A credit union doesn't collect the same way a bank does, and not because of culture or size: because the regulatory framework that governs it is different. Anyone managing a credit union's portfolio without understanding that difference makes mistakes the institution later pays for before its regulator.
This is what the regulations require, and where they depart from the rules for banks.
Portfolio rating comes before everything else
In the popular and solidarity financial sector, the rating of credit operations is governed by the Board's Codification of Resolutions (Codificación de Resoluciones de la Junta), Book I, Title II, Chapter XXXVI, in its rule on credit risk management. The criterion is delinquency, cross-referenced with the credit segment.
The scale runs from A (normal) to E (loss), through B (potential), C (deficient) and D (doubtful collection). And there is a calculation detail worth being clear on, introduced by the February 2025 amendment:
“Days past due shall be counted from the day following the due date of the installment of the credit operation or obligation when there is total or partial non-payment of the agreed installment.”
What matters for collections is that days don't mean the same thing in every segment. Microcredit deteriorates much faster than consumer credit: a microcredit loan enters category D at 181 days past due, while a consumer loan reaches that same category only after 270. Managing both on the same calendar means letting microcredit fall apart on its own.
In addition, credit unions in segments 4 and 5 must carry out ratings and set up provisions on a monthly basis. That frequency sets the real pace collection work has to keep.
Write-offs: the difference from banks that almost no one knows
Here is a point that is often misquoted, and it's worth stating precisely.
The general rule is in article 207 of the Organic Monetary and Financial Code (Código Orgánico Monetario y Financiero), which applies to all entities of the national financial system, credit unions included: the delinquency period for write-off is set by the Board and “may not exceed three years”, and before the write-off the obligation must be provisioned at 100% of its book value.
What does not apply to credit unions is the regulatory chapter that implements write-offs for banks. That chapter—which sets mandatory write-off at three years and the special 180-day period for scoring-rated consumer loans and microloans—is expressly addressed to entities supervised by the Superintendency of Banks (Superintendencia de Bancos).
Practical takeaway: do not apply a bank’s write-off schedule to a credit union. What governs is the ceiling in Article 207 and whatever the Board has established for the sector; assuming the 180-day banking period for scoring-rated loans is a common mistake with accounting consequences.
And as across all of banking, the write-off does not close the case. Article 207 itself states that it “does not release it from continuing to collect the sums owed, nor does it relieve the borrower of their status as a delinquent debtor”.
Outsourcing collections: what the rules require
A credit union cannot hand its portfolio to just anyone. Article 163 of the Organic Monetary and Financial Code (Código Orgánico Monetario y Financiero) expressly lists collections among the auxiliary services of the financial system, which means the provider must be qualified by the SEPS (Superintendency of Popular and Solidarity Economy).
And the supervisory rule currently in force for those companies sets out something every credit union should keep in mind before signing:
“Auxiliary service organizations or companies, jointly with the contracting entity, are liable for the conduct of all their employees or agents who interact with members, clients and users.”
Joint liability. If the external agent mistreats a member, the credit union is liable too. That is why the contract must include conduct standards, certified training and audit rights—not just a commission.
The same rule requires the auxiliary company to safeguard “the databases and non-public data provided by the contracting entity in a complete and secure manner”. And it adds a limit worth knowing: auxiliary services do not include the management, purchase or sale of portfolios. You can outsource collection activity; you cannot use that route to assign the portfolio.
Member data
Under the Organic Personal Data Protection Law (Ley Orgánica de Protección de Datos Personales), the collections company that receives the credit union’s database is a data processor. Article 34 requires a written contract, use limited to the credit union’s instructions, a prohibition on using the data for other purposes or transferring it, and its return or destruction when the service ends.
There is also a time limit that directly affects collections: Article 28 provides that “under no circumstances may credit data relating to economic, financial, banking or commercial obligations be disclosed once five years have elapsed since the obligation to which they refer became due”.
How members may be contacted
The same limits apply as for any collection activity in Ecuador. Since the amendment published on February 11, 2022, Article 49 of the Organic Consumer Protection Law (Ley Orgánica de Defensa del Consumidor) prohibits contacting a debtor more than once a day through the same channel, before 7:00 a.m. or after 8:00 p.m., on weekends or holidays, or from an unidentifiable number. It also prohibits “communication for collection purposes with persons other than the debtor, co-debtor or guarantors”.
At a credit union this carries double weight: the debtor is not just any customer, but a member, with a voice in the general assembly and a relationship the institution wants to keep.
Collection fees
They are not a fee that can be set freely. The reports a credit union submits to the SEPS only accept as recovery expenses those “that are objectively determinable”; if they are not, the amount to be recorded is zero. In plain terms: they must correspond to real, documented collection actions, not an automatic charge for falling into arrears.
And under the extraordinary relief mechanisms established by the Board, the rule is categorical: “They shall not charge collection fees, legal costs or charges.”
What this means for collections
- The risk rating sets the schedule, and microloans require a different pace than consumer loans.
- The provider must be qualified by the SEPS. Ask for it in writing.
- The credit union is liable for how members are treated, even when a third party collects.
- The data is entrusted, with a contract, limits and return at the end.
- Fees must be documented, action by action.
How we approach it at FEXCOB
Our collections for savings and credit cooperatives starts with a portfolio audit and keeps every collection action traceable, precisely because in this sector the institution is liable for the agent’s conduct and must be able to prove it to its regulator.
We have been recovering portfolios in Ecuador, Colombia and Peru for more than twenty years, with our own team in each country.
You may also be interested in: the legal limits on contacting members · portfolio write-offs explained
Legal sources cited: Organic Monetary and Financial Code (Código Orgánico Monetario y Financiero), Articles 163 and 207 (current text, last amended June 4, 2026); Codification of Monetary, Financial, Securities and Insurance Resolutions (Codificación de Resoluciones Monetarias, Financieras, de Valores y Seguros), Book I, Title II, Chapter XXXVI (rule on credit risk management in savings and credit cooperatives), as amended by Resolution JPRF-F-2025-0139; supervisory rule for auxiliary service companies of the popular and solidarity financial sector (SEPS); Resolution JPRF-F-2024-0123; Organic Personal Data Protection Law (Ley Orgánica de Protección de Datos Personales), Articles 28 and 34; Organic Consumer Protection Law (Ley Orgánica de Defensa del Consumidor), Article 49, as amended by the law published in Official Gazette Supplement 1 of February 11, 2022.
This article is for information only and does not constitute legal advice for any specific case. Regulations for the popular and solidarity financial sector are updated frequently; always check the current version of the Codification.