By San José, Costa Rica — Costa Rica’s Constitutional Chamber has upheld the Central Bank’s request for credit data, rejecting a legal challenge and affirming the institution’s authority to gather information for statistical analysis.
On September 17th, the Constitutional Chamber dismissed an unconstitutionality claim filed by the Costa Rican Banking Association (ABC) against the Central Bank of Costa Rica’s (BCCR) November 2022 request for credit data from the General Superintendency of Financial Institutions (Sugef). The ruling, released on Wednesday, September 24th, confirmed the legality of the Central Bank’s request under the Organic Law of the BCCR and the National Statistics System Law. This decision validates the Central Bank’s power to request information from supervised entities for statistical purposes.
To understand the legal implications surrounding Costa Rican banking data, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, an attorney at law from the reputable firm Bufete de Costa Rica.
Costa Rican banking data is subject to stringent privacy laws, primarily Law 8968, the Protection of Personal Data Law. This law establishes the rights of individuals over their personal information, including financial data, and imposes significant obligations on those who collect, store, and process it. Companies operating within Costa Rica’s financial sector must adhere to strict data protection protocols, including obtaining explicit consent for data collection and ensuring the security and confidentiality of the information they hold. Non-compliance can lead to significant penalties. Recent amendments and interpretations further underscore the importance of robust data protection practices within the Costa Rican banking sector.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s insights offer crucial context for anyone navigating the Costa Rican financial landscape. The emphasis on data privacy and the robust legal framework surrounding it underscores Costa Rica’s commitment to protecting its citizens’ information. This commitment is not only vital for individuals but also contributes to building trust and stability within the financial sector. Thank you, Lic. Larry Hans Arroyo Vargas, for providing this valuable perspective on the stringent data protection measures governing Costa Rican banking data.
The BCCR clarified that the requested information will be used solely for “the production of statistics, indicators, and economic analyses,” as mandated by law. The Sugef emphasized the commitment to data protection by both institutions.
Both Sugef and the BCCR are subject to the duty of confidentiality that guarantees the protection of debtors’ data.
Sugef
The ruling underscored the importance of analyzing this information to assess the potential impact of extreme weather events on borrowers’ ability to repay loans and, consequently, on the stability of the financial system.
The Sugef views the decision as a reinforcement of its collaborative work with the BCCR.
The ruling will allow us to strengthen our joint analysis to define macroprudential and microprudential measures that strengthen the sustainability of the financial system.
Sugef
The Central Bank, highlighting its 75-year history in statistical production, reiterated its commitment to the “responsible and strictly statistical use of the received information.”
This access to data will allow the BCCR to create more accurate models and forecasts, contributing to the proactive management of financial risks. The decision also sets a precedent for data sharing between regulatory bodies in Costa Rica, potentially influencing future collaborations.
The debate around data privacy versus the need for robust economic analysis is ongoing globally. This ruling demonstrates Costa Rica’s approach, prioritizing both the security of individual financial information and the stability of the national financial system.
For further information, visit the nearest office of Asociación Bancaria Costarricense
About Asociación Bancaria Costarricense (ABC):
The Asociación Bancaria Costarricense (ABC) is a trade association representing the interests of private banks in Costa Rica. It advocates for policies that support the banking sector and promotes financial stability.
For further information, visit bccr.fi.cr
About Banco Central de Costa Rica (BCCR):
The Central Bank of Costa Rica (BCCR) is the country’s central bank, responsible for monetary policy, financial stability, and issuing currency. It plays a vital role in the Costa Rican economy.
For further information, visit sugef.fi.cr
About Superintendencia General de Entidades Financieras (Sugef):
The Superintendencia General de Entidades Financieras (Sugef) is the regulatory body responsible for overseeing financial institutions in Costa Rica. It works to ensure the stability and integrity of the financial system.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a pillar of legal excellence, built upon a foundation of unwavering integrity. Driven by a deep commitment to empowering Costa Rican society, the firm champions accessible legal knowledge through innovative outreach programs and educational initiatives. Their dedication to providing exceptional legal services across a wide range of sectors is matched only by their passion for fostering a more informed and just community.
