Press Release
C. 11-13 th
El Salvador, June 10 , 2013.
CS begins preliminary investigation on interest rates raise The Competition Superintendence (CS) will investigate if the recent increase of loan interest rates carried out by certain banks could respond to an alleged horizontal agreement to “compensate” the elimination of the administration fee. The CS will request information to the affected costumers. “The Competition Superintendence will carry out a prior investigation to determine the existence of elements of a horizontal agreement committed by the involved financial institutions to “compensate” the administration fee recently eliminated”, asserted Francisco Diaz Rodriguez, Competition Superintendent.
The Competition Superintendence will initiate a prior investigation to gather information which will allow said agency to determine if the loan interest rates raise executed by financial institutions authorized by the Financial System Superintendence (FSS), and recently denounced by the Consumer Protection Authority (CPA), could respond to an alleged horizontal agreement to “compensate” the latest elimination of the administration fee, pursuant to Provision 25 letter a) of the Competition Law (CL), and, hence, obtain elements which enable the initiation of an administrative sanctioning procedure. As a first step in this prior inquiry, the CS will request the customers of loan services rendered by financial institutions to provide the letters notifying them the increase of the interest rates of the loans they have been granted. Said letters may be photographed or scanned (with clear image) and sent via e1 mail to: casos@sc.gob.sv or personally delivered at the CS´ offices .
In accordance to Provision 25 letter a) of the CL: “Anticompetitive practices among competitors are prohibited, these practices include the following, amongst others: a) Establish price fixing agreements or other purchase or sales conditions under any form whatsoever”. Provision 41 of the CL states the following: The Superintendent may carry out, before starting a sanctioning procedure, previous actions through the officials of the Superintendence with the power to investigate, inquire and inspect any anticompetitive practice, with the purpose of preliminarily determining the concurrence of potential violations to the Law...”. If as a result of this prior investigation, the CS proves the existence of elements of an anticompetitive practice the CS will ex-officio begin an administrative sanctioning procedure. If the existence of a horizontal agreement is proven, the CS will, amongst other actions, order the anticompetitive practice to be ceased and impose the respective fines, as sanctions.
Located at Edificio Madre Selva Primer Nivel, Calzada El Almendro, 1ª Ave. El Espino No. 82, Antiguo Cuscatlán, La Libertad, El Salvador, C. A. Telephone number: 2523 6600 1