Earlier this week, Banco de México published new limits on bank
fees and commissions that are designed to make the Mexican
financial system more efficient and user-friendly. The rules
went into effect on Tuesday. According to press reports, the
new limits include:
• Branch and ATM
Transactions. Banks are no longer allowed to charge
their account holders any fee on deposits or loan payments made at
one of the bank's branches or ATMs.
• Insufficient Funds
Fees. When an account holder overdraws his or her
account, the bank may only charge the lesser of the amount of the
overdraft or a set fee approved by the central bank.
Fees. Banks are no longer allowed to charge a fee
for late loan repayments if they are also charging interest on the
past due amounts.
Fees. If a credit card carries an annual fee, banks
are no longer allowed to charge a fee for non-use of the card.
The reports also indicate that bank ATMs will also be required
to show a clear listing of the fees to be charged for each
transaction and allow a customer to cancel the transaction in order
to avoid the fees.
Comment: Organizations ranging
from the U.N. Economic Commission for Latin America to Mexico's
Condusef consumer protection agency have complained that the fees
charged by Mexican banks are unusually high, making it difficult
for the financial system to efficiently accumulate deposits and
channel capital to worthy borrowers. Some banks reportedly
even charge a fee to clients who mistakenly enter the wrong PIN
number at an ATM. The central bank's new regulations may help
address those problems in a modest way. However, the new
rules do nothing to address the relative concentration in the
banking market, where less than half a dozen large, foreign
dominated banks account for the bulk of deposits. They also
are unlikely to help with the current credit crunch in Mexico,
which is a reflection of the global financial crisis and the recent
Patrick Fearon, CFA
Vice President, Fund Management