Popular Savings and Credit Law of 2001

Mexico

(amended through 2009)

The Popular Savings and Credit Law (Ley de Ahorro y Crédito Popular) (LACP) is the foundational microfinance law of Mexico. The LACP mandates that all deposit-taking institutions over a minimum asset level register as one of two formal entities – Popular Savings and Credit Societies (SCAPs) or Popular Financial Societies (SOFIPOs). The main objective of the LACP is to protect deposits and promote popular savings and credit development in Mexico, particularly through:

  • Granting the National Banking and Securities Commission (CNBV) powers to authorize, supervise, regulate, and sanction popular savings and credit entities;
  • Delegating “auxiliary supervision” to federations of SOFIPOs and to a confederation, COFIREM, with the CNBV then having inspection and oversight power over both federations and individual SOFIPOs and SCAPs as well as other less common institutions; and
  • Establishing a deposit insurance scheme for entities under this law, to be administered by the federations, and backed by a national “Protection Fund.”

The law is organized as follows:

  • Title I General Provisions, Objectives and Definitions, provisions of which address the following relevant issues, among others:
    • Objectives of law, which are to regulate, promote and facilitate the obtaining of funds or monetary resources and their placement through loans, credit or other operations by SOFIPOs, Community Financial Societies (SFCs) and Rural Financial Integration Organizations (OIFRs), as well as to promote the activities of these entities and to protect the interest of their clients (Art. 1);
  • Title II Organization and Operations of SOFIPOs, SFCs, and OIFRs, provisions of which address the following relevant issues, among others:
    • CNBV’s mandate to issue regulations regarding SOFIPO operational requirements and SOFIPO levels I-IV according to minimum asset levels (Art. 32);
    • Permitted activities (Art. 36) and minimum capital requirements (Arts 41-45) for SOFIPOs
    • SFCs and OIFRs as new entities created by the 2009 amendment to the law (Art. 46);
  • Title III Organization and Regulation of Federations, Corrective Measures, and the Protection Fund, provisions of which address the following relevant issues, among others:
    • Delegation of supervision to federations of SOFIPOs (Art. 47) and federations’ auxiliary supervision powers over SOFIPOs (Art. 62);
    • Self-regulating organizations of SOFIPOs;
  • Title IV Prudential Regulations and Accounting Standards;
  • Title V Inspection and Supervision Powers of the Authorities; and
  • Title VI Sanctions, Crimes, and Notifications.

In addition, the law includes provisions regarding anti-money laundering. Other anti-money laundering provisions can be found in the Law on Credit Institutions, the General Law on Auxiliary Credit Organizations and Activities, and the Law Regulating the Activities of Cooperative Savings and Loan Societies, among others.

Related general provisions issued by Mexico’s National Banking and Securities Commission can be found under “Related Laws/Regulations.”