Peru's banking regulator SBS has rejected a proposal by a congressional committee to establish a new entity to supervise the country's savings and loans cooperatives, and microfinance institutions, El Comercio reported.
According to SBS, the measure would create more bureaucracy and not facilitate the oversight of savings and loan cooperatives, a sector that has been the subject of an intense discussion in Congress after the financial watchdog pinpointed it as possible weak link in anti-money laundering control and urged lawmakers to bring the sector under SBS control.
Describing the proposal as "total nonsense," Óscar Basso, deputy superintendent of SBS, also criticized the committee for suggesting the new regulatory body would operate under a five-year mandate, which he sees as a length of a political office. "We are calling for a technical post. It takes us between 11 and 14 years to train a superintendent at the SBS, due to level of the specialization of the supervision."
Meanwhile, Sergio Espinosa, head of the SBS' Financial Intelligence Unit, said bringing the cooperatives under the banking regulator's control would protect members and allow the sector's sustainable growth, according to a separate El Comercio report. In addition, he said SBS already has the necessary internal coordination and an infrastructure with experience to take on the challenge of supervising the savings and loans cooperatives.
In late May, SBS chief Socorro Heysen urged Congress to give the regulator supervisory authority over the cooperatives, to help Peru avoid placement on an international list of countries that are deemed to have serious deficiencies in anti-money laundering controls and keep its investment risk rating from falling.
A mission from the Latin American Financial Action Task Force was in Peru to evaluate the country's progress in improving anti-money laundering protocols. That mission concluded June 1, but the task force will publish its report on Peru in December, Espinosa told the publication.
According to data from industry association Fenacrep, there are currently 671 savings and loan cooperatives in Peru, 520 of which are not supervised by any government agency.
After intense debate on May 24, Congress sent the bill, that will determine if SBS' powers will be extended, back to the committee stage for further analysis.
