CMF Issues Rule on ESG Disclosures and Tool to Compare Mortgage Loans
The Commission for the Financial Market (CMF) in Chile released its new mortgage loan simulator as well as the General Rule No. 461, which incorporates sustainability and corporate governance issues in the annual reports of supervised financial institutions. The rule aims to ensure that supervised entities report their policies, practices, and goals adopted with respect to the environmental, social and governance (ESG) matters. The rule applies to entities such as banks, insurance companies, issuers of publicly offered securities, general fund managers, and stock exchanges. CMF also published a regulatory report that evaluates the impact of the new rule, along with the frequently asked questions (FAQ), a brochure, and a presentation on the new rule.
The mortgage loan simulator from CMF allows users to quote and compare the costs of housing loans at the supervised entities—for a housing loan of up to UF 20,000 (UF refers to the Chilean unit of account). To ensure comparability, the simulation uses offers of non-endorsable mortgage loans (entities finance the loan with their own resources and it cannot be transferred to third parties) calculated in the Chilean unit of account (UF) with a fixed interest rate. On input of the information on the amount to be requested and the payment terms, users can compare interest rates, monthly installment values, and mandatory insurance costs among financial institutions that grant a particular type of loan. Reported rates apply to a standard product with the following features:
- The loan amount equals 75% of the property value.
- The property to be financed is in the Santiago Metropolitan Area.
- In the case of insurance (fire, or fire plus earthquake), it is assumed that the property's full appraisal value, minus the land, is insured.
- The interest rate is expressed annually, in arrears, and on a 360-day basis.
To use the tool, people must complete the simulator information by entering the amount in the UF they request (with a maximum of UF 20,000) and the payment term. The provided results are strictly for reference and do not constitute an analysis of the credit score of a user. Before granting a loan, each financial institution must evaluate the credit risk of its clients. Therefore, interested parties should consult with each institution directly to learn about the conditions and specific characteristics of financial products.
Related Links (in English and Spanish)
- Press Release on Rule No. 461
- General Rule No. 461 (PDF)
- Impact of General Rule (PDF)
- FAQ on General Rule (PDF)
- Press Release on Loan Simulator
Keywords: Americas, Chile, Banking, Insurance, Securities, Disclosures, ESG, Annual Report, FAQ, Lending, Credit Risk, Governance, Mortgage Lending, Consumer Lending, CMF
Featured Experts
Hasan Cerhozi
Hasan leads Moody’s Analytics ESG methodology development. He is expert on carbon transition, nature related risks and is a guest lecturer at ESSEC Business school on sustainable finance.
James Partridge
Credit analytics expert helping clients understand, develop, and implement credit models for origination, monitoring, and regulatory reporting.
Previous Article
BOG Revises Risk Management Directive, Proposes Governance DirectiveRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.