BSP data showed that consumer complaints against credit cards companies had increased over the years, according to Senator Sergio Osmeña III, sponsor of the bill.
He said these include excessive charges, unauthorized fees, undisclosed charges, unfair collection and harassment practices by credit card collection agents.
Industry records showed that the number of active credit cards grew by 25.5 percent, from 6.584 million in 2009 to 8.268 million in 2014, Osmeña, chairman of the committee on banks, financial institutions, and currencies, said.
“There has been persistent clamor from the public for us legislators to take proactive action towards protecting the consumers from potential credit card excesses while nurturing the economic benefits from the same,” he said.
The proposed measure reinforces the automatic adjustment of due dates that fall on a weekend or a regular national holiday to the next business day.
Violating any provisions of the proposed Philippine Credit Card Industry Regulation Law will be penalized by an imprisonment of two to 10 years or a fine of P50,000 to P200,000 or both, at the discretion of the court, Osmeña noted.
“We hope it inspires financial discipline at the micro-level and redound to the benefit of all in the long-haul. We have the collective responsibility to keep our credit market to operate in a safe and sound manner, and a legislative intervention is urgently needed to get our nation started towards this path of financial enlightenment and discipline,” the senator said
The bill is among the “much-needed” reforms the Senate wants to introduce to the country’s banking and lending sector, with the intention of improving the overall business climate and upholding consumer rights and welfare, Senate President Franklin Drilon said.
The original version of HB 5417 was passed by the House of Representatives in February 2015. The Senate amended some provisions of the bill.
The bill garnered all of the 16 votes from the senators who constituted the quorum.
An article by Ruth Abbey Gita for the Sun Star published on February 1 said that House Bill 5417, which was approved by the Senate on its third and final reading, garnered all of the 16 votes from the senators who constituted the quorum.
Among the Senate’s amendments includes giving authority to the Bangko Sentral ng Pilipinas (BSP) to regulate the local credit card industry. The regulation will include the issuance of the rules of conduct, the establishment of standards, and ensuring compliance with these regulations.
The BSP is also given the authority to limit and prohibit the charging of yearly membership fees for credit card holders under the proposed law.
An article by Amita O. Legaspi for GMA News published on February 1 said that the Credit Card Association of the Philippines (CCAP) expressed disagreement with the setting of interest charge limits on November 2015.
CCAP disagreement arises over fears that credit companies would implement tighter credit card requirements in order to offset the risks involved with such financial services.
The group added that around 10 to 15% of the loan portfolios of large banks are exposed to credit card services, with an estimated P130 billion worth of receivables.
The bill also mandates the disclosure of essential information to credit card holders and potential card owners, which includes “the finance charges for unpaid amounts after due date, the periodic (annual/monthly) interest rate, the default late payment fees, as well as other dues including the membership or renewal fees, processing fees and over-the-limit fees.”
Source:
Kicker Daily
Interaksyon
GMA News
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