New Regulations by Diputados to Ensure Credit and Debit Card Cancellation Within 5 Days

Background and Relevance

Millions of users of credit and debit cards have long complained about abusive clauses imposed by certain financial institutions and commercial establishments. These unfair practices are set to change, as new regulations have been approved to prohibit the sending of unsolicited plastics and ensure quick cancellation without penalties.

The Mexican Chamber of Deputies unanimously approved an initiative by Morena’s coordinator, Ricardo Monreal, aiming to end these unlawful actions by some financial entities. This move is crucial for protecting users from such exploitative practices.

Key Changes Approved

1. Rapid Cancellation: Financial entities must allow users to cancel their credit or debit cards through in-person, telephone, or digital means. In the latter case, a visible and direct cancellation button must be included in mobile apps, online banking platforms, and official websites, available 24/7.
2. Defined Timeframes: The cancellation of credit or debit cards must be completed within five business days from the user’s request, without any cost. Any associated charges, commissions, or penalties are strictly prohibited and must be documented digitally or physically to confirm contract termination.
3. No Unsolicited Cards: The issuance of credit or debit cards without explicit user consent is now nullified. In such cases, users are not required to cancel the unsolicited cards.
4. No Additional Costs: Financial entities cannot generate annual fees, commissions, or other concepts associated with credit or debit cards. Additionally, the user’s credit history, payment behavior, or lack of usage cannot negatively impact their credit score or be reported to credit bureaus like Buró de Crédito.
5. No Extra Fees: Financial entities and commercial establishments cannot charge commissions for granting financial services, insurance, memberships, or additional benefits not previously authorized in the contract or without explicit user consent.
6. Commissions Must Be Approved: For credit lines, loans, or revolving credits associated with a card and personal loans, financial entities must document these operations in writing on the forms used for customer contracts.
7. Transparency: Card issuers must ensure that all information regarding costs, charges, and commissions related to the product is clear, truthful, and sufficient, adhering to transparency, good faith, and user protection principles.

Monreal emphasized that users should be able to inform the branch that they did not request the card, refuse it, and avoid unnecessary annual fees, penalties, or commissions. If these regulations are not respected, financial entities will be obligated to refund any improper charges within five business days of the report.

Context and Impact

Monreal highlighted that a significant number of people possess credit and debit cards. By the end of 2024, there were 37 million credit cards in circulation with a portfolio financing balance of 637 billion pesos, an 8.5% increase from 2023. BBVA and Banamex held the largest market shares with 10 million cards each.

Regarding savings accounts (debit), 30% of individuals with this product cited their salary as the source, 23% pointed to a savings account, and 18% mentioned it as the means to receive government support.

Although the regulatory framework acknowledges users’ right to terminate contracts at any time, practical limitations hinder this principle of contractual freedom. These limitations manifest in two ways:

• Desadherence: Many financial institutions and commercial establishments require unnecessary in-person procedures, impose ambiguous requirements, or create unjustified delays that complicate and exhaust the cancellation process.
• Unwanted Adherence: There is a proliferation of credit card issuance without explicit user consent, often under vague promotions or mechanisms that mislead users into agreements without valid consent.

Implementation Timeline

The Chamber of Deputies approved, with a unanimous vote of 467, the decree reforming and adding various provisions to the Law for Transparency and Organization of Financial Services regarding credit and debit card cancellation and issuance by financial institutions and commercial establishments. It has been sent to the Senate for constitutional effects.

According to the approved initiative, these changes will take effect 30 days after their publication in the Diario Oficial de la Federación.

Financial entities will have a maximum of 180 natural days to make the necessary operational, technological, and contractual adjustments to comply with these regulations.