From American Banker April 18, 2014 TBTF Feedback: "Too big to fail" is fading in...
The monetary and financial system of the Dominican Republic is regulated mainly by the Constitution, Monetary and Financial Law 183-02 and its complementary regulations. The microfinance sector is largely underdeveloped and lacks a comprehensive regulatory framework. Banks and co-operatives service over 70% of the market and unregulated NGOs and foundations attend to the remainder. Non-regulated MFIs have experienced high growth rates in the last few years. This segment is reaching a tipping point where some entities are large, offer a variety of products and are competing with regulated MFIs for clients.
Banking supervision has improved in since [year], but transparency and governance practices are still well below international standards. The Central Bank of Dominican Republic regulates all financial institutions, although only banks may accept deposits, (though there are others entities in charge like the superintendencies of banks and monetary board). There are no meaningful interest rate restrictions nor is there control in transparency, pricing and client protection standards. Credit history information is very good. However, non-regulated MFIs are not required to report to the credit bureaus.
Since 2005, Proconsumidor, a government agency, has been in charge of protecting clients and is beginning to examine lending practices in the microfinance sector, focusing on banks. In March 2012, PROMIPYME, a government first tier lender, was accused of nepotism and corruption when making loans.
 Each of this entities has a specific role in the Financial System, superintendency of banks role is to enforce the law over the banks and monetary board’s role is mainly regulatory and guidance.
- Central Bank of Dominican Republic
- Monetary Board
- Superintendency of Banks
- Superintendency of Securities
Microfinance & Banking
- Law Monetary and Financial (No. 183-02) ( 2002) (Spanish)
- Constitution of Dominican Republic ( 2010) (Spanish)
- Law for the Development of the Mortgage Market and the Creation of Trust (No. 189-11) ( 2011) (Spanish)
- Law on Foreign Investment (No. 16-95) ( 1995) (Spanish)
- Law on Money Laundering (No. 72-02) ( 2002) (Spanish)
- Securities Market Law (No.19-00) ( 2000) (Spanish)
In 2005, Dominican congress enacted General Consumer protection law (358-05). This law created an entity in charge of protecting consumer from abuses, called Proconsumidor. Even more, this entity has preempted Superintendence of banks jurisdiction regarding banks and financial entities and helped vehemently consumer to claim for their rights. Actually there is a regulatory arbitrage between these two entities and courts are key in this regard.