The House of Representatives of Philippines has passed a bill expanding the power of the central bank to regulate all credit card issuers.
House Bill 5417, the proposed Philippine Credit Card Industry Regulation Law, will mandate Bangko Sentral ng Pilipinas (BSP) to supervise all credit card issuers and impose rules of conduct and standards of operation while imposing penalties for violation.
The new law, which seeks to protect and educate credit cardholders, will encourage for an efficient risk management system besides making consumer credit readily available to all Filipinos under fair consumer practices.
HB 5417 will require the credit card issuers to be transparent in their computation of all charges and fees and will bar them from imposing over-the-limit fees without the consent of the cardholder.
The bill will permit a credit card issuer to adopt legally permissible means to collect amounts due but will deter it from harassing, abusing or oppressing any person in connection with the collection of any credit card debt.
Violation of the law or instructions issued by the Monetary Board will prosecute erring credit card issuers and acquiring banks under the provisions of Section 37 of Republic Act 7653, known as the "New Central Bank Act," with chances of imprisonment of two to 10 years, or a fine of PHP50,000 ($1,128.4) to PHP200,000 ($4,513.7), or both, at the discretion of the court.
The House Committee on Banks and Financial Intermediaries chairman Sonny Collantes said: "Inspite of this situation, data on card holders imply that consumers still rely on plastic money in times of dire need and for emergency expenditures.
"Moreover, the various methods employed by credit card companies to market and promote credit cards at times inhibit the consumers to scrutinize the terms, conditions and sanctions that will be imposed for delayed payments."