On November 8 the MORENA party, headed by President-elect Andrés Manuel López Obrador (AMLO), reportedly presented a proposal to stop banks from charging certain commissions. The bill would ban financial entities from charging clients for checking their balances, withdrawing cash, and requesting past bank statements among other things. The bill would also require the Bank of Mexico to create a plan to progressively lower bank transfers commissions. Reports indicate that as a result of the proposal, Mexico’s S&P/MBV IPC, the index of 35 stocks listing on the Mexican Stock Exchange, reportedly fell 5.8 percent, its biggest one-day loss in more than seven years. On November 9, AMLO declared that he does not plan to modify the legal framework of the banking system, at least during the first three years of his presidency. However, he added that while he is not behind the proposal, political parties at Congress have the right to propose bills and he will respect the division of powers accordingly.
Taking into account that MORENA and left-leaning partners have a solid majority in both houses of Congress, concerns in the banking sector are warranted, especially given AMLO’s appeal as a populist willing to back initiatives perceived to undermine corporate interests. In this sense, although AMLO sent a conciliatory message following the negative reaction in the market, he could potentially be swayed to support lawmakers seeking to regulate banking commissions further. That said, the debate concerning banking fees will likely underscore ideological differences within MORENA, which is composed of social liberals, economic nationalists, and religious conservatives. While not yet in power, thus far AMLO has kept these divisions frozen by adopting ambiguous stances on contentious issues such as economic liberalization, focusing instead on addressing corruption. If differences on economic policies surge during AMLO’s first months as president, uncertainty surrounding his stance on contemptuous issues could trigger further backlash at the markets.