Reform Is The Law Against The Usury.

Original Language Title: Refórmase la Ley Contra la Usura.

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Read the untranslated law here: http://www.asamblea.gob.sv/eparlamento/indice-legislativo/buscador-de-documentos-legislativos/reformase-la-ley-contra-la-usura/archivo_documento_legislativo



1. Decree No. 350, the Legislative Assembly of the Republic of EL SALVADOR: I.-that according to the provisions of articles 101 and 102 of the Constitution, the economic order should respond essentially at the beginning of social justice, that they tend to make all the inhabitants of the country, an existence worthy of human beings; and the State also has responsibility to ensure economic freedom in what is not opposed to social interest.
II. that by means of Decree legislative number 221, date of January 23, 2013, published in the official journal N ° 16, volume N ° 398, dated 24 of that same month and year, issued the law against usury, which is intended to prohibit, prevent and punish the usurious practices in order to protect the rights of ownership and possession of the people and to avoid the legal consequences Economic and property derived from all the usurious practices.
III.-that the entry into force of this law, has allowed, in general, a gradual decrease of the legal maximum rates. However, having conducted a comprehensive analysis, has concluded that, in order to strengthen the aforementioned law, is needed to issue relevant reforms, to grant to the Central Reserve Bank, Superintendence of the financial system and the Consumer Ombudsman, sufficient powers so that they develop better their powers, in order to prevent abuses and excesses in the market.
Therefore, in use of its powers constitutional and to initiative of them members: Misael Mejia Mejia and Francisco Jose Zablah Safie; as well as, them members of the legislature 2012-2015: José Álvaro Cornejo Mena, Antonio Echeverria Veliz and Douglas Leonardo Mejia Aviles.
DECREES the following: reforms to the law against the USURY article 1.-reforming the second paragraph, and merge three paragraphs at the end of article 5, in the following way: "for the purposes of this Act are considered microcredit multicast, that which is granted to natural or legal persons, through the application of appropriate technologies for the granting and administration of the credit process (, which should contain as minimum: to) procedures and forms for the rising of the information financial through your personal, in the business or domicile of the or them seekers, that allow the analysis of the capacity of payment; as well as, that 2 information that give indications of the morality of the or the applicant; "(y b) procedures and policies of raised of the loan in the business or domicile of the debtor." " The refinancing and restructuring of loans, applies them to the permitted legal maximum effective rate corresponding to the segment to which belonged the original credit.
Operations of purchase and sale, with restatement Pact, awarded jointly or separately, on movable or immovable property and loans with collateral or other operations, payable at maturity, at times less than a year, carried out by pawn houses, mutual societies or similar, may not exceed the maximum effective rate for legal consumption of segment of credit for natural persons without discount of up to 12 wage minimum urban of the Sector Commerce and services.
Legal persons will be required to have internal policies, containing specific guidelines for the segmentation of its portfolio of loans, according to the provisions of this law."
Article 2.-Reformanse second, third, fourth and sixth paragraphs of article 6, in the following way: "for these purposes, the Central Reserve Bank will take into account the effective interest rates in credit operations contracted in the months from December to may, and from June to November. Effective interest rates should be informed by the following entities in the financial market: banks, cooperative banks, corporations and cooperative associations of credit unions, associations and non-profit foundations that give credits. For purposes of the calculation of the effective interest rate simple average, for segments of micro-targeting micro credits established in the present law, the information that will be provided by associations and foundations without profit, savings and credit, societies and cooperative associations of savings and credit, credit and banks of workers should be considered additionally.
Natural or legal persons not included in the foregoing paragraph, such as trading houses, traders of goods or services and in general to any subject or entity that pay money or grant funding, including the so-called houses of commitment, mutual societies or similar, must submit to the Central Bank of reserve the information of your credit activity so that this is taken into account to establish the effective interest rates that will serve as a reference to determine interest rates
maxims, and used for the calculation of such rates of interest, the methodology which is designated in the regulations issued by the Central Reserve Bank.
Entities shall send to the Central Bank of reserve effective interest rates and the amounts of credit operations, in the months from December to may and June to November in the first five working days of the months of June and December, respectively. "" The Bank Central of book will report to who corresponds, of them breaches in this matter. "" The Central Reserve Bank will issue rules to determine the methodology, databases, operations and structure information to include, the conditions for submitting the information;

3 as well as the necessary guidelines for the implementation of this law and the mechanisms by which the unregulated natural and legal persons must register in the Central Reserve Bank for purposes incorporate the information of your credit activity according to issued under this law. It empowers the Central Reserve Bank so that you can exclude from the calculation, the information that does not comply with the provisions of this law, regulations and manuals that this issue."
Article 3.-Reforming article 8 follows: ' article 8.-Central Reserve Bank should be unveiled in the first ten working days of the months of June and December, the legal maximum interest rates, differentiated by type of credit and contracted amounts, according to the segmentation of article 5 of this law, by means of its Web site and by posting in two newspapers with national circulation. "
Article 4.-Reformed the paragraph and article 9, the following way: "validity of maximum interest rates legal article 9.-the maximum legal interest rates, once published, shall remain in force from 1 January to 30 June;" and since July one thirty and one in December."
Article 5.-Reform paragraph first and add a final paragraph to article 12, in the following manner: "in the case of entities supervised by the Superintendence of the financial system, breaches will be punished, according to the law on Supervision and regulation of the financial system, with the procedures indicated. Other subjects bound to the enforcement of this law, they will be punished by the Consumer Ombudsman, by means of the procedure laid down in the law on protection to the consumer, whereas in this case that the failure to register in the Central Reserve Bank and the usury constitute very serious offences. Empower the Central Reserve Bank to inform the Consumer Ombudsman, when it becomes aware of any of these infractions, to the effect that the respective penalties administrative procedure. Consumer Ombudsman can verify ex officio the fulfillment of the law and its regulations, by non-supervised creditors, and may require the support of other entities such as the Superintendency of trade commitments and the Salvadoran Institute for cooperative development."" In addition, the Superintendence of the financial system and the Consumer Ombudsman, will sanctioned creditors monitored or not monitored, according to appropriate them, by a fine of up to fifty wage minimum urban of the Sector Commerce and services, when not they submit the information of your credit activity or is inaccurate according to technical standards and manuals issued by the Central Bank of reserve."

4 Article 6.-available temporary the calculation of the first half of two thousand sixteen legal maximum rates, will take place in the first five working days of July of the current year, and publication will take place within ten days of the same month, taking into account the information submitted by creditors, for the months from January to may of two thousand sixteen. These rates will be effective from August one thirty and one of December in the year one two thousand and sixteen.
The Central Reserve Bank will have a period of sixty days from the entry into force of the present reforms, to adapt the technical standards in the relevant.
Article 7.-This Decree shall enter into force eight days after its publication in the official journal.
GIVEN in the blue room of the Legislative Palace: San Salvador, at twenty-one days of the month of April of the year two thousand and sixteen.
LORRAINE GUADALUPE PENA MENDOZA, PRESIDENT.

GUILLERMO ANTONIO GALLEGOS NAVARRETE, ANA VILMA ALBANEZ DE ESCOBAR, SENIOR VICE PRESIDENT. SECOND VICE PRESIDENT.
JOSE SERAFIN RODRIGUEZ ORANTES, NORMAN NOEL QUIJANO GONZÁLEZ, THIRD VICE-PRESIDENT. FOURTH VICE PRESIDENT.
SANTIAGO FLORES ALFARO, FIFTH VICE PRESIDENT.
WILLIAM FRANCISCO MATA BENNETT, DAVID ERNESTO REYES MOLINA, FIRST SECRETARY. SECOND SECRETARY.
MARIO ALBERTO TENORIO GUERRERO, REYNALDO ANTONIO LOPEZ CARDOZA, THIRD SECRETARY. FOURTH SECRETARY.
JACKELINE NOEMI RIVERA AVALOS, JORGE ALBERTO ESCOBAR BERNAL, FIFTH SECRETARY. SIXTH SECRETARY.

5 ABILIO ORESTES RODRIGUEZ MENJIVAR, JOSÉ FRANCISCO MERINO LÓPEZ, SEVENTH SECRETARY. EIGHTH SECRETARY.
In compliance to it provisions in the article 97, subsection third of the regulation inside of this organ of State, is makes record that the present Decree was returned with observations by the President of the Republic, the day 12 of mayo of 2016; specifically, the second paragraph of article 2; observations that were considered by this Assembly legislative, in session plenary of date 19 of mayo of the year in course, according to it established in the subsection third of the article 137 of the Constitution, solving accept them by estimate that the same are related.
WILLIAM FRANCISCO MATA BENNETT, SECRETARY EXECUTIVE.
House presidential: San Salvador, to a day of the month of June of the year two thousand sixteen.
PUBLISHED, Salvador Sanchez Ceren, President of the Republic.
Tharsis Salomon Lopez Guzman, Minister of economy.
D. O. N ° 102 volume N ° 411 date: June 2, 2016 JQ/adar 24-06-2016 legislative index