Law 9859, known to the public as “Law against Usury“, has reformed several articles of the Law for the Promotion of Competition and Effective Consumer Defense in benefit of potential debtors. As the main highlights, we can mention that this reform establishes the method which the Central Bank will use to establish, in the months of July and January, the maximum interest rate; in addition to establishing a series of obligations to the creditor lender, which we list below:

a) It is prohibited to divide the amount of regular credits, in amounts equal to or less than one point five (1.5) times the base salary of a “clerk 1” of the Judicial Branch (which for this year is ¢462,200.00), in order to charge a higher rate than the maximum rate established for a regular credit.
b) It is prohibited to include the interest rate, any costs, expenses, fines or commissions that exceed the limits established by law.
c) They must inform their debtors about the rates published on the Central Bank and MEIC websites.
d) They must request from the potential debtor an authorization to have access to the Credit Information Center of the SUGEF (Office of the Superintendent of Financial Institutions), in order to access the total of current credit obligations and to avoid over-indebtedness.
e) Prior to signing the contract, they must provide written, clear, updated and sufficient information specifying the mechanism to be used to determine the interest rate, the average balances subject to interest, the formula to calculate them and the scenarios under which such interest should not be paid.
f) Explicitly include, in the account statements, the breakdown of the items that the user must pay. The balance has to include under separate titles the: principal, financial interest, default interest, charges and commissions, corresponding to the specific statement period.
g) Show the interest rate that has been charged.
h) Inform, in the immediately subsequent account statement, any modifications to the original contract or the addendums or exhibits included, in order for the debtor to determine whether they would wish to continue with the contractual relationship or not. If the debtor decides to end the contractual relationship, the creditor may only collect the outstanding balance at the interest rate that was established prior to the proposed modification.

In addition to the obligations for the creditor that the law incorporates, said law seeks to support and greatly benefit consumers, by providing certainty about the rates that can be charged, the rates are more fair and the mainly this rates are applied to all entities that provide credit; in other words, it does not matter that the creditor is not a bank; the law includes all businesses that provide credit, whether they are appliance stores, stores, banks or lenders.

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