With mounting consumer credit card complaints, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier is reminding banks and credit card issuers to strictly follow rules that protect credit card users.
In a BSP Circular Letter (No. CL-2021-008) that Fonacier signed on January 14, the BSP issued a reminder to all banks on the strict compliance with the prevailing regulations on credit cards and financial consumer protection, as well as the implementing rules and regulations of Section 4 (aa) of Republic Act No. 11649 or The Bayanihan to Heal as One Act, and Section 4 (uu) of RA No. 11494 or The Bayanihan to Recover as One Act.
“The BSP reminds all BSP-supervised financial institutions operating as credit card issuers to strictly comply with the regulations governing credit card operations and consumer protection (under the law and BSP circulars on the matter),” according to Fonacier in the circular letter.
“This is in view of the high number of credit card-related complaints received,” she said.
On November 3, 2020, banks and credit card issuers adopted ceilings on interest rate, finance charges and fees on all credit card transactions, which should not exceed 24 percent annually or two percent per month. Also, the monthly add-on rate for credit card installment loans should not exceed one percent per month and the processing fee on the availment of credit card cash advances should not exceed P200 per transaction.
The BSP, as per its supervisory authority over credit card issuers under the Credit Card Industry Regulation Law, wants responsible credit card lending in the country with the implementation of interest rate ceilings.
The BSP will be reviewing credit card rates and fees every six months.
This is not the first time the BSP issued memos for banks and other lending institutions as a reminder to comply with rules or to clarify sections under the Bayanihan laws on interbank loans and bank borrowings.