President Piñera presents financial portability bill: “People will be able to change banks much more easily, with fewer processes and lower costs”
President Piñera has announced measures designed to make it easier to move checking accounts, credit lines, car loans, consumer loans and credit cards from one financial institution to another quickly and with lower costs. He was speaking at a neighborhood committee meeting in Ñuñoa accompanied by its leaders.
On Monday, President Sebastián Piñera presented a bill designed to make it easier for people to move their checking accounts, credit lines, car loans, consumer loans and credit cards from one financial institution to another quickly and less expensively.
“This is a tremendous opportunity for millions and millions of Chilean families to improve their credit conditions, lower interest rates and find relief and thus greater quality of life through lower payments using this simple and quick system,” the President said. He made the announcement at an event in the municipality of Ñuñoa, where he was accompanied by Treasury Minister Felipe Larraín and Finance Minister Juan Andrés Fontaine.
Portability will allow for refinancing with better financial conditions for all sorts of loans, benefitting the nearly one million households with mortgage debt, the 2.6 million people with consumer loans and the 200,000 people with a car loan.
Currently, clients can pay over CLP$560,000 to refinance mortgage debt. This bill would lower those costs to CLP$244,000. Furthermore, processing times would drop from 75 days to 30.
“People will be able to change banks much more easily with fewer processes and lower costs,” added the President, who had met with families who could be direct beneficiaries of the initiative ahead of the event.
The mechanism will allow an individual who wants to change to a new entity or refinance a loan to request a liquidation certificate online that outlines all of their products. This document can then be used to request quotes for loans and products from other lenders.
Once he or she has chosen the new institution, the client signs a financial portability request that will allow them to automatically begin the process of closing their financial products and opening new ones with a new entity.
This initiative will benefit the 97% of adults who have some kind of financial product, including the owners of 3.8 savings accounts, 4 million checking accounts and 20 million credit cards.