Amendments introduced by Decree 70/2023 to the Credit Card Law
- Articles repealed by Decree 70/2023
1. Article 5 – Identification.
The repealed article required the identification of the cardholder with: (a) name and surname; (b) internal registration number; (c) signature; (d) date of issuance; (e) expiration date; (f) means to ensure inviolability; and (g) issuer identification. The repeal shall allow the issuance of unnamed cards.
2. Article 7 – Drafting of the Credit Card issuance agreement.
The repealed article required the drafting of the credit card agreement in two copies with easily legible typography, highlighting the clauses that generate liability to the cardholder and authorized text registered before the enforcement authority. The repeal will substantially simplify credit card agreements.
3. Article 8 – Perfection of the contractual relationship and Article 9 – Application.
The repealed articles provided that the agreement is only deemed to be perfected once the agreement has been signed, and the card issued and received by the cardholder. The repeal simplifies the proof of the existence of the agreement and favors the issuance of virtual cards, where there is no physical delivery of the card.
4. Article 14, items c) and e) – Nullity of clauses.
The repealed items established that the following clauses were null and void: a) clauses imposing a fixed amount for late payment of the summary and b) additional clauses not authorized by the enforcement authority. The repeal implies a potentially relevant change in the line of income for arrears since a fixed amount scheme could be generated. In addition, the repeal will allow adding additional clauses in an agile manner, prioritizing the will of the parties and the free contracting.
5. Article 17 – Sanctions.
The repealed article empowered the Argentine Central Bank to sanction issuers that did not comply with the duty to inform about the level of applicable interest rates The purpose of the repeal is to favor the free rate agreement between issuer and cardholder.
6. Article 32 – Duty of Information.
The repealed article obliged the issuer to provide the adhered merchant with: (i) identification material and informative publications; (ii) credit card loss and theft regime; and (iii) card cancellations due to theft, loss, or contractual termination. The repeal simplifies the number of obligations of the issuer with the affiliated merchant, again giving priority to the parties’ freedom of contract and reducing costs for the issuer.
7. Article 35 – Electronic terminals.
The repealed article obliged issuers to implement electronic terminals for consultation with the affiliated businesses, which they were obliged to use and comply with. The repeal deregulates the acquiring and processing market, allowing the adhered commerce to opt for different technologies in the processing flow.
8. Article 53 – Prohibition to inform.
The repealed article prohibited issuers from reporting card debtors to financial background databases (e.g., Nosis, Veraz). The repeal will allow issuers to report credit card debit balances to financial background databases enriching the existing information at the system level and promoting transparency.
9. Article 54
The repealed article obliged issuers to send monthly information to the Secretary of Commerce. The repeal eliminates the existing bureaucracy and allows issuers to freely determine their offers by publishing them in the manner and place they deem most appropriate.
- Articles modified by Decree 70/2023
1. Article 2 – Definitions.
The definition of “Issuer” is amended by indicating that the issuing entity may be of any nature and clarifying that its corporate purpose must include the issuance of credit cards.
2. Article 4 – Denomination.
The denomination of “Credit Card” is modified by eliminating the requirement of issuing a plastic card (“material instrument”). The amendment broadens the concept of “Credit Card” to “virtual” instruments, allowing the direct issuance of virtual credit cards, reducing issuance, packaging, logistics and distribution costs.
3. Article 15
The amended article prohibited the setting of differentiated fees in the same industry or category and set the fee cap at 3% for credit cards and 1.5% for debit cards, in addition to obliging merchants to settle payments with debit cards within a maximum of 3 business days. The wording of article 15 is totally modified, which will now regulate interest rates and establish the issuer’s obligation to inform the applicable financing rate. With this amendment, the fee is totally deregulated and will be left to what is freely agreed in the market, and it will be allowed to set differentiated fees by industry (for example, by volume).
4. Article 18 – Penalty interest.
The amended article fixed a cap of penalty interest that could not exceed the compensatory or financial interest rate by more than 50%. With this amendment, the issuer may freely determine the penalty interest, which may not be capitalized.
5. Article 22 – Monthly statement of operations.
The amended article established the obligation to issue and send to the holder the monthly statement. With the amendment, the term “preferably electronic” was expressly added, thus providing clarity to the sector as to the validity and even preference of electronic transmission over physical transmission (with the consequent impact on logistics and distribution costs).
6. Article 25 – Time of receipt.
The article is modified by eliminating the third paragraph where it was indicated that a copy of the account statement was available at the card issuing branch.
7. Article 38
The article is amended by eliminating the obligation that the agreement between the issuer and the supplier must be approved by the enforcement authority.
Validity of Decree 70/2023
Article 5 of the Civil and Commercial Code establishes that laws become effective after the eighth day of their official publication; therefore, considering that Decree 70/2023 was published on December 21st, 2023, it will become effective on December 30th, 2023. On the other hand, the treatment of Decrees of Necessity and Urgency (“Decree”) is regulated by Law No. 26122. The regulation establishes that the Chief of Cabinet must submit the Decree to the consideration of the Permanent Bicameral Commission within ten days of its issuance. The Permanent Bicameral Commission has 10 business days to issue an opinion on the validity of the Decree and send it to the plenary of both legislative chambers for its treatment. The Decree will only become ineffective if both chambers reject it. The Senate and the Chamber of Deputies may only accept or reject the Decree, but may not introduce amendments, modifications, or additions. The decision is made by absolute majority of those present.
