Supreme Court Allows Central Bank to Revoke Permits of Popular Financial Societies

Mexico's Supreme Court of Justice of the Nation (SCJN) has affirmed the constitutionality of a measure allowing the National Banking and Securities Commission (CNBV) to revoke the operating permits of Popular Financial Societies (SOFIPOs) for failing to meet capital requirements. The ruling, stemming from an appeal project led by Minister Yasmín Esquivel Mossa, validates Article 37, Section V, of the Law on Popular Savings and Credit.

Minister Esquivel Mossa explained that this authority aligns with constitutional principles, empowering the CNBV as a specialized technical body to oversee and regulate Mexico's financial system. The court determined that granting the CNBV the power to revoke authorizations for non-compliance with capitalization mandates is constitutionally sound. This ensures that financial entities maintain sufficient own resources to absorb potential losses from inherent operational risks, particularly credit and market risks.

The SCJN's decision not only upholds the constitutional order but also safeguards citizens who entrust their savings and seek credit from SOFIPOs. These institutions were established to serve sectors that traditionally lack access to conventional banking services. By ensuring SOFIPOs maintain adequate capitalization, the ruling aims to protect depositors and borrowers, reinforcing the stability and integrity of the financial system.