The decisions issued by the Council of State and the Constitutional Court in connection with the right to a clean credit rating (see Court Upholds the Right to a Clean Credit Rating) have prompted the Superintendency of Banks to issue a circular letter addressed to all financial entities. The circular indicates that new methods may be used to analyze the risk involved in granting credit to clients.

The superintendency suggests that financial entities also use financial information submitted by the clients themselves or information from any other pertinent source. This information should enable the financial entity to carry out an adequate evaluation of the debtor's payment capacity and assess the risks involved in granting credit.

The Superintendency of Banks has also pointed out that since it is financial entities that report their clients' reliability over payments to risk information centres, it is they who must design and implement operating mechanisms to update and rectify information on credit users.

In connection with this regulation, financial entities have announced that the new mechanisms for analyzing client credit risk might increase the cost of granting credit.

For further information on this topic please contact Luis Carlos Neira at Holguin Neira y Pombo Abogados by telephone (+57 1 312 2473) or by fax (+57 1 312 2513) or by email ([email protected]).