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 Business News | March 2007 
Mexico Banks Cite Studies to Fight Fees Bill
 El Universal
Banks ramped up their opposition to Senate bills designed to cap consumer costs by citing findings from two studies concluding that lenders are reducing fees and interest rates on loans.
Mexico´s six biggest banks, including units of Banco Bilbao Vizcaya Argentaria SA and Citigroup Inc., are on average charging less than they were two years ago for 10 out of 16 services and for three out of five types of loans, the Mexican Banks Association said Thursday, citing an analysis by Deloitte Touche Tohmatsu.
A separate Cap Gemini SA study showed bank fees in Mexico are cheaper than those in most parts of the world.
"We´re trying to fight a perception that bank services are expensive and that we have no interest in changing the situation," said Marcos Martínez, president of the trade group and CEO of Santander Central Hispano SA´s local unit. "Fees will continue to fall because of competition."
Lenders are opposing at least three separate Senate bills designed to increase regulation of levies, including credit card fees and charges for automated teller withdrawals. Backers say the legislation will help increase access to financial services in Latin America´s second largest economy. Domestic bank lending equals 11 percent of Mexico´s US$877 billion economy, a third of the percentage in Brazil.
BROADEN THE SCOPE
Central Bank Governor Guillermo Ortiz asked senators in a hearing Wednesday to broaden the scope of a 2004 law he has used to force banks to forgo fee revenue of at least US$200 million annually. Ortiz said he opposed the introduction of caps on fees because price controls don´t work. He said it would be "impossible" to track all products banks introduce on a daily basis.
Sen. Fernando Castro Trenti of the Institutional Revolutionary Party, one of the legislators proposing a cap, on Wednesday said bank "fees are excessive´."
Martínez told reporters he presented the findings of the studies to senators Wednesday in a bid to change their views.
Both studies covered the six largest banks in Mexico, which also include units of Santander, HSBC Holdings plc, Bank of Nova Scotia and locally owned Grupo Financiero Banorte SA.
Together, the six lenders control about 90 percent of Mexico´s banking assets.
Fees on consumer products levied by the six largest banks are lower than those in 19 other countries in North America, Europe and the Asia Pacific region for an average basket of services typically used by Mexican consumers, according to the Cap Gemini study.
Mexican consumers use fewer financial services than those in other parts of the world, in part, because of the cost, according to Cap Gemini. For a broader basket of services that are standard in other countries, Mexican banks rank as the most expensive, according to Cap Gemini.
Pension Bill Stirs Dissention
Herald Mexico
A major overhaul of the social security system for 3 million state workers appears headed for quick approval in the Chamber of Deputies, but not without vigorous opposition from the Democratic Revolution Party (PRD), whose members occupied the Chamber´s speakers platform Thursday to protest what they call the "bankers´ law."
The proposed reform will be sent simultaneously to the Finance and Social Security Committees, a blow to the PRD that controls the Social Security Committee but not Finance.
The PRD objects to a provision in the proposed law that creates for state workers a public version of the privately operated "Afores" used to invest funds in personal retirement accounts, calling it a "trap" that will lead to privatizing social security for state workers.
However, the measure has the solid support of President Calderón´s National Action Party (PAN) and the Institutional Revolutionary Party (PRI), which along with two smaller parties have more than enough votes to pass the reform.
Shortly after noon, as the initiative was being read into the record, PRD deputies left their seats and gathered around one side of the "tribuna," the three-tiered area in the front of the Chamber where the presiding officer and other lower house leaders sit.
This is familiar territory for PRD deputies, who managed to prevent former President Vicente Fox from delivering his State of the Nation Address last Sept. 1 by refusing to abandon the tribuna.
This time, however, the deputies retired after the bill was read.
Mexican government workers have traditionally been powerful as well as numerous, and they enjoy lifetime health care at ISSSTE hospitals and retirement benefits beginning at age 48 for women and 50 for men. While non-government workers are usually enrolled in the social security system known as IMSS, government workers belong to ISSSTE, the State Workers´ Social Services and Security Institute.
The proposed ISSSTE reform, backed by President Calderón, will raise the retirement age to 58 for women and 60 for men over the next 10 years. It will also increase the government contributions to the various ISSSTE funds, including medical services.
The controversial provision, however, is the availability of individual pension accounts to new ISSSTE members, a departure from the traditional common pool. Although the individual pension plan is voluntary, it has drawn opposition from some unions.
Agustín Rodríguez, who heads the organized workers at the National Autonomous University of Mexico (UNAM), accused the PAN and PRI leadership of pushing through the reform without consulting with unions.
"We don´t know the proposal, we don´t know the text, nobody has told us anything," Rodríguez said. "We reject any modification to the current approach of solidarity and sharing." |
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