Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno could not emphasize more strongly how crucial the proposed bills on consumer protection are to ensure integrity and trust in the financial system.
“These (pro-consumer bills) are seen to further strengthen the trust and confidence of the public in the financial system. It also espouses transparency, disclosure, responsible pricing and fair treatment,” Diokno said Friday, referring to the proposed Financial Consumer Protection Act (FCPA), one of BSP’s legislative priority for the 18th Congress.
So far, House Bill No. 6768 or “An Act Affording More Protection to Consumers of Financial Products and Services” has already been approved on third and final reading last June 2, while Senate Bill Nos. 60, 534, 1329, 1335, 1739 and 2287 have been filed and referred to the Senate Committee on Banks, Financial Institutions and Currencies.
Diokno said the pending bills will allow hearings on money claims of financial consumers against financial service providers, and help consumers recover “justified losses” in a “speedy manner.”
“Financial regulators (namely the BSP and Securities and Exchange Commission) can conduct summary hearings on payment or reimbursement of sums of money,” added Diokno during his weekly press briefing.
This additional power or authority is critical, he added, since the BSP is pushing for the digitalization of financial services.
The proposed law also gives BSP and other financial regulators such as the SEC, the Insurance Commission, and the Cooperative Development Authority, the power to issue rules and regulations not only to conduct hearings on consumer complaints but also enforce action such as restriction on the imposition of excessive or unreasonable interests, fees or charges.
“The legislative measure also requires financial service providers to install monitoring systems to ensure compliance with the law and identify risks inherent in their operations,” said Diokno.
“The BSP (jointly with other financial regulators) is closely coordinating with the Senate Committee on Banks, Financial Institutions and Currencies; and the Sub-Committee headed by Senator (Sherwin) Gatchalian to expedite the passage of the bill,” he also said.
The FCPA covers all financial products and services, and it also institutionalizes consumer protection standards and promotes transparent and responsible pricing, fair and respectful treatment of clients privacy, as well as client data protection.
The proposed law applies to all financial products and services offered by any financial institution, including digital financial products/services, savings, credit, insurance, pre-need and the products of health maintenance organizations; investments, payments, remittance and investment advisers.
“(The) FCPA ensures that financial service providers adhere to consumer protection standards of fair and respectful treatment of clients, transparency, privacy and protection of client data and access to a redress mechanism,” said Diokno. “It also provides duties that must be followed by financial service providers.”
Under the FCPA, the BSP and other financial regulators have the extra authority to craft rules, to have stricter market surveillance and examination, and market monitoring.
“Financial regulators can restrict imposition/collection of excessive or unreasonable interests, fees or charges, disqualify or suspend erring directors, officers or employees, impose fines or penalties, issue cease and desist order or suspend operations in relation to a particular financial product as may be warranted,” said Diokno. The proposed legislation covers transactions such as undispensed ATM withdrawal, email phishing, and non- disclosure of fees and charges, he added.