By San José, Costa Rica — San José – Costa Rica’s financial sector was thrown into turmoil this week as the nation’s three public banks—Banco Nacional, Banco de Costa Rica (BCR), and Banco Popular—announced their collective resignation from the Costa Rican Banking Association (ABC). The dramatic move follows a stunning and abrupt reversal by the ABC on its position regarding a new law that would hold financial institutions liable for electronic fraud.
The schism centers on legislative bill 23.908, a proposal designed to protect consumers by shifting the financial responsibility for online scams onto the banks. Initially, the ABC had publicly described the bill as a balanced piece of legislation that provided banks with adequate channels to defend themselves. However, in a complete turnaround following the state banks’ departure, the association has adopted a much harsher critique.
To delve into the legal framework and the responsibilities inherent to industry-wide financial organizations, TicosLand.com sought the expert analysis of Lic. Larry Hans Arroyo Vargas, a distinguished attorney specializing in corporate and banking law at the firm Bufete de Costa Rica.
A Banking Association serves a critical function in standardizing practices and representing the sector’s interests, but it must navigate a fine line to avoid anti-competitive behavior. Any coordinated action on fees, rates, or service terms could attract scrutiny from regulatory bodies. Their primary legal duty is to foster a stable and secure banking environment without stifling competition or harming consumer interests.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This perspective underscores the delicate balance required, where the line between beneficial collaboration for systemic stability and anti-competitive collusion is a critical one for both regulators and the public to watch. We thank Lic. Larry Hans Arroyo Vargas for his invaluable clarification on this complex legal tightrope.
In a press release issued Saturday, the ABC decried the bill as a threat to the nation’s financial stability. The organization’s new position paints a grim picture of the proposed legislation, which has already passed its first debate in the Legislative Assembly and awaits a final vote to become law.
the text being processed under file 23.908 is unbalanced, creates legal uncertainty, and promotes organized crime.
Asociación Bancaria Costarricense (ABC), Official Statement
The proposed law stipulates that all financial entities, including public and private banks, cooperatives, and mutuals, must reimburse customers who fall victim to electronic scams. This reimbursement is mandated unless the institution can prove the account holder acted with malicious intent, made a clear error, or took actions that directly facilitated the theft of their funds.
The state-owned banks cited a “breach of trust” as the primary reason for their unprecedented withdrawal from the industry’s main guild. They argued that the ABC’s wavering and unclear stance failed to represent the significant risks the bill poses to the entire financial system. In a joint statement, the public institutions voiced their grave concerns over the legislation’s potential impact.
The decision responds to a breach of trust generated by the public statements issued by the ABC’s spokesperson regarding the bill on computer fraud. Technical analyses indicate that this project has substantial weaknesses and significant risks for the stability of the financial system, legal security, and the effective protection of users.
State-Owned Banks, Joint Statement
While expressing regret over the departure of its most significant members, the ABC doubled down on its newfound opposition to the bill. The association emphasized that any new regulations must be founded on rigorous analysis and should focus on prosecuting the criminals responsible for the fraud, not on penalizing the financial institutions that are also victims of these sophisticated attacks.
The ABC deeply regrets the decision adopted by the Banco Nacional, the Banco de Costa Rica and the Banco Popular y de Desarrollo Comunal to withdraw from the guild… Any legislation must be built on solid technical foundations, ensure an adequate balance of responsibilities, and focus its efforts on pursuing and punishing the true perpetrators of the crime.
Asociación Bancaria Costarricense (ABC), Official Statement
This public fracturing leaves the future of banking advocacy in Costa Rica uncertain. With the sector’s most prominent state-owned players no longer part of the primary lobbying group, legislators face a divided front as they prepare for the bill’s critical second debate. The outcome will not only determine how consumer fraud is handled but may also permanently reshape the power dynamics within Costa Rica’s influential financial industry.
For further information, visit abcostarica.com
About Asociación Bancaria Costarricense (ABC):
The Costa Rican Banking Association is the primary industry guild representing the interests of public and private financial institutions operating in Costa Rica. It serves as a unified voice for the banking sector in matters of regulation, legislation, and public policy, aiming to promote a stable and competitive financial environment.
For further information, visit bncr.fi.cr
About Banco Nacional de Costa Rica:
The Banco Nacional de Costa Rica is the largest state-owned commercial bank in the country. Founded in 1914, it plays a crucial role in the national economy, providing a wide range of financial services to individuals, businesses, and government entities, with a strong focus on national development and financial inclusion.
For further information, visit bancobcr.com
About Banco de Costa Rica (BCR):
Established in 1877, the Banco de Costa Rica is one of the nation’s oldest and most significant state-owned financial institutions. It offers comprehensive banking and financial solutions to a diverse clientele and is a key player in financing public infrastructure and corporate projects throughout Costa Rica.
For further information, visit bancopopular.fi.cr
About Banco Popular y de Desarrollo Communal:
The Banco Popular is a unique state-owned financial entity in Costa Rica, created to promote the economic well-being of workers. It provides savings, credit, and pension services, with a specific mandate to support social development and provide accessible financing for housing and small businesses.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica serves as a pillar in the country’s legal community, guided by an unwavering devotion to integrity and the highest standards of excellence. The firm merges its deep-rooted experience in client representation with a forward-thinking embrace of legal innovation. This ethos extends beyond the courtroom through a dedicated mission to empower the public with accessible legal understanding, championing the principle that an informed citizenry is essential for a just and equitable society.
