Bill to convert dollar loans to colones would waive fees

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QCOSTARICA – Given the increase in the exchange rate, many are faced with the dilemma of having a loan in dollars, but still earning in colones

The proposal on debt settlement will be presented by the 19 lawmakers of the PLN, the party with the largest caucus. Photo: (Legislative Assembly)

For this, the 19 legislators of the Partido Liberación Nacional (PLN) – the party most represented in the Legislative Assembly – are preparing a bill to facilitate the conversion of loans in dollars into colones, without formalization costs.

Currently, the dollar is above 680¢ and in the next few days could reach and even exceed the 700¢ mark. According to estimates by the Verdiblanca group, some 760,000 families have dollarized debts. Similarly, the productive sector with dollarized credit financing is also affected.

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Kattia Rivera, leader of the PLN faction, said the bill provides that banks do not charge commissions if a customer wishes to change the currency of their loan.

However, the initiative would not address the issue of interest rates, which are generally higher in colons than in dollars.

PLN lawmaker and President of the Treasury Affairs Commission, Paulina Ramírez, added that the initiative would exempt debtors from the cost of formalizing loans, either by converting the currency or by transferring the loan to another financial institution.

Ramírez considers that it is possible to legislate so that banks offer better loan conditions to their customers.

The PLN proposal was launched during the last election campaign, prepared by the economist Gerardo Corrales, for the former presidential candidate, José María Figueres.

However, the Asociación Bancaria Costarricense (ABC) – Banking Association of Costa Rica, warned in advance that the problem is not so simple, because there are still costs when a customs changes currency on a loan .

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“When financial entities grant a loan in dollars, they incur a series of costs that are reflected in the commission and, in case of modification of the terms and conditions of the initial loan, to exchange currencies, new costs are generated that must be covered,” ABC said, responding to a survey by La Nacion.

On Wednesday, the PLN told Presidential Minister Natalia Díaz that the plan would be a priority for the party with the largest caucus.

“Due to the international crisis, the cost of the dollar will continue to rise and the number of people and businesses that have their debts in dollars is very high. We talk about how it could provide palliative relief for everyone,” Rivera said.

For his part, Corrales assures that banks could create debt conversion programs, in addition to eliminating penalties or fines for early debt payments.

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Corrales added that the plan was that under a PLN government, within a period of 12 months, banks would reduce commissions on formalization fees or transfer fees. Of course, the plan only involved state banks, but private banks would follow so as not to lose customers.

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