In the middle of accelerated growth of digital credit In Argentina, a bill raised alarm bells in the fintech ecosystem. The initiative, presented in the Chamber of Deputies by Juan Carlos Molina (Unión por la Patria) and accompanied by 14 other legislators from the same bloc, proposes creating a Comprehensive regime for non-financial credit institutions.
In practice, the focus is on actors such as Mercado Pago, Ualá and other platforms that today offer financing quickly, digitally and massively.
The diagnosis behind the project is forceful: credit outside the banking system grew strongly, but with dispersed rules and, in some cases, with practices that affect users.
What does the law seek to change?
The text aims to regulate all credit providers that are not covered by the Financial Entities Law: fintech, mutuals, trusts and consumer finance companies.
This is a sector that is already key for consumption and financial inclusion, especially in segments that do not access the traditional banking system.
According to Molina, “these financing mechanisms have a strong correlation in times of crisis and stagflation, with the consequent loss of purchasing power, which causes nearly 9% of families is in a situation of default”. More recurrently, Argentinians find in these entities a single alternative to face current expenses (food, rent, services) or emergency situations of all kinds.
That is why the project advances along three axes: greater state control, transparency in the cost of credit and user protection from abuse.
Mandatory registration and control of the BCRA
One of the central changes is that All these entities must register in a registry under the orbit of the Central Bank of the Argentine Republic.
The BCRA will play a more active role in the supervision, auditing and control of the sector, deepening a regulatory line that had already begun in recent years.
For fintech companies, this implies a leap: from a more flexible scheme to one with greater regulatory demands.
Rates: limits and end of the “fine print”
One of the most sensitive points of the project is interest rates.
The initiative establishes that:
- Rates may not exceed the limits of the Credit Card Law
- Usury could be set if these limits are exceeded
- It will be mandatory to inform the Total Financial Cost (CFT) complete
This implies a strong change in the way in which credits are communicated today.
Many platforms report nominal rates (TNA or TEA), but not the total cost with commissions and insurance, which generates user confusion.
The project seeks to eliminate that “fine print” and force the real cost to be shown from the beginning.
End of immediate credit: direct impact on fintech
One of the articles that generates the most noise in the sector is the one that prohibits automatic credits without prior evaluation.
That is, the loans would be terminated “in one click.”
The rule establishes that the client’s solvency must be analyzed before granting credit and that the Total debt may not exceed 30% of your income.
This aims to reduce over-indebtedness, a growing problem in high inflation contexts.
But it also has a full impact on the business model of many apps, which base their differential on the speed and almost instant approval.
Apps under new rules: human attention and more security
The project also introduces specific obligations for digital platforms:
- Customer service with human intervention
- Physical spaces of claim
- Identity validation with biometrics
- Full responsibility for technical failures
The latter is key: if there are errors in the system, payment problems or app crashes, the responsibility will fall exclusively on the company.
In a 100% digital ecosystem, the standard of demand rises.
Collections: limits to harassment
Another relevant chapter is that of extrajudicial collections.
The project establishes strict rules:
- Maximum of two calls per day
- Only between 9 and 18
- It is prohibited to use hidden numbers
- Contacting family members or employers is prohibited
- Threats or judicial simulations prohibited
Additionally, companies will be responsible for the practices of the collection studies they hire.
The measure aims to eradicate aggressive practices that are common in the market today.
Fines, sanctions and risk for the business
The Central Bank of the Argentine Republic will have broad powers to sanction non-compliance:
- Financial fines
- Suspension of operations
- Disqualification of directors
This introduces a specific risk for the fintech sector, which will have to adapt its processes if the law advances.
A debate that has just begun
The project was presented by the opposition and opens a debate that combines regulation, innovation and consumption.
For its authors, the initiative “is part of the State’s obligation to balance consumer relations, correct existing asymmetries and guarantee that access to credit does not become a mechanism of exploitation. As the doctrine has repeatedly maintained, contractual freedom cannot be invoked to legitimize situations of abuse, especially when fundamental rights are compromised.”
Today we have, on the one hand, platforms such as Mercado Pago or Ualá that expanded access to credit and energized the digital economy. And, on the other hand, criticism is growing for high rates, lack of transparency and aggressive collection practices.
In Latin America, the trend is clear: regulate non-bank credit without stopping innovation. Argentina now joins that debate.
The unknown is how it will impact a sector that has become key for millions of users… and that, until now, played with looser rules than the traditional banking system.
