Article 48 of the State Ordinance on the Supervision of the Credit System prohibits the granting of credits or other forms of financing to the public in the course of a business. The CBA may grant dispensation from this prohibition. In this regard, the CBA has issued a dispensation policy regarding pawnshops operating in Aruba and guidelines on the conduct of the business of pawnshops / compra y benta companies. Before granting a dispensation to a pawn shop, the CBA will assess whether the applicant is able to comply with the conditions summed up in the dispensation policy. The main conditions concern the company's minimum equity and funding, the maximum aggregate outstanding amount per individual customer, the fitness and properness of (qualifying) shareholders and key persons (e.g. members of the Management and Supervisory Board), compliance with the guidelines on the conduct of the business.
Pawnshops already active in Aruba as of April 1, 2012, are granted a transitional period of one year (ending on March 31, 2013) to amend their processes and systems in order to be able to meet the conditions of the dispensation policy and to submit a dispensation request. Pawnshops that do not file a dispensation request will have to cease their activities as of March 31, 2013.
Publication of the effective interest rate
As of April 1, 2012, all pawnshops must comply with the Directive on the publication of effective interest rate on consumer loans. This directive prescribes the requirements when advertising consumer loan products, as well as the information to be included in the pawn agreement with the client.
Pawn shops must comply with the requirements of the dispensation policy and the guidelines on the conduct of the business on an ongoing basis. Pawn shops must also comply with the State Ordinance on the Prevention and Combating Money Laundering and Terrorist Financing (AML/CFT State Ordinance) and the financial sanctions regulations. In this respect, pawn shops must take duly notice of the Financial Action Task Force (FATF) and Caribbean Financial Action Task force (CFATF) warning lists, periodically circulated by the CBA.
The CBA has been granted supervisory powers and, in case of non-compliance, the CBA has a wide range of tools available to enforce compliance.