Below is a translation of the Pact for Mexico website’s detailed overview of the recently-submitted Financial Reform package.
In order to increase the availability of credit and make credit more affordable, a Financial Reform is proposed with respect to commitments 62 and 63 of the Pact for Mexico.
The Financial Reform establishes the basis for inclusive development, where there is more lending at affordable rates, while maintaining healthy and prudent practices and improving the efficiency of the financial system.
1. A new mandate for the Development Bank to support the growth of the financial sector
- Ensure that the Development Bank boosts the financial system for the benefit of Mexican families.
- Give greater freedom to the Development Bank to operate, maximizing the benefits of giving loans and encouraging private lenders.
- Create programs and financial products for the development of priority areas of national development.
2. Encourage competition in the financial system in order to lower interest rates.
- Strenthen CONDUSEF [note: National Commission for the Protection of Users of Financial Services] so that its decisions related to the defense of users of financial services are obligatory for credit institutions.
- Make it easier for individuals to switch banks and prohibit tying arrangements or conditions, which will encourage competition in the sector.
- In order to allow borrowers to use their positive credit histories to access more financing options, consider the possibility of creating a universal credit bureau.
- The reform will facilitate the transfer of credit guarantees by increasing competition among credit institutions.
3. Generate additional incentives for banks to lend more.
- In order to reduce the risk of banking, simplify the procedures/standards for granting and enforcement of loan guarantees.
- Create a Bureau of Financial Institutions, in order for borrowers to find relevant information on financial entities.
4. Strengthen the banking system so that it will enjoy sustained growth.
- Periodically evaluate banks to promote greater lending.
- Improve the coordination among financial authorities by strengthening the Council on Financial System Stability.
- Elevate to the status of law current rules on capital formation and quality (Basel III).
- Advance the specialization of federal courts on financial issues.
- Facilitate the bankruptcy process, while protecting the resources of depositors.