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  • Writer's pictureThe San Juan Daily Star

Ayuda Legal: OCIF’s loss of accreditation not to ‘be taken lightly’

The Office of the Commissioner of Financial Institutions, as established by Law 4 of 1985, is the government agency responsible for supervising financial institutions operating in Puerto Rico.

By The Star Staff

The organization Ayuda Legal raised an alarm about the Office of the Commissioner of Financial Institutions (OCIF by its Spanish acronym), which evaluates the solvency of banks, losing the accreditation of the Conference of State Bank Supervisors (CSBS).

The Center for Investigative Journalism revealed the information last week that OCIF had kept under wraps.

The CSBS oversees the procedures and operations of state agencies that regulate banking institutions in the United States.

“In a country where the lack of commitment to accountability and transparency is the central axis of public policy, this news should not be taken lightly,” Ayuda Legal said.

The OCIF, as established by Law 4 of 1985, is the government agency responsible for supervising financial institutions operating in Puerto Rico. Enforcing the Bank of Puerto Rico Law and the Mortgage Institutions Law is among its tasks. OCIF is in charge of investigating complaints, imposing administrative fines for violations of the laws, carrying out studies and investigations on matters that affect any branch of the banking industry and requiring financial institutions to comply with examinations.

The OCIF investigates the bank’s conditions and resources, the way it conducts and manages its affairs, its directors’ actions, the investment of its funds, and the safety and prudence of its administration. The examinations evaluate guarantees the bank has given to ensure compliance with the obligations contracted and whether the law has been complied with in the administration of its affairs.

“As the OCIF itself acknowledges, deficiencies in its examination program of financial institutions caused the loss of accreditation before the CSBS. The severe budget reduction, the lack of trained personnel, and the reduction of its financial education program, demonstrate the government’s unwillingness to allocate resources to strengthen the agency,” Ayuda Legal said. “The CSBS recommended, as part of its audit of the OCIF, that it should increase the number of examiners and improve their salary conditions and training opportunities.”

“Since 2020, Ayuda Legal Puerto Rico (ALPR) has called on the OCIF to recognize and exercise its supervisory role, particularly in the face of the mortgage crisis that the country is experiencing,” Ayuda Legal continued. “ALPR even requested examinations from financial institutions, aimed at evaluating the proper management of loss mitigation processes in mortgage loans.”

“Many times, OCIF has taken refuge in the fact that the examinations and bank control processes are confidential. These are excuses [to avoid] having to release information about non-compliance,” the organization said. “This is not acceptable, even less so when serious accusations against banks have plagued the last few months. Half-hearted control, insufficient personnel to deal with complaints, poor management of examination processes, among other failures, result in violations of consumer rights, non-compliance with applicable legislation, and other practices that directly affect the financial health of people who live in Puerto Rico.”

“This fosters an ecosystem of economic violence against the homes and lives of thousands of families,” the group said, adding that demanding accountability from OCIF is essential to achieve justice and equity.

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