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

SEVENTEENTH (17%) CONGRESS
First Regular Session

5994

House Bill No.

Introduced by REPRESENTATIVE ERIC L. OLIVAREZ

EXPLANATORY NOTE

We all know that a 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. 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 a credit 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. A credit card allows the consumers a continuing
balance of debt, subject to interest being charged. It can also be used
like money or currency by the owner of the card. A credit card typically
involves a third-party entity, normally a bank or financial institution
that pays merchant of goods and services and is reimbursed by the
buyer plus interest and other charges.


As our society is fast changing into a more modernized and
technological community, the 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, credit cards cannot be stolen or robbed. Secondly, 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 peddled 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 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 they imposed. Sometime banks and
other credit card issuers impose unconcionable 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 impose to
their customers.

pw.
ERIC L. OLIVAREZ


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

SEVENTEENTH (17!) CONGRESS
First Regular Session

5994

House Bill No.

Introduced by REPRESENTATIVE ERIC 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, CUSTOMERS 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 2017”.

Section 2. 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 acard 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.

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 plus 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 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 that come with it.

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 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.

Section 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.