Republic of the Philippines
House of Representatives
Quezon City

FIFTEENTH CONGRESS

First Regular Session

COMMITTEE REPORT NO.
TS MAY 2011
Submitted by the Committee on Banks and Financial Intermediaries on

Re: House Bill No. 4655

Recommending its approval in substitution of House Bill No. 3675,

Sponsor: Representatives Sergio A. F. Apostol and Roman T. Romulo

Mr. Speaker :

The Committee on Banks and Financial Intermediaries to which was referred House Bill No.
3675 introduced by Representative Roman T, Romulo, entitled:

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
4655

has considered the same and recommends that the attached House Bill No.
entitled:

AN ACT
STRENGTHENING THE TRANSPARENCY AND DISCLOSURE REQUIREMENTS IN THE USE OF
CREDIT CARD FACILITIES, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 8484,
OTHERWISE KNOWN AS THE “ACCESS DEVICES REGULATION ACT OF 1998”

be approved in substitution of House Bill No. 3675, with Representatives Roman T. Romulo,
Sergio A. F. Apostol, Julieta R, Cortuna and Jeci A. tapuz as authors thereof.

Respectfully submitted,

SERGIO. F, APOSTOL
Chaipfian

The HONORABLE SPEAKER
HOUSE OF REPRESENTATIVES
Quezon City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
FIFTEENTH CONGRESS

First Regular Session

HOUSE BLLNO.__ 4655

Introduced by Representatives Roman T, Romulo, Sergio A. F. Apostol, Julieta R.
Cortuna and Jeci A. Lapuz

AN ACT
STRENGTHENING THE TRANSPARENCY AND DISCLOSURE REQUIREMENTS IN. THE USE OF
CREDIT CARD FACILITIES, AMENDING FOR THE PURPOSE REPUBLIC ACT NO.
8484, OTHERWISE KNOWN AS THE “ACCESS DEVICES REGULATION ACT OF 1998”

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:
Section 1. Section § of Republic Act No. 8484, otherwise known as the “Access
Devices Regulation Act of 1998,” 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 AND ITS EQUIVALENT DOCUMENT SHALL CONTAIN
CLEAR AND CONCISE REPAYMENT INFORMATION THAT WOULD APPLY TO

10
cn
12
13
14
15

THE OUTSTANDING BALANCE OF THE CONSUMER PLACED IN A

CONSPICUOUS PLACE AND PROMINENT LOCATION ON THE BILLING

STATEMENT OR ITS EQUIVALENT DOCUMENT. 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


10
un
12
cy
14
15
16
7
18
19
20
a
22
23
24
2s
26
ra
28
29
30
31

32

MINIMUM MONTHLY PAYMENTS AND {F 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;

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

4, THE TOTAL COST TO THE CONSUMER, INCLUDING INTEREST AND.
PRINCIPAL PAYMENTS, OF PAYING THAT BALANCE |N FULL IF THE
CONSUMER PAYS THE BALANCE OVER 36 MONTHS.

“FURTHERMORE, A WRITTEN STATEMENT IN THE FOLLOWING FORM

MUST BE PRINTED iN THE BILLING STATEMENT OR ITS EQUIVALENT
DOCUMENT: “WARNING: MAKING THE MINIMUM PAYMENT ONLY OR ANY
AMOUNT LESS THAN THE TOTAL AMOUNT DUE FOR THE BILLING
CYCLE/PERIOD WILL INCREASE THE AMOUNT OF INTEREST AND OTHER
CHARGES YOU PAY AND THE TIME IT TAKES TO REPAY YOUR BALANCE.
“CREDIT CARD COMPANIES ARE GIVEN A PERIOD OF 120 DAYS FROM
THE DATE OF THE EFFECTIVITY OF THIS ACT TO IMPLEMENT THE REQUIRED
DISCLOSURE REQUIREMENT UNDER THIS SECTION.”
Section 2. Section 8 of the same Act is hereby amended ta 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.
“FURTHERMORE, 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 INTEREST GF ONE PERCENT (1%) PER MONTH OR

TWELVE PER CENT (12%) PER ANNUM , OR THE ACTUAL PREVAILING MARKET
2


10
L
W
13
4
as
16
wv
18
19
20
a
22
23
24
25
26
27
28
29
30

31

INTEREST RATE, WHICHEVER IS LOWER, 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 WHOSE BILLING STATEMENT DID NOT CONTAIN THE
APPROPRIATE DISCLOSURES AND THE CREDIT CARD COMPANY.

“FINALLY, ANY CREDIT CARD COMPANY WHICH SHALL FAIL TO
DISCLOSE THE (INFORMATION REQUIRED UNDER SECTION $ OF THIS ACT,
SHALL ALSO BE SUBJECT TO THE PENALTIES IMPOSED BY THE CONCERNED
REGULATORY AGENCIES PURSUANT TO THEIR RESPECTIVE CHARTERS OR
MANDATE.”

Sec. 3. A new Section 15-A is hereby added to the same Act to read as

“Sec, 15-A. AUTHORITY OVER ACCESS DEVICE ISSUERS. - THE
BANGKO SENTRAL NG PILIPINAS SHALL EXERCISE REGULATORY AND
SUPERVISORY POWERS OVER CREDIT CARD COMPANIES AND ELECTRONIC
MONEY ISSUERS, PURSUANT THERETO, THE BANGKO SENTRAL NG PILIPINAS
1S HEREBY AUTHORIZED TO;

1, REGULATE AND SUPERVISE THE OPERATIONS AND ACTIVITIES OF
CREDIT CARD COMPANIES;

2. ISSUE RULES AND REGULATIONS TO IMPLEMENT THE PROVISIONS
CONTAINED HEREIN CONCERNING CREDIT CARD COMPANIES;

3. REQUIRE FROM CREDIT CARD COMPANIES REPORTS OF
CONDITION AND SUCH OTHER REPORTS NECESSARY TO
DETERMINE COMPLIANCE WITH THE PROVISIONS OF THIS ACT AS
WELL AS THE IMPLEMENTING REGULATIONS THAT MAY BE
ISSUED PURSUANT THERETO;

4. EXAMINE CREDIT CARD COMPANIES WITHIN SUCH PERIOD AS
MAYBE — DEEMED NECESSARY BY THE MONETARY BOARD;

5. IMPOSE SUCH ADMINISTRATIVE SANCTIONS AS PROVIDED IN
SECTION 37 OF R.A. NO. 7653 OR THE NEW CENTRAL BANK ACT


10
uw
12
13
14
15
16
7
18
19
20
a
2
23
24
25
26
7
28
29
30

31

FOR VIOLATIONS OF THIS ACT AND REGULATIONS iSSUEO IN
PURSUANCE THERETO.
“OTHER COMPANIES {SSUING ACCESS DEVICES SHALL CONTINUE TO

BE REGULATED AND SUPERVISED BY THE SECURITIES AND EXCHANGE

COMMISSION.”

Sec. 4. Section 16 of the same Act is hereby amended to read as follows:

“Sec. 16. Reporting requirements. — All companies engaged in the
business of issuing access devices, including banks, financing companies and

other financial institutions issuing access devices, shall furnish annually, on or

before the 31st of March of the succeeding year, a report to the Credit Card

Association of the Philippines regarding access device frauds committed

against the holders of such entities in the preceding calendar year, for

consolidation and submission to the National Bureau of Investigation,
“(Notwithstanding this_ requirement, banks, financing companies-and
access devices shalt continue to-be-repulated and-supervised-by-the Bangko

Sentral ag filipinas while other companies issuing access devices hall

continueto_be_regulated-and_supervised_by_the Securities_and Exchange

Commission ]"

Sec. 5. Implementing Rules ond 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.

SEC. 6. Separabiitity Clause. - if any provision of this Act is held invalid, the other
provisions of this Act shall nat be affected thereby and shall continue in operation

Sec. 7. Repealing Clause. — All other laws, decrees, executive orders, proclamations
and administrative regulations, or parts thereof inconsistent herewith are hereby repealed
or modified accordingly.

Sec. 8. Efffectivity Date. — This Act shall take effect fifteen (15) days after its
publication in at least two (2) newspapers of general circulation.

Approved


Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City, Metro Ma

18" CONGRESS

HOUSE BILL NO. 3675

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

EXPLANATORY NOTE

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

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

The use of credit card has evolved from merely tor emergency spending
for lack of cash to enjoying it for convenience instead ef having money around.
The use of credit card transcends any social class. However, its use must be
feguiated in the manner that would encourage sound fiscal management in the
prsoral ievel and protect the credit card companies fram averspencing of the
carsumers

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
Fanner. the companies will be protected from doubts of overcharging as they
have fuily disclosed and provided reliable and truthful computation of the
Penalties and charges that would accrue should the consumer opt to pay below
oF 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 ey unpaid bills

Fer these reasons, the passage af this bill s eamestly sought

- Bow Bo

HON. ROMAN T. ROMULO-



HOUSE OF REPRESENTATIVES
‘Quezon City, Metro Manila

18" CONGRESS.

HOUSE BILL NO. 3675

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

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

Be 4 enacted by the Senate and House of Representatives of the Philippines in
Congress assernbiedt;

Section 1. Section 5 of Republic Act No. 8484, otherwise known as the “Access
Devices Regulation Act of 1998", is hereby amended to read as follows:

Sec. 5. Computations. — in addition 10 the foregoing,
credit card issuer must, to the extent practicable, provide a
detailed explanation and a clear illustration of the manner by
which all charges and foes are computed.

Upon acceptance and activation of the credit card, every
billing statement shall cantain clear and concise repayment
information that would apply to the outstanding batance of the
consumer placed in a conspicuaus 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 woult 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 pnncipal
payments, of paying that balance in full if the consumer

“pays the balance over 36 months. -

Further, @ written statement in the following form must be
Printed in the billing statement: “Minimum Payment Waming’



Making only the minimum payment will increase the amot
Interest you pay and the time it takes to repay your balance:

t of

Section 2. Section 8 of Republic Act No, 8484 is haraby amended to read as
faliows:

Sec. 8. Failure to Disclase.— 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 fait to
disclose the information required under Section 5 of this Act in
the billing statement of a consumer, shall only be atlowed 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, regardiess 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 ninely (90) days fron
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 twa (2) national newspapers of general circulation,

Approved


FACT SHEET

House Bill No. 4655
(Substitute bill to HB, No. 3675)

AMENDMENTS TO THE ACCESS DEVICES REGULATION ACT

Introduced by: REPRESENTATIVE ROMAN T, ROMULO

Committee Referral: COMMITTEE ON BANKS & FINANCIAL INTERMEDIARIES
Chairperson: REPRESENTATIVE SERGIO A. F. APOSTOL

OBJECTIVE

The bill seeks to establish fair and sound consumer credit practices between
consumers and credit card companies by strengthening the transparency and
disclosure requirements under Republic Act No, 8484, or the Access Devices
Regulation Act of 1998,

KEY PROVISIONS

a, Requiring the disclosure of information that will aid credit card users in making sound
decisions in relation to using credit card facilities, such as the length of time before a
consumer pays off the entire credit obtained if only the minimum amount is paid per
month; the total cost to be paid, including interest and principal, if only the minimum
amount shall be paid; and the necessary monthly payment that must be made by the
consumer to eliminate the outstanding balance in 36 months assuming no ather
purchases are made.

', Subjecting credit card companies that violate the disclosure requirement to the
penalties imposed by concerned regulatory agencies pursuant to their respective
charters or mandate.

© Granting the Bangko Sentral ng Pilipinas regulatory and supervisory powers over
credit card companies and electronic money issuers.

RELATED LAW

Republic Act No.8484 “Access Devices Regulation Act of 1998”
Republic Act. No. 7653 "The New Central Bank Act”


Committee on Banks and Hinancial Intermediaries

House of Representatives

22 March 2011

MEMORANDUM
FOR : THE HONORABLE SPEAKER
THRU : THE DEPUTY SECRETARY GENERAL
Committee Affairs Department
SUBSECT : SPOT REPORT ON THE MEETING OF THE COMMITTEE ON BANKS AND

FINANCIAL INTERMEDIARIES CONDUCTED ON 21 MARCH 2011, 9:30
A.M. AT THE RAMON V, MITRA CONFERENCE ROOM 1

The committee approved the proposed amendments of Congressman Roman Romulo to the
Access Devices Regulation Act of 1998, The amendments strengthened tne disclosure and
teansparency requirements in credit card transactions

The committee deferred the hearing on House Resolution No. 779, on the alleged
fraudulent practices of the ING Bank - Manita. Ms.Kristen Quintos, former managing
director of ING Bank, requested from the committee some time to gather all the necessary
documents that would give light to the matter at hand. She likewise promised the
committee that she would cooperate fully and attend the succeeding committee hearings
and exert all means to bring the other officers allegedly involved in the controversy to

appear before the committee,
font atest)

Ramon R. Federizon
Committee Secretary

Noted by:
Lina L. Mortega

Director Il, CTSS 1

Cc The Deputy Speaker, The Chairperson, Committee on Rules; The Secretary General; The
Executive Director, CAD; Deputy Executive Director, CAD; The Service Director, CASS