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3 Int'l. In-House Counsel J. 1345 (2009-2010)

handle is hein.journals/iihcj3 and id is 1 raw text is: International In-house Counsel Journal Vol. 3, No. 9, Autumn 2009, 1345-1350 The New Financial Reform and Competition Laws in Colombia: Key Points for Bank In-House Counsel ANTONIO JOSt NINEZ Country Legal and Compliance Head, Citibank, Colombia In a previous article I noted that Colombia was experiencing a deepening in state intervention in the activities of banks and other financial institutions, often inspired by consumer right concerns. New pieces of legislation, recently enacted, consolidate this trend and pose interesting challenges both for institutions and for in-house counsels. 1. Key points of the Financial Reform Act of 2009 (Law 1328 of July 15) and comments On July 15 President Alvaro Uribe enacted Law 1328, the financial reform act of 2009. This law took a very long time to pass through Congress and, although at times it seemed that it might be captured by radical initiatives, the result is generally fair-minded. Here I will refer to the main provisions of the law that increase banks' responsibilities to their clients and therefore impact the role of in-house counsels (which are mainly contained in title I of the Law -regime of financial consumer protection) and will indicate variables that are relevant for in-house counsels because they imply significant franchise or legal risks. This law also applies to other financial institutions, but for simplicity's sakes I will generally refer only to banks throughout this section. a. Definition of clients: Financial consumers do not include just clients, but also users and potential clients. This means that banks have extensive duties not just towards their clients and their users, but also to potential clients or users, which may mean anyone. b. Duties of banks: i. Banks must be duly diligent in providing their products and services at acceptable standards of security and quality in order to satisfy their customers' needs. This, which is named as the due diligence principle, may be read to imply that, in the event of a bank providing a product or service below acceptable standards of security or quality or failing to satisfy a customer's needs, there is a presumptive liability on the part of the bank so that no fault need to be proven against it for a duty of redress to arise. ii. Banks must provide true, sufficient, clear and timely information to their customers. Given that customers are not under a duty to learn about bank services and products, to compare various offerings and to choose what is most desirable for them (such activities constitute self-protective practices for consumers but are not mandatory), there is here a broad space for banks being found liable if the information they convey is not 1 Evolving Financial Consumer Protection Standards in Colombia: Issues for Legal Counsels, 565- 570 INTERNATIONAL IN-HOUSE COUNSEL JOURNAL, Vol. I, N0 4 (2008) ISSN 1754-0607 print/ISSN 1754-0607 online International In-house Counsel Journal