The Congress Of The Republic Of Guatemala Approves The Credit Cards Law

Juan Carlos Batres - Luis Pedro del Valle,  February 19, 2024

Arias Law - Last Thursday, February 15, 2024, the Congress of the Republic of Guatemala approved the Credit Cards Law. This new law regulates transactions between credit card issuers, affiliates, and cardholders.

The Credit Cards Law sets out the specific terms and conditions that must be set out in all credit card agreements between issuers and cardholders. It also regulates the payment agreements that may be entered into between issuers and cardholders who owe amounts by virtue of the use of credit cards. Although no maximum or fixed interest rates were set to be charged by issuers, the Credit Cards Law establishes the way in which interest rates must be agreed, as well as the way in which they can be modified.

On the other hand, the Credit Cards Law establishes a series of obligations and prohibitions to which credit card issuers must comply with. Among these is the obligation to provide certain information determined by the Superintendency of Banks related to the risk of such operations. In accordance with the law, credit card issuers will have access to such risk information for the purposes of credit analysis of cardholders. In this regard, credit card issuers will be prohibited from disposing of funds from other accounts of the cardholder for the payment of debts that the cardholder has acquired under a credit card agreement. Another important prohibition of issuers is that they must refrain from harassment and bullying for the collection of debts acquired by cardholders.

The Credit Card Law also introduces a new sanctioning regime, which involves the reform and insertion of some articles of the Penal Code, such as the crime of credit card cloning, the crime of illegal credit card use, among others. Likewise, the law regulates procedures for the intervention of the Directorate of Consumer and User Care and Assistance (DIACO) aimed at compliance with the new law.

The Credit Cards Law will enter into force 6 months after its publication in the Official Gazette, with the exception of certain articles that will enter into force on the same day as its publication in the Official Gazette. For the time being, the Credit Cards Law must be approved and ratified by the President of the Republic, prior to its publication.