Resolution No. CD-SIBOIF-635-1-JUL7-2010
Dated 07 July 2010

REFORM STANDARD OF ARTICLES 1 AND 29 OF THE STANDARD FOR CREDIT CARD OPERATIONS

The Board of Directors of the Superintendency of Banks and Other Financial Institutions,

WHEREAS

I

That Law 515, Law for the Promotion and Regulation of the Use of Credit Cards, in article 1, establishes that the Superintendency of Banks and Other Financial Institutions, hereinafter the Superintendency, shall be the body responsible for the regulation and supervision of credit card issuers.

II

That in articles 2, 14 and 16 of the aforementioned Law, the Board of Directors of the Superintendency is empowered to issue the necessary standards for the correct application of the Law, ensuring an innovative incorporation that guarantees the rights of all operators of commercial traffic with emphasis on the right of cardholders.

In use of its powers,

HAS ISSUED

The following,

CD-SIBOIF-635-1-JUL7-2010

REFORM STANDARD OF ARTICLES 1 AND 29 OF THE STANDARD FOR CREDIT CARD OPERATIONS

FIRST: Reform articles 1 and 29 of the Standard for Credit Card Operations, contained in Resolution No. CD-SIBOIF-629-4-MAY26-2010, dated 4 May 2010, which shall read as follows:

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

a) Cycle: Period between two cut-off dates.

b) Purchases of goods or services: Are those made with affiliated establishments, as well as those that the issuer contracts or obtains for the cardholder with the authorization of the latter, such as: life insurance for outstanding balance, insurance against theft and fraud, emergency insurance, payments for electricity, water, telephone, cable services.

c) Automatic debits: Correspond to purchases or payments of goods and services, which are automatically debited from the cardholder's credit line, such as: payment for telephone, electricity, cable, school services.

d) Days of delinquency: The days counted from the day following the payment due date established in the account statement.

e) Issuer: Legal entities domiciled in Nicaragua constituted as corporations, which issue credit cards for national or international use or in both modalities either individually or jointly with another issuer (co-issuer). The foregoing without prejudice to legal entities domiciled abroad that engage in such business.

f) Account statement: Detail prepared by the issuer that contains information on the amount owed by the cardholder at a certain date, which can be provided to the user in printed or electronic form.

g) Cut-off date: The scheduled date for the end of the corresponding financing cycle.

h) Payment due date: Last date on which the cardholder must make, at least, the minimum payment indicated in their account statement under penalty of incurring delinquency. If the last payment date falls on a Sunday or a holiday, it will be moved to the next business day.

i) Formula: Calculation method that allows determining clearly, in detail, and understandably, the principal and interest charged by issuers in credit card operations, as well as the amounts charged for commissions and expenses derived from the operation.

j) Superintendency Law: Law 316, Law of the Superintendency of Banks and Other Financial Institutions and its reforms.

k) General Banking Law: Law 561, General Law of Banks, Non-Bank Financial Institutions and Financial Groups, published in the Gaceta Diario Oficial No. 232, of 30 November 2005.

l) Law No. 515: Law No. 515, Law for the Promotion and Regulation of the Use of Credit Cards, published in La Gaceta, Diario Oficial No. 11 of 17 January 2005.

m) Credit limit: Maximum limit in the agreed currency, which the issuer makes available to the cardholder through the conditions stipulated in the contract. Interest and charges derived from the use of the credit card form part of the limit.

Superintendency of Banks and Other Financial Institutions

REPUBLIC OF NICARAGUA - CENTRAL AMERICA

n) Delinquency: Situation that occurs when the cardholder does not make at least the minimum payment indicated in their account statement by the payment due date.

o) Grace period: The period granted by the issuer in the contract, during which it does not charge current interest on purchases of goods and services or cash withdrawals made by the cardholder in a given cycle.

p) Principal: Amount owed for purchases of goods, services or cash withdrawals.

q) Promotions or Discounts: Corresponds to temporary or specific promotions or discounts related among others to the interest rate or payment of interest offered by the issuer temporarily, whereby once the promotion or discount period ends, the credit card will readjust to the previously established conditions.

r) Outstanding balance: Corresponds to the total owed by the cardholder at a given date (principal, current and default interest, charges and commissions) net of payments made in the cycle.

s) Outstanding principal balance in delinquency: Corresponds to the portion of principal included in the minimum payment quota of the cycle, paid partially or not paid before the payment due date.

t) Promoted services: Correspond to purchases or payments for services that the issuer promotes for the cardholder, such as: fraud insurance, life insurance, medical insurance, tow truck services.

u) Overdraft: Amount used or charged in excess of the authorized credit limit.

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

w) Superintendency: Superintendency of Banks and Other Financial Institutions.

x) Cardholder: Natural or legal person who, prior contract with the issuer, is authorized to use a revolving credit line.

y) Credit card: The instrument or means of legitimation, which may be magnetic or of any other technology, whose possession accredits the right of the cardholder or additional cardholder to draw on the revolving credit line, derived from a prior contractual relationship between the issuer and the cardholder.

z) Additional card: Credit card that the cardholder authorizes to be issued in favor of the natural or legal persons he designates.

aa) Annual current interest rate: It is the annual interest rate applied to the principal balance.

Managua, Nicaragua

SIBOIF Building - Km. 7 Carretera Sur

PBX Telephone: 2265-1555 P.O. Box 788

web: www.siboif.gob.ni

Email: correo@siboif.gob.ni

bb) Daily current interest rate: The interest rate resulting from dividing the annual current interest rate agreed in the contract by a base of days, which must be equal to the total number of days subject to interest charges in the calendar year.

cc) Annual default interest rate: Corresponds to the interest rate additional to the annual current interest rate agreed that issuers may charge on credit obligations in default; which may not exceed 50% of the agreed current interest rate.

dd) Daily default interest rate: The interest rate resulting from dividing the annual default interest rate by a base of days, which must be equal to the total number of days subject to interest charges in the calendar year.

ee) Fixed interest rate: Interest rate not variable during the term of the contract.

ff) Variable interest rate: Corresponds to an interest rate that varies according to changes in the reference rate or index, plus the percentage points established in the contract.

gg) Floating transaction: The transaction made by the cardholder or additional cardholder that has not been charged by the affiliated establishment. Such transactions affect the credit limit of the card.

Article 29. Consequences of the claim.- When it involves contesting charges, the following rules apply:

a) The issuer may not impede or hinder in any way the use of the credit card within the authorized credit limit, it being understood that the contested amount shall form part of said limit until the contest is resolved.

b) The issuer may require the minimum payment of the uncontested items.

SECOND: This Standard shall enter into force in accordance with the following provisions:

a) For bank or non-bank financial issuers authorized and supervised by the Superintendency as of its notification, without prejudice to its publication in La Gaceta, Official Gazette.

b) For the rest of the issuers, as of its publication in La Gaceta, Official Gazette.

Irrelevant parts follow. (f) A. Rosales B. (f) V. Urcuyo V. (f) Gabriel Pasos Lacayo (f) Fausto Reyes B. (f) illegible (Silvio Casco Marenco) (f) A. Morgan P. Secretary Ad Hoc.

URIEL CERNA BARQUERO
Secretary Board of Directors SIBOIF