A bill has been submitted to the National Assembly proposing to prohibit the practice of advance discounts for late payments.

The document also provides that banks agree to enter into a payment arrangement with the debtor when the customer is more than 90 days late in paying the loan.

See “Panama: Loan Portfolio Still Rising”

The Assembly’s statement notes that “… Among the measures, the draft bill of Deputy Marylín Vallarino, proposes to favor the mechanisms for the consolidation of debts, suppressing the collection of interest for more than 90 days and prohibiting the practice of discounting interest in advance.

In the explanatory statement, the parliamentarian argued that citizens have a high level of debt and that there is an aggressive campaign by companies that are responsible for issuing credit cards worsening the financial situation of Panamanians.”

Samuel Moreno, president of the National Association of Economists, told Panamaamerica.com.pa that “... Entering the business of collecting interest rates from banks with a law is not the ideal solution because we could be intervening in activities of the private initiative.”

Moreno added that “… legislation can be made in which technical criteria can be established so that interest rates are more adequate to economic reality, that is, to put limits.”