On December 12, the House of Representatives Finance Committee approved the bill that empowers the Superintendence of Finance of Colombia (SFC) to certify credit card interest rates, introduced by Senator David Barguil (Partido Conservador – ally to the ruling party). Barguil’s bill will now be discussed on the floor of the House of Representatives.

The bill empowers SFC to certify bank interest rates for all existing credit modalities, including credit card interest rates. The usury rate is thus expected to be reduced from the current average of 29.88% to 27.94% for consumer credits and 26.68% for credit cards, respectively, based on the certificates issued by SFC.

To certify these rates, SFC will take into account risk profiles – related to greater exposure to economic shocks, a lower credit history, or the absence of traditional guarantees to support indebtedness – amounts, terms, and different conditions to define the interest rate that each person can be charged for his or her credit card. At present, financial institutions can set rates as they wish.   

After his bill was approved, Barguil stated that “what we want with this initiative is that you can not impose the same interest rate on everyone, regardless of whether the person is badly-paid or well-paid, or of the amount they have on their credit card. This, in the end, is going to drive those rates down in the market”.