on February 24, 2025.
THE PRESIDENT,
Mgs. María Paulina Vela Zambrano
The aforementioned Resolution was processed and signed by Master María Paulina Vela Zambrano, President of the Financial Policy and Regulation Board, in the Metropolitan District of Quito, on February 24, 2025.- I CERTIFY.
TECHNICAL SECRETARY,
Mgs. Luis Alfredo Olivares Murillo