Congress asked to expedite passage of Financial Consumer Protection Act

The central bank is urging lawmakers to expedite the passage of a law that will protect the interests of financial consumers due to the evolving landscape and rapid advancements brought about by the digitalization of transactions in the country.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said it and other financial regulators were closely coordinating with the Senate for the immediate passage of the proposed Financial Consumer Protection Act.

Other regulators supporting this move include the Securities and Exchange Commission, Insurance Commission and the Cooperative Development Authority.

“The Financial Consumer Protection Act is a timely reform amid the growing complexity of financial products and services in the country and is aligned with BSP’s commitment to promote digitalization and protect financial consumer welfare,” BSP Governor Benjamin Diokno said.

The proposed Financial Consumer Protection Act covers all financial products and services; institutionalizes consumer protection standards and promotes transparent and responsible pricing, fair and respectful treatment of clients privacy and client data protection.

Authority to make rules

The proposed law also gives financial regulators the authority to issue rules and regulations that will ensure consumer protection; conduct hearings on consumer complaints; and enforce action such as restriction on the imposition of excessive or unreasonable interests, fees or charges.

It also requires financial service providers to install monitoring systems to ensure compliance with the law and identify risks inherent in their operations.

“As the BSP promotes the digitalization of financial services, we also support the passage of the law that will provide our consumers with legal protection as they explore the opportunities and face risks associated with the evolving financial landscape,” he added.

Trust in the system

In June of last year, the House of Representatives approved on third and final reading House Bill No. 6768, or “An Act Affording More Protection to Consumers of Financial Products and Services,” which was transmitted to the Senate the next day.

Senate Bill Nos. 60, 534, 1329, 1335, 1739 and 2287 have also been filed and referred to the Senate committee on banks, financial institutions and currencies. A subcommittee headed by Sen. Sherwin Gatchalian has been designated to deliberate on these bills.

“The legislative measure empowers financial regulators to take necessary actions against financial entities performing acts that may undermine consumer welfare and provides a redress mechanism,” Diokno said. “This is seen to further strengthen the trust and confidence of the public in the financial system.”