THIRTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
5 
S.B. No. 
Introduced by Senator Miriam Defensor Santiago 
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, marital 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 equally available to all 
credit worthy customers without regard to sex, marital status, national origin, religion, or age. A 
regime of equality credit extension will enhance economic stability. It will also foster friendly 
competition among the various financial institutions and other firms engaged in the extension of 
credit. 


THIRTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
”04 Jiji. 28 P 2 :!I 5 
First Regular Session 
1 
a: 
S E N A  
i I IiCiE !!/ED BY : . _ _ _ ~ , _ _  
S.B. No. 
Introduced by Senator Miriam Defensor Santiago 
EQUAL CREDIT OPPORTUNITY ACT 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Short Title. - This Act shall be known as the “Equal Credit Opportunity 
Act.” 
. 
SECTION 2. Declaration of 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. Defkition of Terms. -As used in this Act - 
(1) “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 amount or on 
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. 
(2) “Applicant” means any person who applies to a creditor directly for an 
extension, renewal or continuation of credit, or applies for a credit indirectly by use of an 
existing credit plan for an amount exceeding a previously established credit limit. 
(3) “Board” refers to the Central Monetay Board; 


(4) “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. 
(5) “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. 
(6) “Person” means a natural person, a corporation, a 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- 
On the basis of race, color, reIigion, national origin, sex or marital status, 
(1) 
or age (provided the applicant has the capacity to contract); 
(2) 
Because all or part of the applicant’s income derives from dole-outs or any 
public assistance program; or 
(3) 
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- 
(1) 
To make an inquiry as to marital status if such inquiry is for the purpose of 
creating a valid lien, passing clear title, waiving inchoate rights to property; or assigning 
earnings; 
(2) 
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 construed to permit a creditor to 
take sex or marital status into account in connection with the evaluation of credit-worthiness of 
any applicant. 


(3) 
To make an inquiry of the applicant’s age or 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. 
(4) 
To use any empirically derived credit system which considers age if such a 
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 
(5) 
To make an 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- 
(1) 
Any credit assistance program expressly authorized by law for an 
economically disadvantaged class of persons; 
(2) 
Any credit assistance program administered by a profit organization for its 
members or an economically disadvantaged class of persons; or 
(3) 
Any special purpose credit program offered by profit-making organization 
to meet special social needs which meets standard prescribed in regulations by the Board if such 
refusal is required by or made pursuant to such program. 
SECTION 7. Reason for Adverse Action; Procedure Applicable. 
(1) 
Within thirty (30) 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. 
(2) 
Each applicant against whom adverse action is taken shall be entitled to a 
statement of reasons for such action from the creditor. A creditor satisfies this obligation by- 


@)Providing statements of reasons in writing as a matter of couse to 
applicants against whom adverse action is taken; or 
(B) Giving written notification of adverse action which discloses 
i. The applicant’s rights to a statement of reasons within thirty (30) days 
after receipt by the creditor of a request made within sixty (60) days after such notification, and 
ii. The identity of the person or office &om 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 written request. 
(3) 
A statement of reasons meets the requirements of this Section only if it 
contains the specific reasons for the adverse action taken. 
(4) 
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 identity of the creditor is disclosed. 
(5) 
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 (150) applications during the calendar year preceding the calendar year in which the 
adverse action is taken, as determined under regulations of the Board. 
SECTION 8. 
Promulgation of Regulation by Board; Establishment of Consumer 
Advisory Council by Board; Duties, Membership, etc., of Council. - 
(1) 
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 
provision, and may provide for such adjustments and exceptions for any class of transactions, as 
in the judgment 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 moTe of the provisions of this Act any class 
of transactions not primarily for personal, family, or household purposes, if the Board makes an 


express finding that the application of such provision or provisions would not contribute 
substantially to carrying out the purposes of this Act. 
(2) 
The Board shall establish a Consumer Advisory Council to advise and 
consult with it in the exercise of its hctions and to advise and consult with it concerning other 
consumer related matters it may place before the Council. In appointing the members of the 
Council, the Council shall meet from time to time at the 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 THREE 
HLJNDRED PESOS (P300.00) 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 requirements imposed 
under this Act shall be enforced by: 
(1) 
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. 
(2) 
The Land Bank of the Philippines, with respect to agricultural credit union 
cooperatives; 
(3) 
The Securities and Exchange Commission, with respect to brokers and 
dealers. 
The Board shall, however, exercise overall authority in the enforcement of the 
requirements imposed under this Act. 
SECTION 10. Rules and Regulations by Enforcing Agencies. - The authority of the 
Board to issue regulations 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 1 1. Civil Liabiiip - 
(1) 
Individual or Class Action for Actual Damages -Any creditor who fails to 
comply with any requirement imposed under this Act shall be liable to the aggrieved applicant 
for my actual damages sustained by such applicant acting either in individual capacity or as a 
member of a class. 
(2) 
Recovery of Punitive Damages in Individual and Class Actions for Actual 
Damages; Exemptions; Maximum Amount of Punitive Damages in Individual Actions; Limitation 
on Total Recovery in Class Actions; Factors Determining Amount ofAward - 
(9 
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 the aggrieved applicant for punitive damages in an amount not greater than TEN 
THOUSAND PESOS (P10, OOO.OO), 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 amount of ONE HUNDRED THOUSAND PESOS (PIOO, 
000.00) or one per centum (1%) of the net worth of the creditor. In determining the amount of 
such damages in any action, the court shall consider, among other relevant factors, the amount of 
any actual damages awarded, the frequency 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. 
(3) 
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 as jurisdictional basis 
the amount in controversy. No such action shall be brought later than two years from the date of 
the occurrence of the violations, except that - 


(1) Whenever any agency having responsibility for administrative enforcement under 
Section 9 commences an enforcement proceeding within two (2) years from the date of the 
occurrence of the violation, or 
(2) Whenever the Solicitor General commences a civil action under this section 
within two (2) years from the date of the occurrence of the violation. 
Any applicant who has been a victim of the discrimination which is the subject of such 
proceeding or civil action may bring an action under this Section not later than one (1) year after 
the commencement of that proceeding or action. 
SECTION 13. Request by Responsible Enforcement Agency to Solicitor General for 
Civil Action - 
(1) 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 
(2) 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 a 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 withy the requirements of this Act 


is being achieved, and a summary of the enforcement actions taken by each of the agencies 
assigned administrative responsibilities under Section 9 of this Act. 
SECTION 16. Repealing Clause. - Any law, preside tial decree or issuance, executive 
order, letter of instruction, administrative order, rule or regulation contrary to or inconsistent 
with, the provision of this Act is hereby repealed, modified or amended accordingly. 
f 
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. 
I297 acs