/ Financial Portability Act published8 July, 2020
On June 9, 2020, Law No. 21,236 on Financial Portability was published in the Official Gazette the purpose of this law is to simplify and significantly reduce the costs and time involved in changing the supplier of financial products or services (checking accounts, credit and debit cards, as well as mortgage, consumer and automobile loans), providing individuals and SMEs in particular with better access conditions, establishing portability as an inalienable right for the customer. Portability shall make it easier for people to compare costs, interest and fees of financial products offered.
Without prejudice to the benefit it means for the consumer, portability entails a process with tight deadlines for financial institutions, which are also those who must make the arrangements for closing and migrating the products to the institution from which the customer is migrating, which shall mean greater competition and the need for more resources to comply with the processes within the deadlines and in the ways established by law and its regulations.
With respect to the financial portability process, it begins with the application for portability before the supplier to which the financial products and services are to be transferred, and must be accompanied by the settlement certificate, which in turn may be requested by the new supplier, who, upon accepting this application, shall issue a written and binding offer of portability, which shall be valid for at least 7 days; if accepted by the client, it must be formalized in writing and shall grant a mandate for the termination of the products and services contracted with the entity from which it migrates.
The client enters into a contract with the new supplier, who must inform the customer of the effective termination of the products and services, in accordance with the rules applicable to each financial product. Likewise, this portability may contemplate portability with subrogation, by virtue of which the customer contracts a loan with a new supplier, in order to pay the one maintained with a previous supplier, configuring, by the sole application of the law and even against the will of the initial supplier, a special credit subrogation.
Another advantage that portability presents for the consumer is related to the costs associated with notaries and real estate agents, since they may not charge a surcharge on the amount of the new loan contract, unless the principal is greater than that of the initial loan, in which case only the difference between the two principal amounts shall be charged.
The regulation regarding the processing of personal data of the customer who exercises the portability, regulated in article 25 that refers to Law No. 19,628 on Privacy Protection, adding the obligation to take the necessary measures to guarantee the security and the reserve in the data processing, restricting the use of these data with respect to the purposes for which it was authorized by its holder, the portability. It is curious to note that the submission of a request for portability implies the consent of the holder to the processing of personal data. This is a tacit consent, which would contradict the provisions of Law No. 19,628 and the bill amending it, which require express consent for the processing of personal data.
The Financial Portability Act becomes effective within 90 days of its publication.