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

16" Congress
First Regular Session

House Bill No.

Introduced by Honorable Sergio A. F. Apostol

EXPLANATORY NOTE

‘This Bill further strengthening, Non-stock Savings and Loan Associations, Amending for the purpose
Republic Act No. 8367, Otherwise known as the “Revised Non-Stock Savings and Loan Associations Act of
1997”, was filed by my predecessor, Deputy Speaker Raul V. Del Mar in the last 14" Congress. The same was
referred to the Committee on Banks and Financial Intermediaries which approved after thorough
deliberations the Substitute Bill thereof submitted by the Technical Working Group (TWG) created by the
Committee to further refine its provisions. The Substitute Bill was approved on third and final reading in
‘the plenary and transmitted to the Senate. Unfortunately, it was not approved by the Senate for lack of
material time by reason of the 2010 elections.

‘The Non-Stock Savings and Loans Association (NSSLA) industry, concededly a constructive
component of the Philippine financial system, has contributed and is contributing ~ to the workings of the
economy. Its total assets reached P80.4 billion at the end of December 2008, and this growth, per the 2008
Report of the Bangko Sentral ng Pilipinas (BSP), was achieved and sustained “inspite of the slowdown in the
economy” and even while the industry “consistently relied on member's equity contribution for funding
source.”

In terms of resources and capacity, the NSSLAs, with its operating network of 144 offices, can do
‘more. As non-bank financial institutions, the NSSLA industry, already regulated under Republic Act No.
8367, otherwise known as the “Revised Non-Stock Savings and Loan Association Act of 1997", wants to
bring to the next level its operations as a financial entity to be in a better position to provide optimum
services for the accumulation of savings and extension of credit facilities in a fair manner to Association
members.

‘Towards this end, the attached bill seeks to amend RA 8367 to further strengthen the structure and
operations of NSSLAs to be efficient intermediaries between savers and borrowers, encouraging Filipinos t
save, empowering the members of the household through their credit facilities and services, particularly
providing short-term and long-term financing for their consumption expenditures and other personal
finance requirements.



To put the objectives in perspective, the amendatory bill declares it a policy of the State to
encourage industry, frugality, and the accumulation of savings and judicious utilization of credit among the
members of the NSSLAs, to regulate and put NSSLA operations on a sound, stable and efficient basis, to
prevent practices which are prejudicial to the interests of Association members, and to maximize the
protection of members of NSSLAs against misfeasance and malfeasance of the trustees and officers of
NSSLAs.

‘More importantly, the attached bill seeks to expand NSSLAs membership to a broader “well-defined
group” while maintaining the limitation not to transact with the general public; improve its deposit-taking
power by including dollar-savings deposits from members with spouses in foreign countries working abroad
‘as Overseas Fillpino Workers; enhance the borrowing, lending and investing function of the associations,
including the rediscounting of papers with the BSP or other banks and their branches and agencies subject
to BSP guidelines; and tasking the Monetary Board to set up specific regulatory framework for NSSLAs
through the BSP to take into account the unique business nature and characteristics of NSSLAs.

Indeed, a strengthened NSSLA can be a most effective instrument in providing opportunities to a
broad sector of our communities for the improvement of the people's standard of living and quality of life.

In this light, approval of the proposed measure is earnestly requested.

2™>district,Leyte


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

16" Congress
First Regular Session

853

House Bill No.

Introduced by Honorable Sergio A.F. Apostol

AN ACT
FURTHER STRENGTHENING NON-STOCK SAVINGS AND LOAN ASSOCIATIONS, AMENDING FOR THE
PURPOSE REPUBLIC ACT NO. 8367, OTHERWISE KNOWN AS THE “REVISED NON-STOCK SAVINGS AND
LOAN ASSOCIATION ACT OF 1997”

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

SECTION 1. Section 4 of Republic Act No. 8367 is hereby amended to read as follows:

“SEC. 4. Organization of an Association. - At least five (5) but not more than

fifteen (15) members of a well-defined group as provided herein may form an

association under this Act. An association, prior to transacting any business, shall secure

a license from the Monetary Board and register with the Securities and Exchange

Commission (SEC). The application for a license, signed by a majority of the
incorporators and verified by one of the trustees, shall include:

a) the proposed articles of incorporation and bylaws together with names and
addresses of the incorporators, trustees and officers, with a statement of
their character, experience and general fitness to engage in the non-stock
savings and loan business;

b) A NOTARIZED AGREEMENT BETWEEN THE EMPLOYER AND INCORPORATORS
OF THE ASSOCIATION COVERING THE COLLECTION MECHANISM FOR THE
ASSOCIATION;

©) [b)] an itemized statement of the estimated receipts and expenditures of the
proposed association for the first year;

d)_[c)]a filing fee in such amount as may be determined by the Monetary Board;
and

) [d)] such other information as the Monetary Board may require.

‘The SEC shall not register the articles of incorporation and bylaws of a proposed

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association unless the application is accompanied by a certificate of the Monetary Board
approving the same. The Monetary Board may deny the application to organize an
association under this Act if it finds that the association is being organized for any
purpose other than to engage in the business of a legitimate non-stock savings and loan
association or that the association's financial program is unsound, or that the proposed
members are adequately served by one or more existing associations.

PRIOR TO ITS OPERATION, AN ASSOCIATION IS REQUIRED TO SECURE A
FAVORABLE ENDORSEMENT FROM THE NATIONAL ORGANIZATION OF NON-STOCK
SAVINGS AND LOAN ASSOCIATIONS DULY RECOGNIZED AND ACCREDITED BY THE
BANGKO SENTRAL FOR PURPOSES OF ENSURING COMPLIANCE, SETTING AND
MAINTENANCE OF STANDARDS, FORMULATION OF PROGRAMS NECESSARY FOR THE
DEVELOPMENT OF STRONG AND DYNAMIC NON-STOCK SAVINGS AND LOAN
ASSOCIATIONS IN THE PHILIPPINES.

The association shall confine its membership to a well-defined group of persons
and shall not transact business with the general public. A “well-defined group” shall be
defined by the Monetary Board, and shall consist of, but shall not be limited to, any of
the following:

1) employees, officers, and directors of fone company] PRIVATE COMPANIES,

including member-retirees BELONGING TO THE SAME TRADE AND INDUSTRY;

2) [government] employees belonging to the same department(/], [branch]

BUREAUI/, office, AGENCY OR INSTRUMENTALITY OF THE GOVERNMENT IN
ACCORDANCE WITH THE REVISED ADMINISTRATIVE CODE OF 1987, including
member-retirees; and

3) SPOUSES AND immediate members of the families [(] up to [second] THIRD

degree of consanguinity oF affinity [)] of those falling under paragraphs 1 and
2 above, INCLUDING THEIR LEGALLY ADOPTED CHILDREN.
Associations whose articles of incorporation and bylaws were approved and

registered prior to the effectivity of this Act and which allow membership coverage

broader than the foregoing definition, shall be allowed to continue as such, [unless
otherwise required by the Monetary Board) SUBJECT TO COMPLIANCE WITH SUCH
OTHER REQUIREMENTS AS MAY BE DEEMED PROPER AND NECESSARY BY THE
MONETARY BOARD.

[The Monetary Board may, as circumstances warrant, require associations
mentioned in the immediately preceding paragraph to amend their bylaws to comply
with the concept of a “well-defined group.”)

‘THE ASSOCIATION MAY LEVY ENTRANCE FEES: PROVIDED, THAT in no case shall
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the total amount of entrance fees exceed [one] TWO percent [(1%)] (2%) of the
MINIMUM amount OF CAPITAL CONTRIBUTION [to be contributed or otherwise paid in
by the particular member: Provided, That for new members, the said fee shall be based
‘on the amount of contribution computed in accordance with the revaluation of the
assets of the association).

No person, association, partnership or corporation shall do business, or hold itself
‘out as doing business, as an association, or shall use the term “Savings and Loan
Association” or any other title or name tending to give the public the impression that it
is engaged in the operations and activities of an association, unless so authorized under
this Act.”

SEC. 2. Section 7 of Republic Act No. 8367 is hereby amended to read as follows:

“SEC. 7. Powers of Associations. - The association [shall] MAY:

a) accept deposits from fand grant loans) only {to} its members, INCLUDING
DOLLAR SAVINGS DEPOSITS: PROVIDED, THAT, IN THE CASE OF DOLLAR DEPOSITS, THE
‘SAME SHALL BE SUBJECT TO THE PRIOR APPROVAL OF THE BANGKO SENTRAL, subject to
such rules and regulations as the Monetary Board may promulgate to ensure sound,

stable and efficient operation: Provided, That no deposits shall be sourced or deducted

from the loans granted to a member without his or her written consent[];

b) EXTEND LOANS TO ITS MEMBERS. IN CASE OF AN UNCOLLATERALIZED LOAN,
THE MAXIMUM LOAN AMOUNT OF A MEMBER WILL BE BASED ON HIS PAYING
CAPACITY: PROVIDED, THAT HIS NET TAKE HOME PAY SHALL BE NO LOWER THAN WHAT
IS PROVIDED BY THE GENERAL APPROPRIATIONS ACT FOR GOVERNMENT EMPLOYEES
OR THAT SET BY COMPANY INTERNAL POLICIES, IN CASE OF PRIVATE EMPLOYEES. IN
CASE OF COLLATERALIZED LOANS, the loan[s] AMOUNT shall not exceed the members’
deposits and contributions in the association, plus twelve (12) months of his OR HER
regular salary as the association may allow AND/or seventy percent (70%) of the [fair
market] APPRAISED value of any property acceptable as collateral on first mortgage that
[he] THE MEMBER may offer as security: PROVIDED, FURTHER, THAT THE CONDITION
(ON NET TAKE HOME PAY UNDER AN UNCOLLATERALIZED LOAN IS COMPLIED WITH. THE
ASSOCIATION PRESCRIBE THE INTEREST RATE, FEES, CHARGES, REPAYMENT PERIOD AND
OTHER TERMS AND CONDITIONS OF THE LOAN BASED ON SOUND RISK MANAGEMENT
[: Provided, That no loan shall have the maturity date of more than five (5) years, except
loans on the security of unencumbered real estate for the purpose of home building

and home development, which may be granted with maturities not exceeding twenty-
five (25) years, and medium and long-term loans to finance agricultural projects, subject

to regulations prescribed by the Monetary Board]: Provided, [further,} FINALLY, That
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[the treasurer, cashier, or paymaster of the office] NOTWITHSTANDING THE PROVISION
OF ANY EXISTING LAW, RULE AND REGULATION TO THE CONTRARY, THE COMPANY,
DEPARTMENT, BUREAU, OFFICE OR AGENCY employing a member is required [,
notwithstanding the provision of any existing law, rule and regulation to the contrary,] to
make deductions from A MEMBER'S [his] salary, wage, income, OTHER COMPENSATION,
for] retirement pension, OTHER RETIREMENT AND SEPARATION BENEFITS AND OTHER
RECEIVABLES pursuant to the term of [his] THE MEMBER'S loan, [, and all other
deductions authorized by the member] OR HIS OR HER AUTHORIZATION AND to remit
such deductions to the association [concerned, and to collect such reasonable fee for his.
services as may be authorized by rules promulgated by the Monetary Board).

[In addition to the powers granted it by this Act and existing laws, any association
may!)

[a) charge reasonable interest and collect such necessary fees and charges
incidental to the grant of loans};

©) [b)] invest its funds in any TRADABLE INVESTMENT-GRADE [sound non-
speculative enterprise as well as in] bonds, security, and other obligations issued by the
government of the Philippines, or any of its political subdivisions, instrumentalities, or
corporations [including government-owned or-controlled corporations,] AND OTHER
INVESTMENT OUTLETS subject to [the rules and regulations of the Monetary Board]
PRIOR BANGKO SENTRAL APPROVAL;

4d) [c}] allow members to participate in the profits of the association ON THE BASIS
(OF THEIR RESPECTIVE CAPITAL CONTRIBUTIONS AND STATUS OF THEIR LOANS ON THE
DISTRIBUTION DATE OF NET INCOME AS APPROVED BY ITS BOARD OF
‘TRUSTEES/DIRECTO!

e) [d)] borrow money or incur such obligations not exceeding twenty percent

(20%) of the total assets of the association, from any lending institution, The Monetary

Board, may, in meritorious cases, raise the ceiling on the borrowing capacity of an
association to an amount not exceeding thirty percent (30%) of its total assets: Provided,
That any such association organized by employees of an entity or corporation may

borrow funds from s

entity or corporation but not vice-versa: Provided, further, That
the number of the 's creditors shall not exceed nineteen (19) at any one time;

£) [e)] maintain deposits with banks: Provided, That the amount of such deposits
shall be subject to the loan limit to a single borrower as prescribed herein or by other
special laws or regulations;

2) If] {require the employer-entity or corporation to provide it with adequate

office space within which it can conduct its business] LEND OR INVEST IN ANOTHER
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1 ASSOCIATION WITH THE MAIN OBJECTIVE OF EXTENDING FINANCIAL ASSISTANCE TO AN
3 ASSOCIATION EXPERIENCING LIQUIDITY PROBLEM; [and]
3 h {g)] engage in death benefit program meant exclusively for the mutual benefit
4 of its members];
5 i) REDISCOUNT PAPERS WITH THE BANGKO SENTRAL OR OTHER BANKS AND
6 ‘THEIR BRANCHES AND AGENCIES. THE BANGKO SENTAL SHALL SPECIFY THE NATURE OF
7 ‘THE PAPER DEEMED ACCEPTABLE FOR REDISCOUNT RATE TO BE CHARGED BY ANY OF
8 THESE INSTITUTIONS; AND
9 j) PERFORM SUCH ACTS AND FUNCTIONS AS MAY BE AUTHORIZED AND/OR
10 DELEGATED BY THE BANGKO SENTRAL.”
i SEC. 3. Section 9 of Republic Act No. 8367 Is hereby amended to read as follows:
12 "SEC. 9. Service Units. - An association [shall] 1S HEREBY AUTHORIZED TO open,
13 maintain and operate service units as may be necessary in order to EFFICIENTY AND
14 EFFECTIVELY deliver services to its members subject to RULES AND REGULATIONS
15 PRESCRIBED BY [approval of] the Monetary Board[.]: PROVIDED, HOWEVER, THAT
16 SERVICE UNITS CANNOT ACCEPT/RECEIVE DEPOSITS OR CONTRIBUTIONS.”
7 SEC. 4. Anew section, Section 9-A, is hereby added to Republic Act No. 8367 as to read as follows:
18 "SEC. 9-A. PROVISION OF OFFICE SPACE. - THE EMPLOYER-ENTITY OR
19 CORPORATION SHALL PROVIDE NON-STOCK SAVINGS AND LOAN ASSOCIATIONS WITH
20 ADEQUATE OFFICE SPACE IN ITS PREMISES WITHIN WHICH THEY CAN CONDUCT
21 BUSINESS.”
22 SEC. 5. Section 10 of Republic Act No. 8367 is hereby amended to read as follows:
23 “SEC. 10. Agents and Salesmen. - No person OR ENTITY shall act as a[n] SALES
24 agent or [sales] representative of an association [or operate an agency] without
25 [obtaining a license from] REGISTERING WITH the [Monetary Board) BANGKO SENTRAL.
26 No license OR REGISTRATION is required for a collector of an association [but no person
27 shall hold himself out or act as collector unless he is authorized as a collector in writing
28 by such association}.”
29 SEC. 6. Section 110f Republic Act No. 8367 is hereby amended to read as follows:
30 “SEC. 11, Merger or Consolidation of Associations. - To achieve simplicity,
31 economy and efficiency, MERGER OR CONSOLIDATION OF SEVERAL OR different
32 associations of one company or department or office [may merge or consolidate] SHALL
33 BE ALLOWED [upon] SUBJECT TO THE approval of the Monetary Board.”
34 SEC. 7. Section 12 of Republic Act No. 8367 is hereby amended to read as follows:
35 “SEC. 12. Trustees AND OFFICERS. - Only members are eligible as trustees of an
36 association: Provided, That in the case of a merger or consolidation of associations duly

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approved by the Monetary Board, the limitation on the maximum number of trustees in
a corporation, as provided for in the Corporation Code, shall not be applied for a
maximum period of three (3) years so that membership in the new board may include
up to the total number of trustees provided for in the respective articles of incorporation
of the merging or consolidating associations.

AFTER DUE NOTICE TO THE BOARD OF TRUSTEES OF THE ASSOCIATION, THE
MONETARY BOARD MAY DISQUALIFY, SUSPEND OR REMOVE ANY TRUSTEE OR OFFICER
WHO COMMITS OR OMITS AN ACT WHICH RENDERS HIM OR HER UNFIT FOR THE
POSITION.

IN DETERMINING WHETHER AN INDIVIDUAL IS FIT AND PROPER TO HOLD THE
POSITION OF A TRUSTEE OR OFFICER OF AN ASSOCIAITON, REGARD SHALL BE GIVEN TO
HIS OR HER INTEGRITY, EXPERIENCE, EDUCAION, TRAINING, AND COMPETENCE.”

SEC. 8 Section 14 of Repul

"SEC. 14. Compensation of Trustees, Officers and Employees. - No trustee,

‘Act No. 836

hereby amended to read as follows:

officer, or employee of an association shall receive from such association, and no
association shall pay to any trustee, officer, or employee of such association, any
‘commission, emolument, gratuity or reward based on the volume or number of loans
made, or based on the interest or fees collected thereon. Nothing in this section SHALL
BE CONSTRUED AS TO prohibit{s] or OTHERWISE [limits] RESTRICT any of the following:

a) receipt or payment of salaries of trustees, officers and employees;

b) RECEIPT OR PROVISION OF FRINGE BENEFITS TO OFFICERS AND EMPLOYEES;

¢) [b)] receipt of payment of commissions to agents whether or not based on the
volume or number of loans or on the interest or fees collected thereon; [and] OR

4d) {c)] receipt or payment of bonuses to trustees, officers or employees if such
bonuses are based on the performance and not on the volume or number of loans made
or on the interest or fees collected thereon.

[All increase in the compensation, any form, of all trustees and trustee-officers in
excess of ten percent (10%) thereof per annum shall require the approval of the Bangko
Sentral.)

IN ORDER TO PROTECT THE FUNDS OF MEMBERS AND CREDITORS, THE TERMS
AND CONDITIONS OF THE COMPENSATION OF TRUSTEES, OFFICERS AND EMPLOYEES
MAY BE SUBJECT TO RULES AND REGULATIONS OF THE BANGKO SENTRAL.”

SEC. 9. Section 16 of Republic Act No. 8367 is hereby amended to read as follows:

"SEC. 16. Execution of Loan Agreement. - For each loan made by an association,

{a written note or other obligation expressing a rate of interest must be executed by the

borrower] PAYMENT OF A SPECIFIC RATE OF INTEREST BY THE BORROWER SHALL BE
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EXPRESSLY STIPULATED IN THE LOAN AGREEMENT OR ANY DOCUMENT DEEMED AN
INTEGRAL PART THEREOF.”
SEC. 10. Section 18 of Republic Act No. 8367 is hereby amended to read as follows:

"SEC. 18. Limitations on Investment. - a) No association at any one time shall
invest in bonds and securities in a total amount in excess of [ten percent (10%)]
‘TWENTY-FIVE PERCENT (25%) of the total assets of such association without prior
written approval of the Bangko Sentral.

b) No association at any one time shall invest in real property in a total amount in
excess of five percent (5%) of the total assets of such association.

) No association at any one time shall invest in furniture, fixture, furnishings and

equipment and leasehold improvements for its offices, in an amount more than ten
percent (10%) of its total capital contribution.”
SEC. 11. Section 19 of Republic Act No. 8367 is hereby amended to read as follows:

“SEC. 19. Reserves. - Every association shall create a withdrawable share reserve
which shall consist of {two percent (2%)] ONE PERCENT (1%) of the total capital
contributions of the members [which the Monetary Board may increase to a maximum
of three percent (3%), as the situation warrants]. THE BANGKO SENTRAL SHALL IN
MERITORIOUS CASES AND WHEN THE INTERESTS OF THE ASSOCIAITON AND ITS
MEMBERS SO DICTATE, ALLOW THE STAGGERED BOOKING OF ITS RESERVES
REQUIREMENT TO INCLUDE ITS WITHDRAWABLE SHARE RESERVE, SURPLUS RESERVE
FOR LEDGER DISCREPANCIES AS WELL AS ITS RESERVES FOR OFFICE PREMISES,
FURNITURE, FIXTURES AND EQUIPMENT.

INo association shall distribute to its members any portion of its net income if its
withdrawable share reserve is less than the minimum requirement, or if by such
payment or distribution, such reserve will be reduced to an amount below the minimum
requirement provided herein.}

SEC. 12. Section 20 of Republic Act No. 8367 is hereby repealed.

[SEC. 20, Withdrawal by a member. — For the sole purpose of allowing an
‘equitable valuation and distribution of assets for withdrawing members, an association
shall, upon the effectivity of this Act, impute revalued surplus to be added to the
withdrawn capital, subject to such rules as the Monetary Board may prescribe. Such rules
shall allow a reasonable period between withdrawal of capital and payment of the share of
the member from the revalued surplus.)

SEC. 13, Section 21 of Republic Act No. 8367 is hereby amended to read as follows:
“SEC. 21. Annual Reports by the Association. - Every association shall, within one

hundred twenty (120) calendar days after the close of its fiscal year furnish the
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Monetary Board and post in any of the association's bulletin board or in any other
conspicuous place a copy of its financial statement, AS REVIEWED BY A BANGKO
SENTRAL-ACCEPTABLE INDEPENDENT AUDITOR, showing, in such form and detail as the
Monetary Board shall require, the amount and character of the assets and liabilities of
the association at the end of the preceding fiscal year. The Monetary Board may, in
addition to the foregoing, require the disclosure of such other information as it shall
deem necessary for the protection of the members of the association.”
SEC. 14. Section 22 of Republic Act No. 8367 is hereby amended to read as follows:

“SEC. 22. Regulatory Powers Over Associations. - Notwithstanding the provisions
of Section 130 of Republic Act No. 7653, the power to regulate the operations of any
association by the Monetary Board shall continue: PROVIDED, THAT THE MONETARY
BOARD SHALL TAKE INTO ACCOUNT THE UNIQUE BUSINESS NATURE AND THE INTRINSIC
MANDATE AND MISSIONS OF ASSOCIATIONS IN THE ADOPTION OF A REGULATORY
FRAMEWORK. SUCH PERTINENT FEATURES OF THE REGULATORY FRAMEWORK
PRESENTLY APPLIED TO REGULAR BANKS AND QUASI-BANKS MAY BE ADOPTED. SUCH
POWERS SHALL [and] consist of the following:

a) [in seeing] ENSURE to it that the capital, financing, direction and

administration, as well as the integrity, responsibility, and ability of organizers,

administrators, trustees, and officers of all associations organized and operated under
this Act, shall reasonably assure the safety of the interests which its members entrust to

ther

) [in regulating] REGULATE the operation and activities of associations, which

include, among others: 1) in placing limits to the maximum credit allowed any individual
borrower; 2) in determining the loan repayment period and loan procedures; 3) in
imposing a uniform accounting system IN COMPLIANCE WITH THE PHILIPPINE
FINANCIAL REPORTING STANDARDS and manner of keeping the accounts and records of
associations; 4) in instituting periodic surveys of loan and lending procedures, audits,
test check of each and other transactions of associations; and S) whenever necessary, in
conducting training courses for personnel of associations;

©) [in requiring all accountable officers and employees of every association to post
bonds for the faithful performance of their duties in reasonable sums and with such
sureties as the Monetary Board may require] PRESCRIBE ADDITIONAL LIQUIDITY
REQUIREMENTS;

4) [in fixing, by rules or by orders, in specific cases, after notice and hearing, the
limits of loanable funds, amounts for investment and reserves for withdrawals and other

contingencies] ENFORCE PROMPT CORRECTIVE ACTION ON ASSOCIATIONS SHOWING
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CONDITIONS INDICATING HIGHER THAN NORMAL RISK OF FAILURE;
) [in issuing rules and regulations for the proper implementation of this Act,
effective administration of the associations, and to] render advisory assistance to all
interested parties in order to carry out the intents and purposes of this Act; [and]
£) [in conducting] CONDUCT such investigations, takeing] such remedial measures
and [exercising] EXERCISE all powers under Republic Act No. 7653, insofar as they are
applicable in the enforcement of this Act.
1g) IMPOSE UPON ANY ASSOCIATION. ITS TRUSTEES, OFFICERS, OR EMPLOYEES,
AFTER DUE NOTICE AND HEARING, THE FOLLOWING ADMINISTRATIVE SANCTIONS,
WHENEVER APPLICABLE:
1) FINES IN AMOUNTS AS MAY BE DETERMINED TO BE APPROPRIATE BASED ON
THE NATURE AND GRAVITY OF THE OFFENSE;

2) RESTRICTION OR SUSPENSION OF LICENSE; AND

3) OTHER ADMINISTRATIVE SANCTIONS AVAILABLE TO THE BANGKO SENTRAL
UNDER ITS CHARTE!

h) PROVIDE A CREDIT FACILITY TO SYSTEMICALLY CRITICAL NON-STOCK SAVINGS
AND LOAN ASSOCIATIONS EXPERIENCING LIQUIDITY PROBLEMS; AND

i) PLACE UNDER RECEIVERSHIP, AFTER DUE NOTICE AND HEARING, AN
ERRING/DISTRESSED ASSOCIATION TO PROTECT THE INTERESTS OF ITS MEMBERS
PURSUANT TO THE EXISTING RULES AND REGULATIONS PROMULGATED BY THE
MONETARY BOARD. THE RECEIVER SHALL FORTHWITH GATHER AND TAKE CHARGE OF
ALL ITS ASSETS AND LIABILITIES AND ADMINISTER THESE FOR THE BENEFIT OF ITS
(MEMBERS AS PROVIDED UNDER THE REVISED RULES OF COURT. THE PROVISIONS OF
SECTION 30 OF REPUBLIC ACT NO. 7653 ON THE POWERS, FUNCTIONS, DUTIES AND
OTHER TERMS OF REFERNCE ON RECEIVERS SHALL APPLY.

The Bangko Sentral shall have the power to enforce the laws, orders, instructions,
rules and regulations promulgated by the Monetary Board applicable to associations; to
require associations, their trustees, officers and agents to conduct and manage the
affairs of the association in a lawful and orderly manner. After due notice and hearing,
the Monetary Board may revoke or suspend the license of any association, for such
period as it determines necessary, particularly when the solvency of an association is
imperiled by losses or irregularities, and/or when an association willfully violates any
provisions of this Act or any rule or regulations promulgated hereunder.

‘The director and examiners of the department of the Bangko Sentral charged with
the regulation of associations are hereby authorized to administer oaths to any trustee,

officer or employee of any association or to any voluntary witness and to compel the
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presentation of all books, documents, papers or records necessary in his judgment to
ascertain the facts relative to the true condition of any association or to any loan.”
SEC. 15, Section 24 of Republic Act No. 8367 is hereby amended to read as follows:
“SEC. 24, Annual SUPERVISION Fees. - Consistent with the provisions of Section
28 of Republic Act No. 7653, any association organized under this Act may, pursuant to
regulations promulgated for the purpose by the Monetary Board, be required to
contribute to the Bangko Sentral an annual SUPERVISION fee to be determined by the
Monetary Board.”
SEC. 16. Separability Clause. - If any provision of this Act is held invalid, the other provisions of this
Act shall not be affected thereby and shall continue in operation.
SEC. 17, Repealing Clause. - Any law or parts of law inconsistent with the provisions of this Act are
hereby repealed or modified accordingly.
SEC. 18. Effectivity. - This Act shall take effect fifteen (15) days following the completion of its
publication in the Official Gazette or in two {2) national newspapers of general circulation.
Approved,

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