What Happened
The Asociación Bancaria de Panamá has requested a veto of Proyecto de Ley 388, a bill that would change how debt prescription is handled by banks and financial institutions. The association says the initiative would require removing from credit records information about unpaid debts after three years, including cases in which a client deliberately evaded the system and stopped making payments.
Background
Proyecto de Ley 388 proposes that data on certain unpaid obligations be removed from lenders’ credit records once three years have passed. The banking association has formally asked for the measure to be vetoed, arguing that the proposal would force deletion even when debtors concealed themselves to avoid repayment.
Why the Banking Association Opposes It
The Asociación Bancaria de Panamá’s request emphasizes the association’s concern that automatic removal of delinquency records after a three-year period — regardless of the circumstances that led to non-payment — would undermine the integrity of credit reporting. The association highlights the particular problem of cases in which clients hide from the system to escape obligations, which it says should not be treated the same as other resolved or time-barred debts.
Potential Impacts
If enacted as described in the bill, the change could have several practical effects. For lenders, the loss of historical repayment information could reduce the availability of reliable data to assess borrower risk, potentially leading banks and financial institutions to tighten lending standards or raise the cost of credit to compensate for higher uncertainty. For consumers, the removal of old negative information could provide relief to some borrowers and improve their access to new credit, but it could also create incentives for bad actors to delay or evade payments knowing negative records may be deleted after a fixed period.
What This Means
The Asociación Bancaria de Panamá’s veto request signals a clash between consumer-relief proposals and industry concerns about risk and credit transparency. The outcome will affect how lenders maintain credit histories and how consumers with past delinquencies regain access to financial services. Stakeholders on both sides will likely highlight the balance between protecting borrowers and preserving accurate credit information that supports lending in Panama.