Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Quezon City, Metro Manila
15" CONGRESS

HOUSE BILLNO.__36'75

Introduced by Representative Roman T. Romulo
Lone District of Pasig City

EXPLANATORY NOTE

Republic Act No. 8484 otherwise known as the Access Devices
Regulation Act of 1998, declared that, “The State recognizes the recent
advances in technology and the widespread use of access devices in commercial
transactions. Toward this end, the State shall protect the rights and define the
liabilities of parties in such commercial transactions by regulating the issuance
and use of access devices.”

This proposed bill seeks to support and establish fair and sound consumer
credit practices between consumers and credit card companies. This proposed
bill seeks to amend and strengthen the disclosure requirements under Republic
Act No. 8484 or the Access Devices Regulation Act of 1998 by requiring credit
card companies to include and disclose in the billing statement a reliable and
truthful computation of the penalties and charges that would accrue should the
consumer opt to pay below or at least the minimum amount due.

The use of credit card has evolved from merely for emergency spending
for lack of cash to enjoying it for convenience instead of having money around.
The use of credit card transcends any social class. However, its use must be
regulated in the manner that would encourage sound fiscal management in the
personal level and protect the credit card companies from overspending of the
consumers.

A consumer that is sufficiently informed will be able to manage his
finances well and hence, avoid overspending and being charged of a huge debt.
Further, the companies will be protected from doubts of overcharging as they
have fully disclosed and provided reliable and truthful computation of the
penalties and charges that would accrue should the consumer opt to pay below
or at least the minimum amount due. It would also result to a more disciplined
credit card user which would minimize the risk of credit card company losses
brought by unpaid bills.

For these reasons, the passage of this bill is earnestly sought

ho Fo—2

HON. ROMAN T. ROMULO


HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

15"" CONGRESS

HOUSE BILLNO.__ 3675

Introduced by Representative Roman T. Romulo
Lone District of Pasig City

AN ACT AMENDING SECTIONS 5 and 8 OF REPUBLIC ACT NO. 8484,
OTHERWISE KNOWN AS THE “ACCESS DEVICES REGULATION ACT OF
1998”, AND FOR OTHER PURPOSES.

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled.

Section 1. Section 5 of Republi
Devices Regulation Act of 199%

Act No. 8484, otherwise known as the “Access
is hereby amended to read as follows:

Sec. 5. Computations. — In addition to the foregoing, a
credit card issuer must, to the extent practicable, provide a
detailed explanation and a clear illustration of the manner by
which all charges and fees are computed.

Upon acceptance and activation of the credit card, every
billing statement shall contain clear and concise repayment
information that would apply to the outstanding balance of the
consumer placed in a conspicuous place and prominent location
on the billing statement. The repayment information shall also
include the following

1, the number of months (rounded to the nearest month)
that it would take to pay the entire amount of that
balance, if the consumer pays only the required
minimum monthly payments and if no further advances
are made;

2. the total cost to the consumer, including interest and
principal payments, of paying that balance in full, if the
consumer pays only the required minimum monthly
payments and if no further advances are made; and

3. the monthly payment amount that would be required for
the consumer to eliminate the outstanding balance in 36
months, if no further advances are made, and the total
cost to the consumer, including interest and principal
payments, of paying that balance in full if the consumer
pays the balance over 36 months.

Further, a written statement in the following form must be
printed in the billing statement: “Minimum Payment Warning


Making only the minimum payment will increase the amount of
interest you pay and the time it takes to repay your balance.”

Section 2. Section 8 of Republic Act No. 8484 is hereby amended to read as
follows:

Sec. 8. Failure to Disclose. — Credit card companies
which shall fail to disclose the information required under
Sections 4, 5 and 7 of this Act, after due notice and hearing,
shall be subject to suspension or cancellation of their authority
to issue credit cards by the Bangko Sentral ng Pilipinas,
Securities and Exchange Commission and such other
government agencies.

Further, any credit card company which shall fail to
disclose the information required under Section 5 of this Act in
the billing statement of a consumer, shall only be allowed to
impose a maximum of one percent (1%) per month or twelve
percent (12%) per annum for interest rates and -one percent
(1%) per month or twelve percent (12%) per annum for penalty
charges, without compounding, regardless of the interest rates
and penalty charges agreed upon in the contract between the
particular consumer and the credit card company.

Section 3. Implementing Rules and Regulations - Within ninety (90) days from
the effectivity of this Act, the Bangko Sentral ng Pilipinas, in coordination with the
Securities and Exchange Commission and such other government agencies,
shall promulgate the rules and regulations and prescribe the form and manner of
disclosure of repayment information to effectively implement the provisions of this
Act,

Section 3. Repealing Clause - All other laws, decrees, executive orders,
proclamations and administrative regulations, or parts thereof inconsistent
herewith are hereby repealed or modified accordingly

Section 4. Effectivity Clause - This Act shall take effect fifteen (15) days after its
publication in at least two (2) national newspapers of general circulation,

Approved