MANILA, Philippines - A second bill seeking to improve regulation of the credit card industry has been filed in Senate.
Sen. Ramon Revilla Jr. has filed Senate Bill 2492, which seeks to provide more transparency on interests and charges that consumers pay credit card firms.
The bill amends Republic Act 8484, an 11-year old law, which Revilla said, is limited and only regulates the issuance of access devices.
Revilla said Senate Bill 2492 requires more transparency on the part of credit card companies to ensure that consumers are aware of the scope of their obligations.
Revilla said banks and card issuers often use Central Bank Circular 905-82 in charging their customers interest rates of more than 1%. The circular, which was issued in 1982, effectively removed the ceiling on interest rates for both secured and unsecured loans.
"Under the proposed bill, the interest rates on any credit purchases and cash advances made through such facility shall in no case be higher than 1% per month or 12% per annum, without compounding. Surcharges or penalties shall be limited to a ceiling of 1% per month, without compounding," said Revilla.
The senator cited a Supreme Court decision that said rates higher than 1% per month or 12% per year "are excessive, iniquitous, unconscionable and exorbitant. Such stipulations are void for being contrary to morals, if not against the law."
"Although the SC addressed the argument, it is our responsibility as legislators to provide the proper framework for these companies that offer credit cards and other access device transactions," Revilla said.