Legislators of the Legislative Committee on Tax Matters negotiated to establish a ceiling of a 55% interest rate on loans of less than ¢675,000 colones, and 39.4% for loan amounts over.
Those rates are based on a technical calculation that is currently still part of the discussions between legislators of the different political parties and with the involvement of the General Superintendent of Financial Institutions (Sugef), Bernardo Alfaro
The actual ceiling on for rates, before they are considered to be usury depends on the prevailing rates of the Central Bank (Banco Central) and the salary of a class 1 employee of the judiciary that is, currently ¢675,300 colones.
To calculate the ceiling rate on loans, the proposal is multiplying the average active rate calculated by the Central Bank which, the previous week, was 12.75%, according to Welmer Ramos, legislator for the Partido Acción Ciudadana (PAC).
Based on the current salary and Central Bank rate, the ceiling rate is 55%, defined as a “microcredit cap”.
For loans in amounts higher than ¢675,000 colones, the calculation changes, the multiply rate is 3.1, thus the maximum interest would be 39.4%, the “conventional credit cap”.
Higher interests would be considered a crime.
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Simple enough. However, the Sugef head explained that, if the ceiling for ordinary loans is less than 40%, this would exclude vulnerable sectors of the national financial system; although, he acknowledged, that a limit of 38% excludes less than a ceiling, for example, 35%.
“What they are looking for is which multiplier is the one that makes the average active rate close to that maximum level (45%) that our methodology has already recommended and, as the average active rate of the system is quite stable and reflects, in In effect, what are the credit levels established by all entities, we see that it can be a very good reference,” explained the superintendent.
The politicians argue that setting the conventional cap rate at 39% would protect some 127,000 families due to their socio-economic conditions, that is, they would no longer be excluded from the national financial system.
Regardless of which rate cap is adopted, legislators agree to use the average active rate as a reference so that the cap can move according to market conditions.
In the proposal, the conventional rate would be reviewed every year to avoid legal uncertainty.