The positive of the reform to the General Law of Titles and Operations of Credit (LGTOC), is that it is a reform agreed with the regulated financial system, in which institutions participate that are an express part of the Mexican financial system and that are regulated by both the CNBV and the CONDUSEF in financial matters.
Regulation has consolidated the non-bank financial sector. From 2015 to date the SOFOM sector has been reduced for good, from 5,000 to 1,800 SOFOMes of which ASOFOM associates more than 200 SOFOMes nationwide.
In order that ASOFOM associates comply 100% with the regulations and best practices to institutionalize, the Sofom High-Quality Certification -SAC- ASOFOM: government-corporate, risk management, manuals, cybersecurity systems, financial indicators, regulatory compliance, among others.
ASOFOM Associates Cover All Product Types of credit mainly SME credit and productive credit; nevertheless, ASOFOM will always be in favor of defending the interests of the SOFOM sector and the regulations in favor of financial inclusion and the economy of Mexican families.
Mexico, CDMX, May 14, 2021.- The Association of Multiple Purpose Financial Companies in Mexico, A.C., ASOFOM, pronounces in this statement in favor of transparency and best practices in the so-called Delegated Collection included in the reform of the General Law of Credit Securities and Operations (LGTOC).
According to the National Board of Directors of ASOFOM, it is a reform agreed with all the actors of the regulated financial system, in which the institutions that are expressly part of the Mexican financial system and that are regulated by both the CNBV and the CONDUSEF in financial matters.
Enrique Presburger Cherem, National Vice President of the Association, refers for the purposes of this position that this reform to the regulation is proven in other countries such as Colombia and Brazil, where it is one of the best practices in the granting of payroll loans since it avoids the worker’s over-indebtedness, forces the employer as jointly responsible for the payment to the grantor of the loan and requires that the grantor is a regulated financial institution with transparency in its conditions in compliance with the authorities.
“At ASOFOM we have seen that regulation has consolidated the non-banking financial sector. From 2015 to date, only the SOFOM sector has been reduced for the better, from 5,000 to 1,800 SOFOMs, of which ASOFOM associates more than 200 ”.
ASOFOM has a firm commitment to inclusion and financial education through quality services regardless of the object or beneficiary of the granting of the credit and therefore since its constitution -in 2016- the Association has worked so that ASOFOM members comply 100% with the regulations establishing consultancy mechanisms, link with authorities and training of human capital in matters such as compliance, funding, risk prevention, and cybersecurity among other issues that lead to the institutionalization of the figure of SOFOM.
The General Director of ASOFOM, Jorge Avante, points out that the Sofom Alta Calidad -SAC-, ASOFOM certification was designed in 2015 in order to diagnose the level of institutionalization of SOFOMes and cover the gaps necessary to be institutional funding candidates including compliance with the authorities and adherence to the best practices they issue.
The SAC has more than 200 issues that it evaluates in the certification, including compliance with the CNBV and CONDUSEF regulations, the objective is to know the level of operational, credit, governance risks, and of course the risk of regulatory non-compliance that imply fines. by the authorities (CNBV, Condusef, INAI).
Within the evaluation of the ASOFOM SAC certification, the Regulation Committee was involved, in which Certified Compliance Officers and firms specialized in PLD / FT participate, the purpose of which is that ASOFOM associates comply 100% with the regulations. The questionnaire includes questions related to topics of:
For those of us who represent ASOFOM, the law reform that applies to Payroll Loans is an alignment for a transparent process that eliminates informality in the granting of payroll loans. It is very important to see that the interests of the worker are protected because before, any company could make agreements for payroll loans whether or not it is part of the financial system with contracts that are not reviewed by any authority, and it is very good that those who lend the money to workers have to be just companies regulated and under the observation of the law.
Financial intermediaries will receive in a transparent and immediate way the payments that are made by contract, the employer will have the obligation to withhold the payment but only to redirect it immediately to the financial institution, and this results in the worker not paying late interest, not having a misuse of credit and not
generating a bad record and fall into the bureau, since the suggested payroll loan ceiling will be respected with this new international practice of not overdrawing it beyond 35% of your salary.
With this reform, ASOFOM celebrates that the financial system will be the grantor and there will be no unregulated figures that encourage informality with hidden fees and unstructured contracts of unregulated companies that undermine the true objective of financial inclusion. This is good for the country, because the contracts, the institutions are forced to report to the credit bureau, take care of the interest rate caps and this will be reflected in the workers’ family economy.
Jorge Avante Arcos recognizes that “at ASOFOM we are very satisfied with the clarity and transparency that this reform entails and with a competition with clear rules in which it is perfectly known who is charging, what rate on this credit and who is providing a better service.
The Association of Multiple Purpose Financial Companies in Mexico, A.C. arises in 2006 with the purpose of strengthening the figure, as well as to provide solutions to the different problems within the sector, becoming an integrating vehicle. Today, with a series of policies and guidelines, it is a strengthened Association with high standards of compliance.
Its mission: seeks to strengthen, develop and promote the figure of Sociedad Financiera de Objeto Múltiple (SOFOM) inculcating the professionalization and consolidation of its affiliates, in order to promote collaboration, business, and financial cooperation between these institutions and those involved, as well as encouraging their contribution to the economic development of Mexico.
It is the largest and most influential Association of Non-Banking Financial Institutions in Latin America, through two pillars: institutionalization and technology.