SUPERVISOR PRINCIPAL DE CONDUCTA DE MERCADO – SENIOR

1. ¿Cuáles considera Ud. son los principales retos de la supervisión de conducta de mercado que
realiza la SBS en el actual entorno de cambios tecnológicos y de aparición de nuevos productos,
servicios, canales y actores no tradicionales? (3 puntos)

2. ¿Considera Ud. que la fijación de topes a las tasas de interés generará beneficios para los
consumidores en todos los segmentos de la población? En todo caso, ¿quiénes considera Ud.
que serían los consumidores perjudicados por la fijación de dichos topes? ¿la SBS podría
realizar alguna acción para mitigar dicho perjuicio? (3 puntos)

3. ¿Considera Ud. que el precio de los créditos debe ser capturado únicamente a través de la tasa
de interés (incluyendo el costo de los servicios adicionales), o piensa que es válida la existencia
de servicios adicionales que puedan ser cobrados de forma independiente a través de una
comisión o un gasto? En todo caso, ¿qué condiciones deben cumplirse para que se permita
dicho cobro de manera separada? (3 puntos)
4. Lea el siguiente caso práctico y responda las preguntas planteadas (en español o inglés)

Case – Part 1

About F-Group

F-Group is a very successful holding company specialized in retail products and it has been working
with one of the local top banks as a business partner to finance customers’ purchases. However, F-
Group was dissatisfied with the high rate of rejected loans and the profit sharing arrangement, so it
has decided to establish its own retail bank (F-Bank). At the beginning, this new bank was focused on
retail consumers and grew quickly in the credit card business. However, over the years, F-Bank
started growing into other market segments.

The main retail channel for F-Bank are F-Group stores. Sales staff of F-Group stores is remunerated
through commissions based on the number and volume of new credits cards, which usually are sold
‘on the spot’ inside F-Group stores. F-Bank also opened independent branches to handle consumer,
micro and small business loans; while medium business, corporate and housing loans are managed
from the main office. F-Bank has not established minimum hiring requirements for the employees of
their new independent branches and the sales staff of F-Group has no minimum previous experience
with financial products.

Based on its positioning as the only alternative of payments in F-Group´s stores, massive advertising,
wide distribution network and highly motivated sales staff, as well as because it also accepted clients
who were turned down from other banks in the market, F-Bank has experienced a sustained loan
portfolio growth, although this process hasn’t been free from users’ complaints related to inadequate
business practices and lack of transparency.

F-Bank’s credit products

F-Bank designed a credit card to build its visibility, reputation and quickly gain market share. The
product marketed under the name of SuperFCard became very popular short span of time. The
current market share of SuperFCard became 15% of all outstanding credit cards. F-Bank aggressively
promotes SuperFCard with high-volume advertising through its distribution channels. The headline of
the advertising is “Fulfill your dreams! No limits, no questions, no collateral!”

Nevertheless, F-Bank would not be conducting a detailed evaluation of the risks that may arise from
the SuperFCard. An internal evaluation (motivated by the growing number of complaints) revealed
that most of the consumers who got SuperFCard have no standard agreement signed with F-Bank on
file and their files show no proof of disclosure information provided. The evaluation also reveals that
files have no documents about important terms and conditions.

Over time, F-Bank has also introduced personal loans and consumer auto loans, and its entrepreneur
department has developed two micro business products (a credit card and a micro loan) and three
small business loan (credit line, regular fixed-term loan and an equipment loan with better terms). Also
recently they have expanded into the medium business and corporate loans, although they also cater
to informal and semi-formal customers with loan requirements in these markets. Finally, they have
also entered the housing market, a very competitive market segment where F-Bank launched two
products: a regular mortgage loan and a social housing loan backed by the Government by a stimulus
program.

Recently, the Government has passed a Law that sets an interest rate cap for consumer, micro
business and small business loans, giving the task of setting the cap value to the Central Bank; which
has set the interest rate cap for these loans at 83% (annual effective rate). In order to evaluate
compliance to this Law, you have been given the following information (see Excel tables): a product
catalog, and the loan portfolio and client portfolio for the credits generated in the past month (1000
loans).

Questions:

4.1. How many loans exceeded the maximum interest rate? How many of these were credit card
loans? (2 puntos)

4.2. How many different clients were affected? Also, assuming 30-day months and 360-day years,
how much interest in excess of the cap charged F-Bank to its affected customers? (3 puntos)

Case – Part 2

You have been tasked to conduct a review on the compliance of F-Bank’s SuperFCard portfolio to the
interest rate cap regulation set by the Central Bank due to a recent law passed by Congress. To fulfill
your task, you have already requested information regarding consumer credit card loans, focusing
specifically on clients with cash advance loans requested during the current month. The bank wouldn’t
usually monitor charges made to their customers, so they prepared an ad-hoc report to comply with
your request. Here’s an excerpt from such report:

Client N° Cash advance Days since Annual Int. Accrued

size ($) disbursement Rate (%) interest ($)
1 10,000.00 20 80.00 372.60
2 20,000.00 5 70.00 193.47
3 15,000.00 24 75.00 709.41
4 10,000.00 15 85.00 293.02
 5 5,000.00 11 80.00 107.03
6 10,000.00 19 75.00 392.59

Given the poor track record of F-Bank in disclosure to customers and having detected inadequate
business practices in a prior evaluation, as well as many customer complaints regarding high-interest
rates, you are suspicious that something may be amiss in their billing practices. However, the recent
regulation issued by the Central Bank has set the interest rate cap for credit card loans at 83%
(annual effective rate), so there isn’t much room to maneuver around that cap.

After doing some interviews, you discover that there are no written policies regarding interest rate
settings or adjustments but recently the Product Owner has been pushing internally for an increase in
the revenue obtained from SuperFCard and requesting that the credit card portfolio should have their
interest rate raised, even before the bank disclose this increase to their customers. “Clients don’t
know what they are paying for anyway”, was a quote from the Product Owner mentioned by one of the
bank’s employees you interviewed.

Questions:

4.3. Given the information contained in the report, what do you identify? What would be the course of
action you would recommend? Indicate if you would request additional information, and why. (3
puntos)

4.4. What would be the current issues surrounding F-Bank’s pricing decisions and business
practices? Explain and prioritize the identified issues. (3 puntos)