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MEXICO ANNOUNCES NEW RULES PROHIBITING BANKS FROM CHARGING COMMISSIONS FOR CERTAIN SERVICES.

Article Excerpt
After coddling the country's commercial banking sector for years, the Banco de Mexico (central bank) has announced steps that will make the financial institutions more responsive to the needs of consumers. On July 21, the central bank, also known as Banxico, ordered the banks, most of which are owned by foreign institutions, to stop charging commissions on nine separate services. The changes become effective Aug. 21. The measure stopped short of placing a cap on interest rates, which have long been the subject of complaints against the banking sector. Curiously, the banking sector accepted the central bank's decision with little or no protest, even acknowledging that the move could lead to greater competition.

The Mexican government, including the central bank, had been under pressure for many years to take action against the excessive and many times unfair fees charged by commercial banks. One of the most common complaints was that foreign-owned banks had been charging higher fees in Mexico than to consumers in their home countries.

In 2007, the Senate considered several initiatives to give Banxico greater authority regarding interest rates and commissions (see SourceMex, 2007-03-21). The Senate...

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