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Covid-19

Special measures issued by the national banking and securities commission (“cnbv” for its acronyms in spanish), applicable to credit institutions, against the contingency arising from covid-19

WHAT IS THE THE CNBVAND WHICH ARE ITS AUTHORITY?

According to the Law of the National Banking and Securities Commission (Ley de la Comisión Nacional Bancaria y de Valores), the CNBV is a decentralized organization of the Secretary of Finance and Public Credit (SHCP for its acronyms in Spanish), that supervises and regulates the entities integrating the Mexican financial institutions – including natural persons and legal entities who carry out activities related to the financial system –, to procure their stability and perfect functioning, as well as to keep and promote a safe and well-balanced development of the financial system, protecting the interest of the public.

DUE TO THE CONTINGENCY CAUSED BY THE COVID-19, THE CNBV ISSUED SPECIAL ACCOUNTING MEASURES APPLICABLE TO CREDIT INSTITUTIONS IN MEXICO.

On march 25, 2020, through the publication of the statement number 029, the CNBV informed the special accounting measures applicable to credit institutions, derived from the contingency caused by the Coronavirus COVID-19.

These measures were issued on a temporary basis to mitigate the economic effects derived from the contingency, regarding the consumption, housing and commercial credits for the clients whose payment source is affected by the contingency.

Said measures were given in response to the request of the Association of Banks of Mexico (ABM, for its acronyms in Spanish), in order to make the banks that are members of the ABM to implement programs towards the affected borrowers.

In that document, the ABM, which gathers 51 commercial banks that operates in Mexico, explained the negative impact that the measures to prevent the spread of COVID-19 is generating in various activities of the economy such as consumption, services, tourism, restaurants, disruptions in supply chains, among others, which would result in the imminent difficulties of the persons and companies to punctually fulfill their credit commitments.

WHAT ARE THE SPECIAL MEASURES APPLICABLE TO CREDIT INSTITUTIONS?

In general terms, the support will consist in the partial or total deferral of capital and/or interest payments for a period up to 4 months, with the possibility of extending such deferral for an additional 2 months-period, regarding the entire outstanding amount, including but not limited to accrued interest, commissions or penalities for noncompliance.

The outstanding balance might be suspended or frozen without interests charge. The foregoing will be applicable as long as the credit is classified effective as of February 28, 2020.


IN WHAT KIND OF CREDITS DO THESE MEASURES WILL APPLY?

In particular, this measures will apply to the following credits:

  • Mortgage-secured loan for housing.

 

  • Revolving and non-revolving credits of natural persons, such as:
  1.  Car credit.
  2. Personal credit.
  3. Payroll loans. Credit cards; and
  4. Microcredit.
  • Commercial credits granted to legal entities or natural persons with business activity in their different modalities, including agriculture credits.

Derived from the contingency, this measures will benefit the well-being of the debtors, since it will allow them to defer their payments with respect to consumption, housing and commercial loans.

HOW TO ACCESS TO THE PARTIAL OR TOTAL DEFERRAL OF CAPITAL AND / OR INTEREST PAYMENTS?

In order to access to the benefits of the special accounting measures issued by the CNBV, it is necessary to contact the bank where you have contracted the financial service that you intend to request the partial or total deferral of capital and/or interest payments, to ask about the requirements to be met to access to said benefit.

The aforementioned is because, although the measures indicates that the deferral of payments could be up to a 4 months-period, with the possibility of extending it to an additional 2 months-period, with respect to the entire outstanding amount, including incidental amounts, each bank should set the terms and requirements to access to said deferral.

For the purpose of the above, it is necessary to point out that the first requirement to be met in any bank is that the credit is classified as valid as of February 28, 2020.

Therefore, it is recommended to ask to the bank where you have contracted your financial service the requirements for the partial or total deferral of capital and/or interests payments.