Economic Development Bank backs expanding consumer lending powers
The head of the Puerto Rico Economic Development Bank (BDE, in Spanish) is backing legislation that would expand the institution’s role into consumer lending, including mortgages, credit cards and personal loans — marking a shift from its traditional focus on commercial loans.
During a public hearing before the House Committee on Banking, Insurance and Commerce, BDE President Carmen A. Vega-Fournier voiced support for House Bill 701, which seeks to modernize the bank’s functions to better serve residents with limited access to traditional financial services.
“Times change, and with that, it is imperative that the BDE also transform itself so that it can offer other types of financing to its clients and potential clients,” Vega-Fournier said. “This is with the aim of continuing to promote the island’s economic development.”
The bill would allow the BDE to target underserved sectors, such as young professionals and university graduates, with fixed-rate mortgages at around 6% and credit cards at a 13.95% fixed rate. Vega-Fournier said $40 million has been set aside for a mortgage pilot program, while $249 million will remain allocated to commercial lending.
But the proposed expansion has drawn criticism from the private sector. Zoimé Álvarez-Rubio, executive vice president of the Puerto Rico Bankers Association, warned that the measure could move the bank away from its core purpose.
“This project, far from representing a modernization of the Economic Development Bank, significantly distorts its fundamental purpose,” she said. “The effect of this proposed measure is to dangerously distance the BDE from its fundamental role as the island’s development bank.”
Francisco Rodríguez-Castro, former BDE president and now president of Birling Capital Advisors, also raised concerns. He said the plan could place new pressure on government finances, citing an internal analysis projecting commitments of more than $2.6 billion. He also warned of similarities to the now-defunct Government Development Bank, which collapsed amid lending mismanagement and oversight failures.
In response, Vega-Fournier said the BDE is already coordinating with the Puerto Rico Housing Finance Authority and credit card companies to ensure responsible implementation.
“We must evolve. If we continue doing the same thing, we’ll get the same results. And that, in the current economic climate, is unacceptable,” she said.
Committee Chair Rep. Jorge Navarro-Suárez, NPP-Guaynabo, expressed support for the measure’s goals.
“What we are seeking here is to expand our powers to serve a clientele that is being displaced by various factors in private banking, both young people and other populations,” he said.
If enacted, House Bill 701 would broaden the BDE’s mandate to expand credit access and align public financing tools with current market realities.
