13TH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No. 
4' 
.- 
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INTRODUCED BY HON. MANUEL B. VELAR JR. 
EXPLANATORY NOTE 
The activities of the country's lending institutions are regulated by the General Banking 
Law, the Central Banking Act, pertinent provisions of the New Civil Code, and such special 
laws as the Truth in Lending Act. In all these laws, nowhere is it provided that financial 
institutions and other firms engaged in the extension of credit must make credit available with 
fairness, impartiality and without discrimination on the basis of sex, martial status, race, creed, 
religion, or age. 
This bill seeks to fill the gap in existing laws by requiring the country's financial 
institutions and other firms engaged in the extension of credit to make credit equally available to 
all credit-worthy customers without regard to sex, marital status, national origin, religion, or 
age. 
A regime of equality in credit extension will enhance economic stability. It will also 
foster friendly competition among the various financial institutions and firms engaged in the 
extension of credit. 


30 pfj :27 
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By : @ 
13TH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No. 
INTRODUCED BY HON. MANUEL B. VELAR JR. 
EQUAL CREDIT OPPORTUNITY ACT 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
Section 1 Short Title. This shall be known as the "Equal Credit Opportunity Act." 
Section 2. Declaration of State Policy, It is hereby declared a state policy to enhance 
economic stability and foster competition among the country's financial institutions by requiring 
these and other firms engaged in the extension of credit to make credit equally available to all 
credit-worthy customers with fairness, impartiality, and without discrimination. 
Section 3. Definition of Terms. As used in this Act-- 
(a) The term "adverse action" means a denial or revocation of credit, a change in the 
terms of an existing credit arrangement, or a refusal to grant credit in substantially the terms 
requested. Such term does not include a refusal to extend additional credit under an existing 
credit arrangement where the applicant is delinquent or otherwise in default, or where such 
additional credit would exceed a previously established credit limit. 
(b) The term "applicant" means any person who applies to a creditor directly for an 
extension renewal or continuation of credit, or applies to a creditor indirectly by use of an 
existing credit plan for an amount exceeding a previously established credit limit. 
(c) The term "Board" refers to the Central Monetary Board; 
(d) The term "credit" means the right granted by a creditor to a debtor to defer payment 
of debt or to incur debt and defer its payment or to purchase property or services and defer 
payment therefore. 


(e) The term "creditor" means any person who regularly extends, renews or continues 
credit, any person who regularly arranges for the extension, renewal or continuation of credit; or 
any assignee of an original creditor who participates in the decision to extend, renew or continue 
credit. 
(f) The term "person" means a natural person, a corporation, government or 
governmental subdivision or agency, trust, estate, partnership, cooperative, or association. 
Section 4. Activities Constituting Discrimination. It shall be unlawful for any creditor to 
discriminate against any applicant, with respect to any aspect of a credit transaction-- 
(a) on the basis of race color, religion, national origin, sex or marital status, or age 
(provided the applicant has the capacity to contract); 
(b) because all or part of the applicant's income derives from dole-outs or any public 
assistance program; or 
(c) because the applicant has in good faith exercised any right under this Act. 
Section 5. Activities Not Constituting Discrimination. It shall not constitute 
discrimination for purposes of this Act for a creditor-- 
(a) to make an inquiry of marital status if such inquiry is for the purpose of ascertaining 
the creditor's right and remedies and applicable to the particular extension of credit and not to 
discriminate in a determination of credit-worthiness. 
(b) to request the signature of both parties to a marriage for the purpose of creating a 
valid lien passing clear title, waiving inchoate rights to property; or assigning earnings: Provided 
however, that this subsection shall not be constructed to permit a creditor to take sex or marital 
status into account in connection with the evaluation of credit-worthiness of any applicant. 
(c) to make an inquiry of the applicant's age of whether the applicant's income derives 
from dole-outs or any public assistance program if such inquiry is for the purpose of 
determining the amount and probable continuance of income levels, credit history, or other 
pertinent element of credit-worthiness as provided in regulations of the Board. 
(d) to use any empirically derived credit system which considers age if such system is 
demonstrably and statistically sound in accordance with regulations of the Board, except that in 


the operation of such system the age of an elderly applicant may not be assigned a negative 
factor or value; or 
(e) to make and inquiry or to consider the age of an elderly applicant when the age of 
such applicant is to be used by the creditor in the extension of credit in favor of such applicant. 
Section 6. Additional Activities Not Constituting Discrimination. It is not a violation of 
this Act for a creditor to refuse to extend credit offered pursuant to-- 
(a)any credit assistance program expressly authorized by law for an economically 
disadvantaged class of persons; 
(b) any credit assistance program administered by a profit organization for its members 
or an economically disadvantaged class of persons; or 
(c) any special purpose credit program offered by profit-making organization to meet 
special social needs which meets standards prescribed in regulations by the Board if such refusal 
is required by or may pursuant to such program. 
Section 7. Reason for Adverse Action; Procedure Applicable. 
(a) Within thirty days (or such longer reasonable time as specified in regulations of the 
Board for any class of credit transaction) after receipt of a completed application for credit, a 
creditor shall notify the applicant of its action on the application. 
(b) Each applicant against whom adverse action is taken shall be entitled to a statement 
of reasons for such action form the creditor. A creditor satisfies this obligation by-- 
(i) providing statements of reason in writing as a matter of course to applicants 
against whom adverse action is taken; or 
(ii) giving written notification of adverse action which discloses (1) the 
applicant's right to a statement of reasons within thirty days after receipt by the creditor of a 
request made within sixty days after such notification, and (2) the identify of the person or office 
form which such statement may be obtained, Such statement may be given orally if the written 
notification advises the applicant of his right to have the statement of reasons confirmed in 
writing on write request. 


(c) A statement of reasons meets the requirements of this section only if it contains the 
specific reasons for the adverse action taken. 
(d) Where a creditor has been requested by a third party to make specific extension of 
credit directly to an applicant, the notification and statement of reasons required by this 
subsection may be made directly by such creditor, or indirectly through the third party, provided 
in either case that the identify of the creditor is disclosed. 
(e) The requirements of paragraph (b), (c), or (d) may be satisfied by verbal statements or 
notifications in the case of any creditor who did not act on more than one hundred and fifty 
applications during the calendar year preceding the calendar year in which the adverse action is 
taken, as determined under regulations of the Board. 
Section 7. Promulgation of Regulations by Board; Establishment of Consumer Advisory 
Council by Board; Duties, Membership, etc; of Council. 
(a) The Board shall prescribe regulations to carry out the purposes of this Act. These 
regulations may contain but are not limited to such classifications, differentiation, or other 
provisions, and may provide for such adjustments and exceptions for any class of transactions, 
as in the judgement of the Board are necessary or proper to effectuate the purposes of this Act, 
to prevent circumvention or evasion thereof, or to facilitate or substantiate compliance 
therewith. In particular, such regulations may exempt from one or more of the provisions of this 
Act any class of transactions not primqrily for personal, family, or household purposes, if the 
Board makes an express finding that the application of such provision or provisions would not 
substantially to carrying out the purposes of this Act. Such regulations shall be prescribed as 
soon as possible after the date of enactment of this Act. 
(b) The Board shall establish a Consumer Advisory Council to advise and consult with it 
in the exercise of its functions and to advice and consult with it concerning other consumer 
related matters it may place before the Council. In appointing the members of the council, the 
Board shall seek to achieve a fair presentation of the interests of creditors and consumers. The 
Council shall meet from time to time at call of the Board. Members of the Council who are not 
regular full-time employees of government, national or local, or any government-owned or 


controlled corporation, shall, while attending meetings of such Council, be entitled to receive 
compensation at a rate fixed by the Board, but no exceeding P300 per day, including travel time. 
Such members may be allowed travel expenses, including transportation and subsistence, while 
away from their homes or regular place of business. 
Section 9. Administrative Enforcement. Compliance with the requirement imposed 
under this Act shall be enforced by" 
(a) the Board, with respect to banks, including government banking institutions, savings 
and loan associations, and other financial institutions or firms engaged in the extension of credit. 
(b) the Land Bank of the Philippines, with respect to agricultural credit unions and 
cooperatives. 
(c) the Securities and Exchange Commission, with respect to brokers and dealers. 
The Board shall, however exercise overall authority in the enforcement oft the 
requirements imposed under this Act. 
Section 10. Rules and Regulations by Enforcing Agencies. The authority of the Board to 
issue regulation does not impair the authority of the other agencies designated in section 9 to 
make rules respecting their own procedures in enforcing compliance with the requirements 
imposed under this Act. 
Section 11. Civil Liability. (a) Individual or Class Action for Actual Damages. Any 
creditor who fails to comply with any requirements imposed under this Act shall be liable to the 
aggrieved applicant for any actual damages sustained by such applicant acting either in 
individual capacity or as a member of a class. 
(b) Recovery of Punitive Damages in Individuals and Class Actions for Actual Damages; 
Exemptions, Maximum Amount of Punitive Damages in Individual Actions; Limitations on 
Total Recovery in Class Actions; Factors Determining Amount of Award. Any creditor, other 
than a government or governmental subdivision or agency, who fails to comply with any 
requirement imposed under this Act shall be liable to aggrieved applicant for punitive damages 
in an amount not greater than PlO,OOO, in addition to any actual damages provided in subsection 
(a) of this section, except that in the case of a class action the total recovery under this 


subsection shall not exceed the lesser of P100,OOO or one (1%) per centum of the net worth of 
the creditor. In determining the amount of such damages in any action, the court shall consider, 
among other relevant factor, the amount of any actual damages awarded, the fi-equency and 
persistence of failures of compliance by the creditor, the resources of the creditor, the number of 
persons adversely affected, and the extent to which the creditor's failure of compliance was 
intentional. 
(c) Recovery of Costs and Attorney's Fees. In the case of any successful action under 
subsection (a) or (b) of this section, the costs of suit, together with a reasonable attorney's fee as 
determined by the court, shall be added to any damages awarded by the court under such 
subsection. 
Section 12. Jurisdiction of Courts; Time for Maintenance of Action; Exceptions, Any 
action under this Act may be brought in the appropriate court using jurisdictional basis the 
amount in controversy. No such action shall be brought later than two years form the date of the 
occurrences of the violations, except that-- 
(a) whenever any agency having responsibility for administrative enforcement under 
section 9 of commences an enforcement proceeding within two years from the date of the 
occurrence of the violation, or 
(b) whenever the Solicitor General commences a civil action under this section within 
two years from the date of the occurrence of the violation. 
Then any applicant who has been a victim of the discrimination which is the subject of 
such proceeding or civil may bring an action under this section not later than one year after the 
commencement of the proceeding or action. 
Section 13, Request by Responsible Enforcement Agency to Solicitor General for Civil 
Action (a) The agencies having responsibility for administrative enforcement under section 9, if 
unable to obtain compliance with the requirements imposed under this Act, are authorized to 
refer the matter to the Solicitor General with a recommendation that an appropriate civil action 
be instituted. 


(b) When a matter is referred to the Attorney General pursuant to subsection (a) of this 
section, or whenever he has reason to believe that one or more creditors are engaged in a pattern 
or practice in violation of this Act, the Solicitor General may bring civil action in a court of 
competent jurisdiction, including injunctive relief. 
Section 14. Discovery of Creditor's Granting Standards. Nothing in this Act shall be 
construed to prohibit the discovery of a creditor's credit granting standards under appropriate 
discovery procedures in the court in which an action or proceeding is brought. 
Section 15. Annual Reports to Congress; Contents Each year, the Board shall report to 
the Congress concerning the administration of its functions under this Act, including such 
recommendations as it may deem necessary or appropriate. In addition, the report of the Board 
shall include its assessment of the extent to which compliance with the requirements of this Act 
is being achieved and a summary of the enforcement actions taken by each of the agencies 
assigned administrative enforcement responsibilities under section 9 of this Act. 
Section 16. Repealing Clause. Any law, presidential decree or issuance, executive order, 
letter of instruction, administrative order, rule or regulation contrary to or inconsistent with the 
provisions of this Act is hereby repealed, modified or amended accordingly. 
Section 17. Separability Clause. If any provision or part hereof is held invalid or 
unconstitutional, the remainder of the law or the provision not otherwise affected shall remain 
valid and subsisting. 
Section 18. Effectivity Clause. This Act shall take effect fifteen (15) days after its 
publication in at least two (2) newspapers of general circulation. 
Approved,