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Mexico

In Mexico, there are two main authorized forms of deposit-taking institutions in the popular savings and credit sector – Popular Savings and Credit Cooperatives (SCAPs) and Popular Financial Societies (SOFIPOs). There is a delegated system of prudential supervision for these institutions that is under transition, whereby federations will continue to exercise auxiliary supervision over their member SOFIPOs, while a new Protection Fund containing a central oversight authority (the CSA) will be created for SCAPs. In addition to SCAPs and SOFIPOs, there are a handful of niche entities including cajas populares, which either operate under a conditional extension with government permission or operate informally, and credit unions. Another public institution, the National Bank for Savings and Financial Services (Bansefi), provides technical assistance to popular savings and credit institutions and low-level savings accounts to individual clients. Ultimate oversight for almost all financial institutions falls to the National Banking and Securities Commission (CNBV), an independent agency housed within the Ministry of Finance. Today, Mexico is experiencing an intensive process of regulatory transformation, with a 2009 law setting up a distinct legal framework for the SCAPs.

The framework for credit-only institutions is not tailored to microfinance, but is instead regulated by the Law on Credit Institutions and the General Law on Auxiliary Credit Organizations and Activities. The most common form for credit-only organizations adapted for use by MFIs is the unregulated Financial Company with Multiple Corporate Purposes (SOFOMES). Unregulated SOFOMES do not require prior authorization from any government entity, and are subject only to limited oversight by the National Commission for the Protection and Defense of Financial Services Consumers (CONDUSEF). Regulated SOFOMES are subject to CNBV supervision. Finally, a 2009 regulatory provision interpreting the Law on Credit Institutions established a new institution, the niche bank. Niche banks are considered commercial banks, but have a narrower scope of permitted activities in exchange for significantly lower initial capital requirements. The regulation is intended to encourage SOFOMES, credit unions, and other non-banks to expand their services and markets and further formalize their operations.

mix-market

Regulators

Microfinance & Banking

Consumer Protection

The regulatory and supervisory framework for financial consumer protection in Mexico is extensive and fairly complicated, due in part to the fact that there are many types of banking institutions, each belonging roughly to the public, private commercial, and popular savings and credit sectors. Several laws and government organs regulate financial institutions and the lending of money. Of these government organs, the most important is the National Commission for the Protection and Defense of Financial Services Consumers (CONDUSEF), which was created by a law of the same name in 2009.

CONDUSEF carries out its consumer protection mission in a number of ways. First, it keeps a registry of financial services users and of financial institutions offering loans. It also acts as an arbitrator between users and financial institutions, and in some circumstances provides legal assistance to users. CONDUSEF can recommend the adoption of certain laws and ways of implementing those laws to the federal executive branch. Finally, CONDUSEF provides users with accurate information relating to the services offered by financial institutions after analyzing information financial institutions distributes to users. When necessary, CONDUSEF will revise the standards for information, as well as revise contracts it feels are unfair. Other regulators include the Bank of Mexico and the National Banking and Securities Commission (CNBV).

Branchless Banking