21 Dic 23 Modifications to Law No. 25,065 on Credit Cards

Agustín Cerolini, Matías Ferrari, Natalia Artmann and Aranza Solis

Through Decree No. 70/2023 on «Basis for the Reconstruction of the Argentine Economy» (the «DNU» for its acronym in Spanish) dated December 21, 2023, the National Executive Power (the «PEN» for its acronym in Spanish) introduced certain modifications to the credit cards regulations.

Among the main measures adopted by the DNU are the following:

– It repeals Sections 5°, 7°, 8°, 9°, 17, 32, 35, 53 and 54 of Law No. 25. 065 «Credit Cards» (the «LTC» for its acronym in Spanish) related to the identification of the user, the drafting of the credit card issuance agreement, the execution of the contractual relationship, the issuance of credit card application, the penalties to entities that do not comply with the obligation to inform or, as the case may be, do not comply with the provisions related to the level of the rates to be applied as established by the Central Bank of the Argentine Republic (the «BCRA» for its acronym in Spanish), the duty of information between issuer and supplier, the elimination of the obligation of issuing entities to send monthly information on their offers to the Secretariat for Industry, Commerce and Mining (the «SICyM» for its acronym in Spanish) and the power of the BCRA to impose the corresponding sanctions in case of non-compliance with the obligation to inform reported by the SICyM.

– Substitutes Section 1 and eliminates from the credit card system the terms «complex and systematized«.

– Substitutes subsection a) of section 2 regarding the concept of «issuer», as follows: «a) Issuer: is the entity, of any nature, as long as it is included in its corporate purpose, that issues Credit Cards, or makes the payment effective«.

– It replaces article 4 as to the denomination of «credit card». The new article establishes that: «Credit Card is generically referred to as the user’s identification instrument, which may be physical or virtual, magnetic or of any other technology, arising from a previous contractual relationship between the holder and the issuer«.

– It repeals subsections c) and e) of section 14 on nullity of clauses. The repealed subsections stipulated as null and void the clauses that imposed a fixed amount for late payment of the statement and those that were additional and not authorized by the enforcement authority.

– The title of Chapter VI is replaced by the following: «CHAPTER VI Fees – Information» (previously it was entitled «Commissions»).

– It replaces section 15 and provides that «The issuer shall compulsorily disclose to the public the financing rate applied to the Credit Card system«. Previously, such section stipulated that the issuer could not set different fees for commissions or other charges among stores belonging to the same category or in connection with the same or similar products or services. It also mentioned that the issuer of purchase and credit cards could not make discounts or apply charges higher than 3% on the settlements presented by the supplier. For bank debit cards this percentage was 1.5%.

– It replaces article 18 and eliminates the limit for the application of punitive interest. It only maintains the prohibition to capitalize.

– Substitutes article 22 and indicates that the monthly account summary should preferably be in electronic form.

– Substitutes section 25 and eliminates the last sentence which stipulated that «The copy of the account statement shall be available to the cardholder at the card issuing branch«.

– It replaces section 38 and eliminates the obligation for the contract to be approved by the enforcement authority. Thus, the new article maintains the minimum content of the contract between issuer and supplier.