A. M. 
Since the proper functioning of the financial system requires a legal framework that ensures its stability, the deputies of the Technology, Tourism and Investment Commission approved the creation of four new laws: Law of Cooperative Banks; Law of Cooperative Federations of Savings and Credit; Special Law of Savings and Credit Societies; and Law for the Stability of the Financial System and Guarantee of Deposits.
In addition, they endorsed the proposal of the Law for the Dissolution, Liquidation and Transfer of Functions of the Instituto Salvadoreño de Fomento Cooperativo (INSAFOCOOP).
After developing intense work days, the parliamentarians issued the five favorable opinions that will be presented in the legislative plenary to be discussed and, subsequently, endorsed if beneficial for the population.
In the past, these companies were not fully regulated because the Bank Law only supervises 10 private banks and two public banks; the Law of Savings and Credit Cooperative Federations only regulates six cooperative banks and four savings and credit societies and one federation.
The Commercial Code only supervises 54 cooperative societies, 47 credit unions and seven workers’ banks. In addition, 337 associations are regulated under the Cooperative Banking Law.
“They were not 100 percent regulated by the truthful entities. Therefore, we intend to have five legal frameworks that respond to the reality of technological advances and the financial rights of salvadorans”, commented the president of the commission, Congresswoman Dania González.
Law for the Stability of the Financial System and Guarantee of Deposits
According to what was stated in the working session, the purpose of this law is to regulate the preparation and execution of the processes of recovery and resolution of financial institutions and the powers of the Superintendencia del Sistema Financiero (SSF) as resolution authority, in order to protect the stability of the banking system, the continuity of essential financial services and the rights of the depositors of troubled institutions.
Savings and Credit Cooperative Federations Law
The transformation of the savings system in the country contemplates the creation of the Law of Savings and Credit Cooperative Federations, which aims at having financially sound, competitive, and functional institutions to meet the demands for financial services of the entire population.
Special Law for Savings and Credit Associations
To continue with the legal frameworks governing savings and credit associations, they also endorsed an opinion to implement a new regulation called Special Law for Savings and Credit Associations, which comprises 175 articles.
This measure will have a special regulatory framework to promote and strengthen these societies, which will allow them to be financially sound and competitive entities, promoting financial inclusion.
Law for the transfer of INSAFOCOOP’s functions to State institutions
The parliamentarians ruled in favor of the implementation of the Law for the Dissolution, Liquidation and Transfer of Functions of the Salvadoran Institute for Cooperative Development, which aims to decentralize the activities carried out by the Instituto Salvadoreño de Fomento Cooperativo (INSAFOCOOP) to other specialized entities that are part of the administrative organization of the State.
