Thursday 1 December 2022

Banco Scotiabank to cancel credit cards of 20,000 clients to meet interest rate cap

Scotiabank confirmed that the decision is based on the arrival of the usury law in Costa Rica

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1 December 2022 - At The Banks - BCCR

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(QCOSTATICA) Scotiabank Costa Rica announced this week it will cancel, over the course of the next six months, credit cards to some 20,000 clients to comply with the new interest rate caps, imposed in the usuary law recently enacted.

Scotiabank confirmed that the decision is based on the arrival of the usury law in Costa Rica

Likewise, the bank explained that it will make changes to their credit card loyalty programs; but he did not detail what the variations will be.

“A fraction of the population, due to new reforms and additions to the (usury) law, will seek informal financing alternatives, and banks will have to be disruptive to offer the market solutions tailored to this new reality,” the financial institution reported.

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Scotiabank is one of the last private banks to reveal the measures applied to comply with the reform of Ley 7472 (Promoción de la competencia y defensa efectiva del consumidor), which establishes, among others, that the Banco Central (Central Bank) will set maximum rates at which it is possible to lend in the country.

Last Friday, July 3, the Central Bank set for all types of credits (except microcredits), the maximum rates at 37.69%, in colones, and 30.36%, in dollars. For microcredits, it established them at 53.18% and 42.99%, respectively. For credits in other currencies (ie Euros), 7.44%.

“We continue to closely monitor the scope of the reforms and additions to the law and, in some respects, pending the regulation to have even more clarity on the next steps,” Scotiabank told the Q.

BAC Credomatic, one of the largest card issuers in the country, will cut 187,526 credit cards to 79,789 customers, whose operations become deficient for the company.

 

 

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