The confession of usury

11181215_431781130334686_7750035536563262168_nBy Hugo Rangel Vargas / Chronicles Magazine Group

The National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF) has announced that in the first half of 2015 fines to financial institutions grew by 15 million pesos compared to the figure for the same period from last year. The number of complaints filed by users against banking institutions also increased by 12 percent for the same period, and it noted that 98 percent of these were caused by malpractice, abuse and illegal charges made by banks .

No wonder that the four institutions have more sanctions are just those with the highest value in assets, which are usually found within the 10 largest financial institutions in Latin America: Bancomer, Banamex, Banorte and Santander. And there are these four corporations that with unfair contracts and usurers have focused for years the earnings growth of the national financial sector themselves that despite the environment of economic contraction last year saw increased their profits by 23 percent This increase mostly coalesced these four banking corporations.

The abuse of users of financial services are not isolated incidents or is product growth, as it has tried to point the holder CONDUSEF, “the largest banking economy”; but it is institutionalized in the products and services through contracts of adhesion of financial services; and despite the limited penetration of credit in business, the banks maintain their rentier havens.

A recently released by the Bank of Mexico entitled “Report on the conditions of competition in lending to SMEs” report notes that micro credits pay 3% more expensive compared to medium-sized enterprises; plus it demonstrates the utter contempt of the financial sector towards this group of companies since they are only 32 banks and at least 329 non-bank financial intermediaries that provide credit to small and medium businesses. The study also highlights “the suppliers of credit to micro and small enterprises are not in dispute customers intensively.”

The banking corporations in the country have maintained their privileges at the expense of economic growth and figures account for a credit supply of poor quality, inaccessible to small businesses and high costs.

The Untouchables conditions of banks in the country are portrayed by a recent report from the firm SNL Financial detailing in the country operate four of the 10 largest banks in Latin America, they have not seen any effect on the value of their despite the depreciation of assets that has been suffering the Mexican currency.

Credit and financial services are strategic for the development of the national economy which in itself gives them the object of public interest element. However, usury is rampant in this sector remains a stumbling block for the country’s competitiveness, but a driver of it.

It would be urgent to discuss the country a comprehensive financial reform to put development at the center of the economy and the interests of the bank. This could start with the regulation of differential interest rates, fees charged by banks for financial services and to raise fines CONDUSEF charges for abuses of these corporations. Until this happens, the confession of profiteering and usury remains the sin of an economy that rich bankers have poor companies.