A bill regulating the Philippine credit card industry by granting the Bangko Sentral ng Pilipinas (BSP) supervisory powers over all credit card issuers, acquirers and transactions was approved on third and final reading in the Senate on Monday.
Senator Sergio Osmeña said House Bill No. 5417 or the proposed Philippine Credit Card Industry Regulation Law aims to protect the rights and interests of credit card holders against excessive charges and harassment from collection agents.
“There is no express provision in the law that would protect the rights and interest of financial consumers which includes credit card holders. 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,” Osmeña, sponsor of the bill and chairman of the Senate committee on banks, financial institutions and currencies, said in a statement.
He said BSP data showed that consumer complaints against credit cards companies had increased over the years. These include excessive charges, unauthorized fees, undisclosed charges, unfair collection and harassment practices by credit card collection agents.
Furthermore, credit card industry records also showed that the number of active credit cards grew by 25.5 percent, from 6.584 million credit cards in 2009 to 8.268 million in 2014, said the senator.
Aside from granting the BSP supervisory powers, Osmeña said it also mandates information confidentiality and requires credit card issuers to establish a Consumer Assistance Unit within its organization. It also defines “appropriate collection practices” and holds the credit card issuer responsible for all the actions of its collection agents.
“The end game for the bill is to be a catalyst that would establish a national policy on responsible credit services by the card issuers on the one hand and responsible debt management for the card holders on the other,” he said.
Under the proposed measure, if the due date for a credit card falls on a weekend or a regular national holiday, the card payment due date is automatically moved to the next business day.
Osmeña said violations of any provisions of the proposed measure will be imprisonment of two to 10 years or a fine of P50,000 to P200,000 or both, at the discretion of the court.
“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,” he further said.
Senate President Franklin Drilon said that such bill was among the “much-needed” reforms the Senate wants to introduce to the Philippine banking and lending sector, with the intention of improving the country’s overall business climate and upholding consumer rights and welfare. RAM
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