■<a.
EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
S E N A T E  
s. No. 1 a  8 5
(£>ilur of I')c fiw rrctarf
20 
FEB 12 P2 :14
RECciVlL- t l ;
Introduced by SENATOR RAMON BONG REVILLA, 3R.
AN ACT
PROVIDING FOR THE FINANCIAL CONSUMER PROTECTION ACT
Consumer confidence and trust in the financial system promotes stability, 
growth, efficiency and innovation. However, with the rapid development of complex 
financial products coupled with the use of advanced technologies, consumer fraud, 
abuse and misconduct have increased. Time and again, we hear stories of consumers 
unknowingly putting their life long savings in investment scams or suffering from or 
facing collection cases due to over indebtedness. These are just some of the travails 
experienced by financial consumers.
Thus, recognizing the role of regulators in ensuing that the rights of each and 
every consumer are protected, this bill provides, among others, financial regulators 
such as Bangko Sentral ng Pilipinas, Insurance Commission and Securities and 
Exchange Commission, rulemaking, surveillance and inspection, market monitoring, 
enforcement and adjudication powers relative to consumer protection.
In the international arena, the G20, in February 2011, called on the 
Organization for Economic Cooperation and Development (ECD), the Financial Stability 
Board and other relevant international organizations to develop common principles on 
consumer protection in the field of financial services. Foremost of these principles is 
that financial consumer protection should be an integral part of the legal, regulatory 
and supervisory framework.
It is in this light that this bill is being introduced in order to have in place a 
comprehensive financial consumer protection regime wherein financial inclusion, 
financial education, good governance and effective supervision all come into play given


that consumer protection is shared responsibility among the regulators, consumers 
and other stakeholders.
In view of the foregoing, the passage of this bill into law is earnestly sought.
RAMO^I^B^IG^^EVILLA, JR.


EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
i- iBU'.'t r( li)f S»< frrtBiT
20 
FEB 12 P 2 -H
S E N A T E
RECEIVED 2'.:
Introduced by SENATOR RAMON BONG REVILLA, JR.
AN ACT
PROVIDING FOR THE FINANCIAL CONSUMER PROTECTION ACT
Be it enacted by the Senate and House o f Representatives o f the Philippines in 
Congress assembled:
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Section 1. Short Title. -  This Act shall be known as the ''Financial Consumer
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Protection Act o f2020'.
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Sec. 2. Declaration o f Policy. -  It is the policy of the State to ensure that
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appropriate mechanisms are in place to protect the interest of financial consumers
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under the conditions of transparency, fair and sound market conduct, and fair,
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reasonable and effective handling of financial consumer disputes, which are aligned
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with global best practices. These mechanisms reinforce their confidence in the
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financial market and foster the stability of Philippine financial system. Towards this
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end, the State shall implement measures to protect the following rights of financial
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consumers:
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a. Right to equitable and fair treatment;
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b. Right to disclosure and transparency of Financial Products and Services;
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c. Right to protection of consumer assets against fraud and 
misuse;
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d. Right to data privacy and protection;
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e. Right to complaints handling and redress
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Sec. 3. Definition of Terms. -  As used in this Act, the following terms shall mean
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or be understood as follows:
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a) "Financial Consumer" -  a person or entity who is a purchaser, lessee,
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recipient or prospective purchaser, lessor or recipient of financial products
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or services. It shall also refer to any natural person or micro, small or


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medium-sized enterprise that had or has current or prospective financial
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transaction with financial entities pertaining to financial products or services.
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b) "Financial Consumer Complaint" -  an expression of dissatisfaction filed by a
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financial consumers against a financial service provider relative to a financial
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product or service in which a response or resolution is expected.
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c) "Financial Products or Services" -  financial products or services which are
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developed or marketed by a financial service provider which may include,
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but are not limited to savings, credit, insurance, investments, payments,
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remittances and other similar products and services. This also includes
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digital financial services which pertain to the broad range of financial serves
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accessed and delivered through digital channels.
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d) "Financial Regulators" -  the implementing government agencies of this Act,
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namely, the Bangko Sentra! ng Pilipinas (BSP), Securities and Exchange
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Commission (SEC), Insurance Commission (IC) and the Cooperative
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Development Authority (CDA).
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e) "Financial Service Provider" -  a person, natural or juridical who provides
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financial products or services and are being supervised or regulated by any
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of financial regulators enumerated in this Act. This term shall include
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investment advisers as defined under Section 7 of this Act.
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f) "Marketing" -  the act of communicating, offering, promoting, advertising or
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delivering of financial products and services by financial service providers.
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g) "Micro, Small or Medium-sized Enterprise (MSME)" -  any business activity
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or enterprise engaged in industry, agri-business and/or services whether
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single proprietorship, cooperative, partnership o r corporation as defined
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under R.A. No. 9501, as amended or the Magna Carta for Micro, Small or
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Medium-sized Enterprise. Such definition shall be subject to review and
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adjustment by the Magna Carta for Micro, Small or Medium-sized Enterprise
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(MSMED) Council.
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Sec. 4. Scope and Coverage. -  This Act applies to all financial products and
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services offered or marketed by any financial service provider.
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Sec. 5. Financial Regulators. -  The BSP, SEC and IC shall enforce the provisions
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of this Act on all financial service providers they supervise or regulate by virtue of their


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respective charters, special laws and amendments thereto. The CDA shall be
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considered an implementing government agency of this Act only with respect to
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cooperatives offering financial services such as but not limited to savings and credit
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except insurance cooperatives which shall be under the jurisdiction of the IC for
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purposes of this Act.
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Sec. 6. Powers o f the Financial Regulators. -  Financial regulators shall have the
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following powers:
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A. Rulemaking. -  Financial regulators shall have the authority to formulate
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their own standard and rules for the application of the provisions of this Act
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to the specific financial products or services within their jurisdiction guided
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by internationally accepted standards and practices. Financial regulators
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may also determine reasonableness of charges or fees which a financial
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service provider may demand, collect or receive for any service or product
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offered to consumers, except interest rates which shall be governed by the
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Usury Law. Likewise, they may issue their respective rules of procedure
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concerning administrative actions arising from the implementation of this
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Act.
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B. Surveillance and Examination. -  Financial regulators may conduct off-site
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surveillance and on-site examination on their respective supervised financial
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service providers to ascertain that the provisions of this Act are complied
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with. The examination for financial consumer protection compliance may be
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conducted separately 
from 
examination 
of 
prudential 
regulations
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compliance. The provisions on the conduct of examination and surveillance
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provided in the respective charters of financial regulators, and pertinent
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special laws shall be made applicable in the examination and surveillance
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under this Act.
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The department heads and the examiners of the financial regulators shall
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be authorized to administer oaths to any director, officer, or employee of
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the supervised financial service providers subject to their examination, and
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to compel the presentation of all books, documents, papers, or records
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necessary in their judgment to ascertain the facts relative to the compliance
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of financial service providers to this Act.


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The supervised financial service provider shall afford to its respective 
financial regulator full opportunity to examine its records, and review its 
systems and procedures at any time during business hours when requested 
to do so by the financial regulator.
C. Market Monitoring. -  Financial regulators shall have the authority to require 
their respective supervised Financial Service Providers and their third party 
agents/service providers to submit reports or documents, as needed, and 
to access relevant data about financial products, services and markets from 
other government agencies in connection with market monitoring.
D. Enforcement. -  The Financial regulators shall have the authority to impose 
enforcement actions on their respective supervised Financial Service 
Providers for non-compliance with this Act. Such enforcement actions may 
include, but are not limited to, the following:
1. Restriction on the ability of the supervised Financial Service Provider to 
continue to collect fees or charges in cases of excessive fees or charges 
imposed by the Financial Service Provider, except interest rates which 
shall be governed by the Usury Law;
2. Disqualification and/or suspension of directors, officers or employees of 
the supervised Financial Service Provider responsible for violations of the 
provisions of this Act, its implementing regulations, or orders of the 
Financial Service Providers;
3. Imposition of fines, suspension, or penalties for any non-compliance with 
or breach of this Act, its implementing regulations or orders of the 
Financial Service Providers;
4. Issuance of a cease and desist order to the Financial Service Provider 
without the necessity of a prior hearing if in the Financial Regulator's 
judgement, the act or practice, unless restrained, amounts to fraud or a 
violation of the provisions of this Act and its implementing regulations or 
may unjustly cause grave or irreparable injury or prejudice to Financial 
Consumers.
The Financial Service Provider shall be afforded an opportunity to defend 
its act or practice in a summary hearing before the Financial Regulator


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or its designated body, upon request made by the Financial Service 
Provider within five (5) calendar days from its receipt of the order. If no 
such hearing is requested within said period, the order shall be final. If 
a hearing is requested by the Financial Service Provider, the proceedings 
shall be conducted summarily without adhering to the technical rules of 
evidence, and all issues shall be determined primarily on the basis of 
records, after which the Financial Regulator may either reconsider or 
make final its order;
5. Suspension of operation of any supervised Financial Service Provider in 
relation to a particular Financial Product or Service when in the Financial 
Regulator's judgment based on findings, the Financial Service Provider 
is operating in violation of the provisions of this Act and its implementing 
regulations.
Adjudication. -  Financial Regulators shall have the authority to adjudicate 
all actions arising from or in connection with financial transactions that are 
purely civil in nature and the claim or relief prayed for by the Financial 
Consumer is solely for payment or reimbursement of sum of money not 
exceeding the amount of P100,000.00 or as may be prescribed by the 
Financial Regulators. The Decision of the Financial Regulators in the 
adjudication shall be final and executory, and may not be restrained or set 
aside by the court except on petition for certiorari on the ground of lack or 
excess of jurisdiction of the Financial Regulators. The petition for certiorari 
may only be filed within ten (10) days from receipt by the aggrieved party 
of the decision. The adjudicatory power shall be exercised by the Head of 
the concerned Financial Regulator or a duly authorized officer or body, 
provided, that in case of BSP, the decision of the authorized officer or body 
is not appealable to the Monetary Board.
Financial Regulators may order the payment or reimbursement of money 
which is subject of the action filed before them. The Financial Regulators, 
in the exercise of their adjudicatory powers, shall have the power to issue 
a subpoena duces tecum and summon witnesses to appear in its 
proceedings and in appropriate cases, order the examination, search and


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seizure of all documents, and books of accounts of any entity or person
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under investigation as may be necessary for the proper disposition of the
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cases before them. Further, Financial Regulators shall have the authority to
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punish for contempt, both direct and indirect, in accordance with the
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pertinent provisions of and penalties prescribed by the Rules of Court.
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F. Other Powers. -  Financial Regulators may exercise such other powers as
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may be provided by their enabling laws or charters as well as those which
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may be implied from, or which are necessary or incidental to the carrying
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out of, the express powers granted the Financial Regulators to achieve the
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objectives and purposes of these laws.
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Sec. 7. Investment Adviser. -  Investment Advisers shall be subject to the rules
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and regulations to be issued by the SEC.
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Investment Adviser shall mean any person who, for compensation, engages in
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the business of advising others, either directly or through publications or writings, as
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to the value of investment products or as to the advisability of investing in, purchasing,
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or selling investment products, or who, for compensation and as part of a regular
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business, issues or promulgates analyses or reports concerning investment products;
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but does not include the following:
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a) Trust Department/Unit of Banks;
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b) Lawyer, accountant, engineer, or teacher whose performance of such
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services is solely incidental to the practice of his profession;
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c) Any investment banker or broker dealer whose performance of such services
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is solely incidental to the conduct of his business as such investment banker
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or broker dealer and who receives no special compensation therefor;
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d) The publisher of any bona fide newspaper, news magazine or business or
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business or financial publication of general and regular circulation;
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e) Such other persons as the SEC may designate by rules and regulations or
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order.
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Sec. 8. Duties and Responsibiiities o f Financial Service Providers. -
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A. Board and Senior Management Oversight -  The Board of Directors (BOD)
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and Senior Management of Financial Service Providers shall oversee the
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implementation of the Compliance Management System (CMS) of Financial


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Service Providers that effectively ensure conformity with this Act and shall 
provide the means by which Financial Service Providers shall identify, 
measure, monitor and control consumer protection risks inherent in its 
operations.
B. Appropriate Product Design and Delivery. -  Financial Service Providers shall 
continuously evaluate their Financial Products and Services to ensure that 
they are appropriately targeted to the needs, understanding and capacity 
of both their markets and their clients. This shall include, among others, the 
following:
1. Affordability and Suitability Assessments. -  Financial Service Providers 
should have written procedures for determining whether a particular 
Financial Consumer product or service is suitable and affordable for a 
client. This shall include determination of whether the amount and terms 
of the offered financial product or service allow a client, in terms of the 
individual ability, to meet the obligations with a low probability of a 
serious hardship and reasonable prospect that the Financial Product or 
Service will provide value to its client. For the purpose of extending 
credit, this assessment will include measures to prevent over­
indebtedness.
2. Cooling-off period. -  Financial Service Providers are expected to adopt a 
clear cooling-off policy, as may be prescribed by law or by rules and 
regulations issued by the relevant Financial Regulator upon its 
determination that a cooling-off period is necessary for a particular 
product subject of regulation by such Financial Regulator. Such policy 
should, among others, provide a client with a cooling-off period that will 
allow a client to consider the costs and risks of a Financial Product or 
Service, free from the pressure of the sales team of the Financial Service 
Provider. The length of the cooling-off period should be individually 
determined by Financial Service Providers based on reasonable 
expectation of the time required for a client to fully evaluate all the terms 
and risks of the Financial Products or Service and contact concerned 
parties who may be affected by its terms and conditions, unless a


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minimum or fixed period is required by the Financial Regulator for 
compliance by the Financial Service Provider or to be incorporated in the 
terms of the Financial Product or Service. Short period transaction or 
contracts may be allowed to have no cooling-off period which shall be 
provided in the regulation by the Financial Regulators.
During the cooling-off period, the Financial Consumer may cancel 
or return the contract without penalty; however, nothing herein prevents 
the Financial Service Providers from recovering the processing fees 
incurred. The Financial Service Providers are prohibited from engaging 
in practices that unreasonably burden the Financial Consumer in the 
Exercise of the right of cancellation during the cooling-off period. If the 
financial product is a contract of insurance, the right of return cannot be 
exercised after the Financial Consumer has made a claim under the 
contract of insurance.
3. Prepayment of Loans and other Credit Accommodations. -  a borrower 
may, at any time prior to the agreed maturity date prepay, in whole or 
in part, provided that any cost or fees charged to the borrower for such 
pre-payment shall be disclosed as required under the succeeding 
provision of this Section on transparency, disclosure and responsible 
pricing.
C. Transparency, Disclosure and Responsible Pricing. -  Financial Service 
Providers must ensure that they adopt disclosure principles in their 
communications with Financial Consumers that will include the use of clear 
and concise language understood by the target of information such as, 
pricing or any cost associated with the product or service that should be 
made in a consistent manner to facilitate comparison between similar 
Financial Products and Services across the industry.
Sufficient product disclosure must be provided before the contracting of the 
product or service to give the client enough basis and time for review. Any 
change in the terms of conditions of a product or service shall be provided 
to the client.


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In their advertising materials, Financial Service Providers shall disclose the 
contact information of their consumer assistance unit providing consumer 
assistance and handling Financial Consumer Complaints. Financial Sen/ice 
Providers shall also disclose that they are regulated and the advertising 
materials must identify the relevant Financial Regulator.
Financial Service Providers are legally responsible for all statements made 
in the marketing and sales materials that they produce related to their 
products. Disclosure of information on Financial Products or Services shall 
be made available to the public by the Financial Service Provider through 
printed materials, mass media, websites or digital platforms.
Responsible Pricing. -  in addition to the requirements of R.A. No. 3765 or 
the Truth in Lending Act, Financial Service Providers are require to 
document the reasons for setting the price of each financial product or 
service. Where the pricing procedures of a Financial Service Provider are 
inadequate or unreasonably high, the concerned Financial Regulator shall 
impose appropriate corrective actions.
D. Fair and Respectful Treatment of Clients. -  Financial Service Providers shall 
have the right to select their clients, provided, that the selection and 
treatment of their clients shall not involve discrimination on the basis of a 
person's race, ethnicity, origin, gender, disability, sexual orientation, 
religious affiliation or political affiliation, provided further, that Financial 
Service Providers are not precluded from instituting the necessary risk 
mitigating measures.
E. Privacy and Protection of Client Data. -  each Financial Service Provider must 
respect the privacy and protect the data of their clients. Consistent with the 
provisions of the Data Privacy Act, the Financial Regulators shall issue 
regulations governing the disclosure of client data to a third party.
Clients have the right to review their client data to ensure that inaccurate 
or deficient data is corrected or amended.
F. Financial Consumer Protection Assistance Mechanism. -  Each Financial 
Service Provider must establish a single consumer assistance unit to render


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free assistance to Financial Consumers on financial transaction concerns.
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This shall include handling of complaints, inquiries and requests.
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Financial Consumers who are unsatisfied with the Financial Service
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Provider's handling of their complaints, inquiries and requests, may elevate
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their concerns to the Financial Regulator that supervises the Financial
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Service Provider concerned.
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Sec. 9. Bundling o f Products. -  When a borrower is obliged by the Financial
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Service Provider to purchase any product, including an insurance policy, as a pre-
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condition for receiving a loan from the Financial Service Provider, the borrower should
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be free to choose the provider of the product and this information should be known
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to the borrower.
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Sec. 10. Training. -  Staff of Financial Service Providers who deal directly with
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Financial Consumers must receive adequate training, suitable for the complexity of
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the products or services they sell. Financial Service Providers must be qualified as
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appropriate for the complexity of the financial product or service they sell.
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Sec. 11. No Waiver o f Rights. -  No provision of a contract for a Financial Product
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or Service shall be lawful or enforceable if such provision waives or otherwise deprives
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a client of a legal right to sue the Financial Service Provider, receive information, have
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their complaints addressed and resolved, have their non-public client data protected
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or cancel the use of the Financial Product or Service without an unreasonable penalty.
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Sec. 12. Non-Exemption from Compliance. -  Notwithstanding any prior
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stipulation in a contract, financial entities shall not be exempted from compliance with
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the provisions of this Act, or deprive Financial Consumers of their rights under this
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Act.
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Sec. 13. Liability o f a Financial Service Provider on the Acts or Omissions o f its
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Authorized Representatives. -  The Financial Service Provider shall be responsible for
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the acts or omissions of its directors, officers, employees or agents, in marketing and
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transacting with Financial Consumers of its Financial Products and Service.
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Sec. 14. Prescription. -  All actions or claims accruing under the provisions of
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this Act and the rules and regulations issued pursuant thereto shall prescribe within
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five (5) years from the time the Financial Consumer transaction was consummated,
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or within five (5) years from the discovery of deceit or non-disclosure of material facts.
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For insurance contracts, the prescriptive period for the commencement of action 
provided under the Insurance Code shall apply.
Sec. 15. Penalty for Violation o f this Act. -  Whenever a Financial Service 
Provider wilfully violates any provision of this Act or any related rules, regulations, 
orders or instructions, issued by the Financial Regulators, the person or persons 
responsible for such violation shall be punished by imprisonment of not less than one 
(1) year but not more than five (5) years, or by a fine of not less than Fifty Thousand 
(P50,000.00) Pesos but not more than Two Million (P2,000,000.00) Pesos, or both, at 
the discretion of the court. In addition, in case profit is gained or loss is avoided as a 
result of the violation, a fine of no more than three (3) times the profit gained or loss 
avoided may also be imposed.
Sec. 16. Administrative Sanctions. -  The provisions on administrative sanctions 
of the respective charters of the Financial Regulators shall be made applicable to any 
Financial Service Provider, its directors, officers, employees or agents without 
prejudice to the enforcement actions provided under Section 6 (D) of this Act and the 
criminal sanctions provided under Section 15 of this Act, for any wilfull violation of this 
Act or any related rules, regulations, orders or instructions of the Financial Regulators, 
provided, that in addition to the administrative sanctions that may be imposed, the 
authority of the Financial Service Provider to operate in relation to a particular Financial 
Product or Service may be suspended or cancelled by the Financial Regulator.
Sec. 17. Repealing Clause. -  All laws, executive orders, rules and regulations 
or parts thereof which are inconsistent with this Act are hereby repealed or amended 
accordingly. Articles 131 to 147 of Title IV of Republic Act 7394 are hereby repealed.
Sec. 18. Transitory Provision. -  The Financial Regulators shall prepare the 
necessary rules and regulations to implement the provisions of this Act within one (1) 
year from its effectivity.
Sec. 19. Effectivity Clause. -  This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in at least two (2) national newspapers of general 
circulation.
Approved,
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