Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

NINETEENTHCONGRESS \ 4
First Regular Session % ey: Bi &
te <3
House Bill No, 2981 Ener

Introduced by: REPRESENTATIVE EDWIN L. OLIVAREZ

EXPLANATORY NOTE

A credit card is issued to cardholders, customers and users of a
bank or other financial institution designed to enable the cardholder to
acquire from any commercial establishment for goods and services on
credit, based on the cardholder's assurance to the bank or card issuer to
pay the credit advanced on its due date, with or without additional
interests and other charges. Basically, credit cardholders borrow money
from the bank or card issuer that issued credit cards to its customers,
users and |patrons and the bank grants acredit line to its users,
customers, [patrons or cardholders. Simply put, it is a form of a cash
advance by the cardholders from the bank or other financial institution
issuing a credit card with the promise of paying the amount that they
spent together with interests and other chargers.

As our society is fast changing into a more modernized and
technological community, people now tend to favor transactions that are
simpler, more convenient and efficient. Gone are the days where people
have to have cash ready and available whenever they need to pay for
something. With the advent of credit cards, there is now a safer way of
paying almost anything we need. Now a days, carrying money in our
pockets have more often been regarded as disadvantageous, if not totally
unnecessary. Indeed, there are some basic advantages offered by the use
of credit cards as alternative for money. For one, , it is easily replaceable.
The use of credit cards will become one of the acceptable way to pay
almost all kinds of goods and services. Using credit cards provides a
convenient way to pay one’s purchases. Convenience is really what is
being peddied by bank or credit card issuer. However, this convenience in
commercial transactions have some form of quid pro quo more
particularly in the use of credit card in conducting commercial or other
business transactions. Bank and other financial institutions impose


interest and other charges. Most of the banks or card issuer collect some
form of monthly or annual membership fees, dues or joining fees to their
credit cardholders, customers and/or users. The membership fees, dues
or joining fees are on top of the interests and other charges that may be
imposed. Sometime banks and other credit card issuers impose
unconscionable membership fees to their cardholders and customers. It
is therefore about time to ease the financial burdern of credit card holders
by mandating banks, financial instutitions and other credit card issuers
to elminate the annual membership fees, dues and/or other joining fees
that they i se to their customers.

EDWIN L. OLIVAREZ



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

NINETEENTHCONGRESS
First Regular Session

House Bill No. 2581

Introduced by: REPRESENTATIVE EDWIN L. OLIVAREZ

AN ACT
MANDATING BANKS, FINANCIAL INSTITUTIONS AND OTHER CREDIT
CARD ISSUERS TO ELIMINATE THE ANNUAL MEMBERSHIP FEES,
DUES OR JOINING FEES FOR THEIR CREDIT CARDHOLDERS,
USERS, ‘USTOMERS AND PATRONS AND FOR OTHER PURPOSES.

Section 1. Short Title. This Act shall be known as the “No
Membership Fees for Credit Cardholders Act of 2022”.

Section 2. Definition of Terms. For purposes of this Act, the
following terms shall be used under the definition provided hereof, to wit:

Credit Card - is a card issued to cardholders, customers and users of
a bank or other financial institution designed to enable the cardholder to
pay any commercial establishment for goods and services, based on the
cardholder's assurance to the bank or card issuer to pay them for the
amounts that they paid, with the additional agreed interests and other
charges, in some cases.

Card Holder, Credit Card User, Credit Card Customer and Credit Card
Patron — is a person who is a holder of credit card that uses the same to
pay any commercial establishment for goods and services with the
promise of paying the bank, or financial institution or credit card issuer
with the amount that he used, with or without interests and other
charges.

Credit) Card Issuer -is a bank or other financial institution that
issues credit cards to its customers, users and patrons.


Membership fee - is a monthly or an annual fee that is automatically
imposed by| the bank, financial institution or credit card issuer to its
credit card|holders, customers, patrons or credit card users for the
purpose of issuing the credit card and for the benefits derived therewith.

Joining fee - is a fee imposed by the bank financial institution or
credit car issuer to its customers, credit car holders, patrons or credit
card users upon joining or availment of the credit card benefits.

Section 3. Elimination or removal of monthly or annual
membership fees, dues or joining fees. Banks, financial institutions
and credit card issuers shall elimate or remove the imposition of annual
membership fees, dues or joining fees to their customers, patrons or
credit cardholders users as they already imposed interest and other
charges to their credit cardholders upon the use thereof.

Section 4. Limitation to the use of credit cards. No other person
shall be allowed to use or utilize the credit cards issued under the name
of a person other than himself or herself, for the payment of his or her
purchases.

Secti 5. Confidentiality. No person may use or disclose any
information relating to credit card transactions obtained pursuant to this
Act other than for purposes directly related to the processing of related
transactions, or the billing or collection of amounts charged pursuant
thereto.

Section 6. Exceptions to the Confidentiality Rule. Section 3 of
this Act may admit of certain exceptions, to wit:

(a) Credit card issuers or others acting on behalf of such issuers may
also use and disclose such information for purposes directly related to
servicing an} issuer’s accounts.

(b) Credit card issuers or others directly involved in the processing of
credit card transactions or the billing or collection of amounts charged
thereto may also use and disclose such information for purposes directly
related to—

(1) statistical risk and profitability assessment;

(2) transferring receivables, accounts, or interest therein;

(3) auditing the account information; and

(4) complying with the laws of the Philippines or any valid court order
pursuant to a criminal investigation.

Provided, that the use and disclosure of information under this
paragraph shall be made only to the extent authorized by written
procedures, rules and regulations promulgated by Banko Sentral ng
Pilipinas (BSP).


Section 7. Penalty imposed against Banks, Financial
institutions or Credit card issuers. Any bank, financial institution or
credit card issuer that imposes annual membership fees, dues or joinng
fees to their credit card holders, customers, patrons and/or user shall be
liable for a fine of P100,000.00 for every imposition of annual membership
fees against its cardholders.

Section 8. Exclusive Jurisdiction of Bangko Sentral ng
Pilipinas. The Bangko Sentral ng Pilipinas (BSP) shall have exclusive
jurisdiction for all complaints of violation of the provisions of this act.

Section 9. Implementing Rules and Regulations. The BSP shall
promulgate the Implementing Rules and Regulations to carry out the
provisions of this Act. Such rules and regulations shall take effect upon
their publication in three (3) newspapers of general circulation.

Section 10. Repealing Clause.- All laws, presidential decrees,
letters of instructions, executive orders, rules and regulations insofar as
they are inconsistent with this Act, are hereby repealed or amended as the
case may be.

Section 11. Separability Clause. - In the event that any provision
of this Act) or any portion thereof is declared unconstitutional by a
competent court, the other provisions shall not be affected thereby and
shall remain valid and enforceable.

Section 12. Effectivity Clause. - This Act shall take effect after its
complete publication in at least three (3) newspapers of general
circulation.

APPROVED.