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Financial consumer protection regulation in Honduras

The National Commission for Banks and Insurance Companies (Comisión Nacional de Bancos y Seguros, CNBS) is legally in charge of regulating and supervising banks, insurance companies and securities operations in Honduras.

On September 2011, as part of a trend directed towards the protection of financial consumers, the CNBS issued its latest version of the Financial Consumer Protection Regulation, Regulation No 1631/12-09-2011 (FCPR). The CNBS also issued rules that complement the provisions of the FCPR (Regulation No 1632/12-09-2011). This latest version of the FCPR differs from its predecessors by expanding the provisions that set forth new obligations and conditions for supervised institutions, containing detailed descriptions on how to meet these requirements.

Transparency is one of the key principles of the FCPR, hence the inclusion of disclosure requirements that provide for constant free-of-charge information and documentation to be handed to the consumer, before, during and after entering into contractual relationships. These documents must be clear, precise and true. There are also customer service provisions requiring supervised institutions to promptly attend consumer requests.

The FCPR also establishes rules regarding the documentation provided to consumers. For example, advertising documents are legally binding and must coincide with the agreement's provisions. Also, upon request, consumers can receive detailed itemised lists that describe the calculations used to charge fees. Other requirements include the obligation that supervised institutions submit monthly reports regarding the amount of claims received and the claims solved, filed by consumers, also known under the regulation as financial users.

Last but not least, there is a mandate that all supervised institutions must have a consumer protection manager, system and department. These are just some of the many requirements that become part of the regulatory compliance agenda.

Due to this heavy burden that has been placed upon supervised institutions, not only with regards to the amount of disclosure but also to its quality, there has been an increase in the demand for legal services in order to help supervised institutions comply with the FCPR. It seems that the CNBS has caught on to the trend of issuing consumer protection laws that go beyond simple disclosure. Only time will tell if consumers will enjoy the benefits of the overwhelming amount of information, or if they will just ignore this avalanche of data and documentation. Either way, consumers in Honduras are now equipped with new legal tools that will help them when dealing with their corporate counterparts.

José Ramón Paz Morales

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