Congress Approves Financial “Right to Be Forgotten” as pressure mounts for a Presidential Veto
Martín Mois, partner at the Aninat firm, believes this provision creates legal friction: “It does not account for record-retention obligations set out in special laws. It also conflicts with Law No. 21,680 (Redec), because this broad prohibition covers not only disclosing the data, but also using it, which undermines the credit assessment that the same law expressly authorizes”.
The Reconstruction bill was one step away from clearing Congress, with only one provision still pending review in the joint committee. Now, however, voices within the ruling coalition and technical circles are increasingly concerned about the “damage control” the Executive will need to carry out regarding provisions that remained in the text and have been sharply criticized for their “unintended effects”.
One such case is the article banning anatocism (compound interest on interest). The Central Bank and the Comisión para el Mercado Financiero (CMF, Financial Market Commission) have conducted an extensive analysis of its negative consequences for system users. But there is another provision: in the bill’s third legislative stage, the ratification of the financial “right to be forgotten” was also added — a measure introduced in the Senate that seeks to eliminate records of debts more than five years old.
On this point, the Central Bank has said it is “analyzing” possible implications, but the CMF sent an extensive report broadly concluding that “in practice, this will result in the extinguishment of debts”.
Assessment and Costs
Among the eight points addressed in the CMF’s memo on the “right to be forgotten,” it highlights at least the negative effects for users. The most general point notes that eliminating the records would prevent creditors from managing collections, “leading to higher costs for the system.” It also stresses that “since there would be no internal debt records (who owes what and how much), the debt would simply be extinguished”.
The CMF also raises a regulatory point: limits on access to extinguished debts are already governed under the Registro de Deuda Consolidada (Redec, Consolidated Debt Registry), which came into force in April. Under this tool, which centralizes commercial information, access to such data must be authorized, may only be used for specific purposes, and cannot cover obligations extinguished more than five years ago.
In that sense, the problem with the “right to be forgotten” lies in its broad scope: it calls for eliminating information from internal records altogether. Martín Mois, partner at the Aninat firm, believes this provision creates legal friction: “It does not account for record-retention obligations set out in special laws. It also conflicts with Law No. 21,680 (Redec), because this broad prohibition covers not only disclosing the data, but also using it, which undermines the credit assessment that the same law expressly authorizes”.
Read the full article from El Mercurio.
