Background on CAME and its Significance
CAME, or Sociedad Financiera de Objeto Múltiple C.A., is a financial institution that has recently faced intervention by the Mexican regulatory body, the National Banking and Securities Commission (CNBV). This intervention stems from CAME’s critical financial insolvency, which has raised concerns among investors and the general public.
Who is CAME?
CAME is a Mexican financial entity that offers various investment products, including savings plans and fixed-income instruments. It has been a popular choice for investors seeking higher returns compared to traditional banking options.
Why is CAME Relevant?
CAME has been one of the largest non-bank financial entities in Mexico, with over 1.37 million clients as of December 2024. Its size and popularity make its intervention a significant event in the Mexican financial sector.
CNBV Intervention and Reasons
On June 9, the CNBV intervened CAME due to financial insolvency. The regulator detected accounting irregularities and substantial capital loss, placing CAME in the lowest capitalization category (Nicap 4), indicating a critical financial insolvency situation.
- Accounting Irregularities: The CNBV found discrepancies in CAME’s financial records, which raised concerns about the company’s financial health.
- Capital Loss: CAME experienced significant capital erosion, further exacerbating its financial instability.
- Nicap 4 Categorization: This classification signifies the lowest capital adequacy level, signaling critical financial insolvency.
The CNBV’s junta de gobierno held a working session on June 9 to analyze CAME’s situation and decided to intervene, suspend operations, and safeguard depositors’ interests as per articles 75 and 78 of the Popular Savings and Credit Law.
Previous CNBV Actions
The CNBV had been conducting supervisory visits to CAME since March 2024. Various preventive measures were implemented, and on May 21, CAME was notified of the initiation of a revocation procedure due to capitalization requirements non-compliance related to credit and market risks.
This revocation procedure remains ongoing.
Impact on Depositors
CAME had 1.37 million clients, making it the ninth-largest entity in terms of user count. The CNBV emphasized that depositors’ funds are protected by the Fondo de Protección, which guarantees up to 25,000 Unidades de Inversión (UDIS), approximately 212,000 pesos per individual or entity, regardless of the number or type of transactions.
However, around 14,000 depositors (approximately 1% of the total) hold amounts exceeding 212,000 pesos and risk losing the excess amount not covered by Prosofipo.
Broader Implications and Concerns
The case of CAME, though not systemic and not threatening the entire financial sector, puts depositors’ funds at risk and undermines public trust in financial inclusion efforts.
The CNBV’s efficiency in detecting irregularities and capital deterioration in a timely manner has been questioned. An autocratic analysis within the governmental financial system could help prevent similar cases in the future.
Strengthening regulatory authorities’ institutional capacity is crucial to ensure credibility and certainty for authorized intermediaries.
