Norm on Transparency in Financial Operations

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Resolution No. CD-SIBOIF-796-1-AGOST30-2013
Dated August 30, 2013

NORM ON TRANSPARENCY IN FINANCIAL OPERATIONS

The Board of Directors of the Superintendence of Banks and Other Financial Institutions.

CONSIDERING

I

That Article 52 of Law 561, the General Law of Banks, Non-Bank Financial Institutions, and Financial Groups (LGB), published in La Gaceta, Official Gazette No. 232, of November 30, 2005, states that banks must communicate in writing to their clients the financial conditions to which various active and passive operations are subject, especially nominal or effective interest rates with their respective method of calculation, and that contracts must clearly express the cost of the operation, commissions, or any other charge affecting the client.

II

That Article 53 of the LGB establishes an enumerative list of operations that financial institutions may carry out; stating, in its final part, that the Board of Directors of the Superintendence of Banks and Other Financial Institutions (Board of Directors of the Superintendence) is empowered to issue general administrative norms regarding the execution of any of the operations enumerated in said article, whether carried out by banks or by non-bank financial institutions.

III

That Article 86 of Law No. 733, the General Law of Insurance, Reinsurance, and Surety Bonds, published in La Gaceta, Official Gazette No. 162, 163, and 164, of August 25, 26, and 27, 2010, establishes that advertising and publicity conducted by insurance companies, intermediaries, and insurance auxiliaries within national territory or abroad must comply with the provisions of said Law and the general norms issued by the Board of Directors of the Superintendence. Likewise, Article 92 of the aforementioned Law 733 provides for the right of users to appear before the Superintendence to file complaints or claims against entities providing services regulated by said Law.

IV

That in accordance with Article 53 of Law 842, the Law for the Protection of the Rights of Consumers and Users (Law 842), published in La Gaceta, Official Gazette No. 129, of July 11, 2013, it corresponds to the Superintendence of Banks and Other Financial Institutions to apply the aforementioned Law to institutions subject to its supervision and oversight.

V

That in accordance with Article 61 of Law 842, financial institutions are obligated, before concluding a contract, to supply necessary information so that their clients can understand in a comprehensible, transparent, homogeneous, and exact manner the commissions, expenses, and current and delinquent interest rates that will be charged, aspects that must be developed through regulation, so that clients can perform the respective analysis and comparison;

VI

That the aforementioned Law 842 empowers the Board of Directors of the Superintendence to regulate, in addition to the matter mentioned in the previous paragraph, aspects concerning the presentation of complaints, both before financial institutions and before the Superintendence.

In exercise of its powers,

HAS ISSUED

The following,

Resolution No. CD-SIBOIF-796-1-AGOST30-2013

NORM ON TRANSPARENCY IN FINANCIAL OPERATIONS

CHAPTER I
CONCEPTS, OBJECT, AND SCOPE

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Article 1. Concepts.-
1 For the purposes of applying the provisions contained in this norm, the concepts indicated in this article, whether in uppercase or lowercase, singular or plural, shall have the following meanings:

a) Abusive Clauses: All those contractual stipulations, having been established unilaterally by the financial institution, that are considered contrary to the requirements of good faith, causing an imbalance of rights and obligations to the detriment of its clients and users.

b) Client: (1) a natural or legal person, public, private, or mixed, with whom the institution maintains a commercial relationship arising from the conclusion of a contract; and (2) a natural or legal person, public, private, or mixed, with whom the institution is in phases prior to the conclusion of a contract.

c) Contract of Adhesion: That whose clauses are established unilaterally by the financial institution, without the client being able to negotiate or modify its content at the time of contracting.

d) Contract: Document containing all the rights and obligations corresponding to the client and the institution, including the annexes that establish specific stipulations proper to the financial operation that is the object of the pact and which has been concluded by the contracting parties.

e) Directorate for Attention to Financial Service Users: An administrative instance of the Superintendence of Banks and Other Financial Institutions, created by Law No. 842, the Law for the Protection of the Rights of Consumers and Users.

f) Model Contract of Adhesion: A contract model containing all the rights and obligations that would correspond to the client and the institution in the event of concluding a contract, which is made available to the former on the institution's website. It will include the annexes with specific stipulations proper to a financial operation when applicable, with the aim of understanding the operation or service and/or the obligations and rights of the parties.

g) Formula: Method that allows determining clearly, in detail, and understandably, the principal and the interest that institutions charge or pay for their active and passive products, respectively, as well as the amounts they charge for commissions and expenses derived from the operation.

h) Institution or financial institution: Banks, bank representative offices, and foreign financial companies, special regime financial companies of financial groups, non-bank issuers of credit cards, financial entities, insurance, reinsurance, and surety companies, general warehouses, and entities operating in the securities market and other entities supervised by the Superintendence of Banks and Other Financial Institutions that, as part of their activities, provide attention to the public.

i) Active operations under the installment system: Credit operation under the modality of money disbursement that is repaid according to the payment schedule granted by the institution within the deadline, such as vehicle loans, consumer loans, microcredits, and housing mortgages. Credits granted under the credit card modality are not considered under this definition.

j) Active operations: Credit operations that imply the disbursement of cash or the granting of a credit line under any contractual modality.

k) Passive operations: Fund capture operations under any contractual modality.

l) Passive operations for a determined term: Fund capture operations whose maturity date will depend on the term agreed upon between the client and the institution.

m) Program: Application or software that allows the institution to calculate interest, commissions, and expenses, under the installment system, and that can be used by the client to replicate their particular case.

n) Payment Services: Services that allow deposits and cash withdrawals, the execution of payment operations, the issuance and/or acquisition of payment instruments, and any other functional service for the transfer of money. The foregoing shall also include the issuance of electronic money.

o) Financial services: Deposit services, loans, credits, credit and debit cards, transfers, family remittances, purchase and sale and/or exchange of currencies, insurance, stock market operations, services provided by general warehouses, payment systems, payment service fintech, and any other service provided by regulated financial entities, in accordance with their particular laws according to the sector or industry to which they belong.

p) Superintendence: Superintendence of Banks and Other Financial Institutions.

q) Superintendent: Superintendent of Banks and Other Financial Institutions.

r) Credit card: Instrument or means of legitimization, which may be magnetic or of any other technology, whose possession accredits the right of the cardholder or holder of an additional card to dispose of the credit line in the current account, derived from a prior contractual relationship between the issuer and the cardholder.

s) TCEA: Annual Effective Cost Rate.

t) User: Natural or legal person, public, private, or mixed, who, without having a contractual relationship with the financial institution, acquires, uses, or enjoys a specific financial product or service, or who potentially may acquire, use, or enjoy such a product or service.

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Article 2. Object and scope.- The object of this norm is to establish the type of information that financial institutions must present to their clients regarding the operations or services they provide, as well as the deadlines and the manner in which this information must be presented; in such a way that these have clear, precise, and understandable information to be able to choose for themselves, responsibly, the financial products or services appropriate to their interests and to be aware of the commitments and duties they assume in contracting with financial institutions. Likewise, the norm aims to regulate, among other aspects, the determination of the Annual Effective Cost Rate (TCEA), the contracting of insurance, abusive clauses, the customer service system, and the requirements for filing complaints before the Superintendence. As a general premise, the provisions of this norm shall be applicable to the various financial institutions referred to in the previous article, to the extent that such provisions are pertinent to the products and services offered by said institutions, given the particularities of these products and services, the need to provide timely information to their clients, and the terms of the norm. Within this framework, Chapters I, II, III, V, VI, VIII, XI, XII, XIII, and XIV shall be applicable to insurance companies, insofar as pertinent. Chapters IV, VII, IX, and X shall be applicable if insurance companies grant credits.

The provisions of this norm shall be applicable both to clients and to users of financial institutions, insofar as applicable, according to the service or attention provided in each case.

CHAPTER II
GENERAL PRINCIPLES

Article 3. Rights of clients and users of financial services.-
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Without prejudice to what is established in Article 54 of Law 842, clients and users of financial services have, among others, the following rights:

a) To be informed in a clear, complete, timely, and adequate manner about the scope and consequences of the financial services to be contracted and changes in previously agreed conditions;

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within the framework of a financial culture and responsible consumption in relation to this type of products and services;

b) To select and access financial products or services in the scope of free competition, offered by the various institutions providing financial services;

c) To be notified by the financial institution in a verifiable manner of the negative decision issued by the institution regarding the contracting of the financial product or service previously requested by the user, or of the cancellation or suspension of product or service contracts. Without prejudice to what is established in Article 4, item e) of this norm, in the event of unilateral cancellation or suspension of financial products or services, the affected user may file their complaint directly with the Superintendence in order to request the restitution of their rights, if it so resolves;

d) To be attended to timely and diligently in the case of complaints, reports, or inquiries submitted;

e) To be notified in a verifiable manner about the status of the procedure and the final resolution of their complaint, report, claim, or inquiry; and

f) To receive adequate treatment in any inquiry, contracting, or complaint regarding financial services.

g) To have the privacy of their data respected, which have not been provided expressly to the service-providing entities.

Article 4. Obligations of clients and users of financial services.- In accordance with Article 55 of Law 842, clients and users of financial services have the following obligations:

a) To read the contract to be signed with the service-providing institution prior to contracting.

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b) To request any clarification needed regarding the financial product to be contracted prior to contracting.

c) To update any changes to the information provided to the institution with which they have contracted any financial service.

d) To sign each document of authorization, expansion of information, or other derivatives of the financial product or service contracted, of which a copy will be delivered to them at the time of signing.

e) In the case of a complaint or challenge of charges, they must exhaust the first-instance channel before the service-providing financial institution, and if they do not consider the resolution issued by the institution satisfactory or in the absence of a response from it, they may appeal to the Superintendence.

f) To comply with the obligation acquired in strict adherence to the stipulations agreed upon in the signed contract, including paying what is owed in the time, manner, and conditions established in the respective agreement or contract.

Article 5. Duty of information and transparency.-
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Financial institutions must provide their clients with clear, adequate, intelligible, and complete information about the products and services they offer and their corresponding costs, as well as the conditions of the contracts that have such products and services as their object.

Financial institutions must provide their clients with relevant information before, during, and after the conclusion of the contract. Likewise, financial institutions must inform their clients of the negative decision regarding the contracting of the requested financial product or service or of the cancellation or suspension of contracts for these products or services, leaving verifiable record that the respective notification was made. Such decisions must be notified with a copy to the Superintendence and must be based on express law, regulations or resolutions issued by this regulatory body, and/or on legally justified causes, which must be made known to the user, except in cases established within the corresponding legal framework. The negative decision regarding the contracting of a new product or service must be notified by the financial institution to the applicant no later than thirty (30) calendar days, counted from the receipt of all information and/or documentation required for the processing of the application. Negative decisions regarding the contracting of a new product or service, or regarding the cancellations or suspensions thereof, shall not be disclosed to the person affected by such decisions.

Financial institutions must be fully transparent in the dissemination, application, and modification of interest rates, commissions, expenses, and any other fee associated with active and passive operations they carry out, as well as to the services they provide. It is the obligation of financial institutions to publish on their website and inside their public service offices the fees charged and the crediting times for each payment service offered to the general public.

Likewise, institutions must provide clients with basic fiscal information that, according to tax regulation, is applicable to the products or services they provide, allowing them to know the real fiscal costs of the product or service, all within the reasonable scope proper to the activity of a financial institution.

Article 6. Customer service.- Financial institutions must have a customer service system that allows clients to obtain clear, fast, and reliable information about financial products and services, as well as about the procedures related to them and mechanisms for resolving complaints.

Article 7. Advertising.- The advertising used by financial institutions must be clear and not misleading, adequately reflecting the conditions of the advertised product or service, without it inducing or being able to induce confusion or error in its recipients.

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Promotional conditions that incentivize the contracting of the offered financial products or services must be maintained by the institution during the offered period, and if applicable, for the number of units offered or for any other circumstance to which the promotional condition is subject.

Prizes, promotions, or discounts offered by financial institutions must be regulated, including in these the restrictions, deadlines, nature, and forms of compliance; the restrictions must be highlighted in a relevant manner that allows the potential client to know them, using a font size greater than or equal to the largest one used to advertise the prizes, promotions, or discounts offered by the institutions. Such regulation must be kept available to the public, at least, in their customer service locations and on the institution's website. Likewise, in the advertising used by the financial institution, the places where people can consult this regulation must be indicated.

Article 8. Responsibilities of the board of directors and management.- The board of directors of each institution is responsible for approving general policies that allow the institution to have an adequate customer service system, including aspects concerning the handling of inquiries and complaints. Likewise, the general management will be responsible for developing and implementing the necessary procedures to comply with said policies and with the provisions contained in this norm.

Article 9. Internal audit.- The functioning of the customer service system, as well as the institution's compliance with the provisions contained in this norm, must be evaluated by the institution's internal audit unit; and the result of this evaluation must be reported semi-annually to the board of directors in order for this governing body to remain informed and to allow it to correct or improve matters related to the institution's customer attention.

CHAPTER III
CRITERIA APPLICABLE TO COMMISSIONS AND EXPENSES

Article 10. Commissions and expenses.- A commission for an operation or a service is a remuneration that will be determined by the institution for the provision of a service that it has effectively provided and that has previously been agreed upon with the client. On the other hand, expenses are those costs incurred by the institution with third parties on behalf of the client to meet requirements linked to operations that, according to what was agreed, will be charged to the client.

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The rates that institutions disseminate and apply for the services they provide must comply with the criteria mentioned above, being classified as commission or expense, as appropriate.

Under no circumstances may commissions and expenses be applied to the client or insurance premiums be charged for concepts not requested, not agreed upon, or not previously authorized by the client.

Article 11. Basis for commissions and expenses.- Financial institutions must have the basis for the commissions and expenses they charge. This basis must be disaggregated by client or operation, as appropriate.

The requirement for technical justification aims to substantiate that commissions correspond to services effectively provided while expenses correspond to real costs incurred with third parties, in accordance with the provisions of the previous article. In the case of expenses, the cost basis must justify the amount recorded under such concept.

CHAPTER IV
CRITERIA APPLICABLE TO INTEREST RATES

Article 12. Determination of interest rates.-
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Current and delinquent interest rates must be expressed in effective annual form for active operations granted under the installment system, regardless of whether, additionally, they are expressed in their equivalent for other periods. For these purposes, when it comes to active operations, the basis for calculating the effective interest rate will be that the year has 360 days. For the case of credit cards, what is established in the regulation governing this matter will be followed. When it comes to passive operations, the basis for calculating the effective interest rate will be that the year has 365 days.

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The interest rates that institutions disseminate and apply must comply with the criteria mentioned above.

Article 13. Variable interest rates.- When institutions use rates that depend on a variable factor, it must be specified precisely and unequivocally the manner in which it will be determined at each moment, including its frequency of change, if applicable.

In the event of agreeing on a rate that replaces the reference rate, the same must be clearly determined, as well as the conditions under which its modification would be carried out.

CHAPTER V
OBLIGATION AND MECHANISMS FOR DISSEMINATION OF INTEREST RATES, COMMISSIONS, EXPENSES, PRODUCTS, AND SERVICES

Article 14. Dissemination of interest rates, commissions, expenses, products, and services.- Institutions must inform their clients of current and delinquent interest rates, commissions, and expenses associated with the different products and services they offer. This information must be disseminated in a clear, explicit, and understandable manner in order to avoid that its text may generate confusion or incorrect interpretations.

Regarding information related to insurance that institutions, according to their policies, may need to agree upon regarding operations that require it, they must provide the client with a list of authorized insurance companies to issue this type of policy, so that the client may decide with

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1
Arto. 1, amended on April 6, 2021 - Resolution No. CD-SIBOIF-1240-2-ABR06-2021

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Arto. 3, amended on April 6, 2021 - Resolution No. CD-SIBOIF-1240-2-ABR06-2021

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Arto. 5, amended on April 6, 2021 - Resolution No. CD-SIBOIF-1240-2-ABR06-2021

4 Arto. 12, amended on December 13, 2013 - Resolution No. CD-SIBOIF-814-2-DIC13-2013