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The recently approved bill by Chile's congress that will create a new consumer protection agency for financial services consumers could turn into an excessive regulatory burden for banks, local daily La Segunda reported Banco de Chile (NYSE: BCH) board member Fernando Concha as saying.
The bill is waiting to be signed into law by President Sebastián Piñera and the new entity will be called Sernac Financiero.
Concha said the challenge for the new agency will be to find "middle ground" as excessive regulation would hurt growth of the financial system.
The Sernac Financiero initiative was the result of a widespread feeling among Chileans that banks and other financial service providers were not fully transparent in terms of the final cost that their clients had to pay for loans and other financial products and services. The agency will review all consumer loan and credit card contracts to guarantee that no information is being withheld from clients.