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Republic of the Philippines > RECEIVED 2
HOUSE OF REPRESENTATIVES fe pare 7 MAR fa wi
Quezon City Tame:

SEVENTEENTH CONGRESS
Second Regular Session

7351

House Bill No.

Introduced by Representative Michael L. Romero, Ph.D.

EXPLANATORY NOTE

‘The Truth in Lending Act was designed to protect persons who obtain
loans from credit institutions by requiring full disclosure of the terms and
costs involved. Violation of the Act includes schemes of omission such as
non-declaration of escalation clauses and sudden changes of interest rates
without prior and due consultation from consumers, which result to
uninformed use of credit. This works against the rights of customers to
know the full details of the credit transactions that they enter into.

Since the law’s promulgation in 1963, penalties for violation have
remained the same for more than 50 years. Credit companies can easily
violate the rights of consumers and would only have to pay P100.00 to
P2,000.00 to the victim and be fined not more than P5,000.00. At present,
these amounts are not commensurate for the resulting damage to
consumers and would not deter the commitment of violations.

‘This bill adjusts the penalties provided for in the Truth in Lending Act
to encourage compliance with the law and to avoid violations of customer's
rights.

In view of the foregoing, passage of this bill is earnestly sought.

L7

L. ROMERO, Ph.D.


Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

7351

House Bill No.

Introduced by Representative Michael L. Romero, Ph.D.

AN ACT
ADJUSTING THE PENALTIES FOR THE VIOLATION OF THE TRUTH IN
LENDING ACT, AMENDING SEC. 6 OF RA NO. 3765 THEREOF

Section 1. Section 6 of the Act shall be amended as follows—

“ (q) Any creditor who in connection with any credit transaction fails
to disclose to any person any information in violation of this Act or
any regulation issued thereunder shall be liable to such person in the
amount of [P100.00] TEN THOUSAND PESOS (P10,000) or in an
amount equal to twice the finance charged required by such creditor
in connection with such transaction, whichever is the greater, except
that such liability shall not exceed [P2,000.00] TWO HUNDRED
THOUSAND PESOS (P200,000) on any credit transaction. Action to
recover such penalty may be brought by such person within one year
from the date of the occurrence of the violation, in any court of
competent jurisdiction. In any action under this subsection in which
any person is entitled to a recovery, the creditor shall be liable for
reasonable attorney's fees and court costs as determined by the
court.”

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* (c) Any person who willfully violates any provision of this Act or any
regulation issued thereunder shall be fined by not less than
[P1,000.00] ONE HUNDRED THOUSAND PESOS (P100,000) but not
more than [P5,000.00] FIVE HUNDRED THOUSAND PESOS
(P500,000) or imprisonment for not less than six months, nor more
than one year or both.”

Xxx Xxx xxx
Section 2. Separability Clause. -If any provision of this Act is declared

unconstitutional the remainder of this Act or any provision not affected
thereby shall remain in full force and effect.


Section 3. 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 4. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,