Bill protecting consumers, credit card firms moves to plenary

Consumers may soon be able to grasp how much interest and other financial charges would accrue to their credit card bills should they decide to pay only a portion of their total monthly obligations, the House Committee on Banks and Financial Intermediaries said in a statement Thursday. The committee has approved for plenary discussions a bill amending the disclosure requirements of credit card companies under Republic Act 8484 or the Access Devices Regulation Act of 1998. “The bill seeks to support and establish fair and sound consumer credit practices between consumers and credit card companies. A consumer that is sufficiently informed will be able to manage his finances well and avoid overspending and being charged of a huge debt," said Pasig City Representative Roman Romulo, who authored the bill. The measure also seeks to protect companies from doubts of overcharging as they have fully disclosed the penalties and charges to be paid by the credit card holder, Romulo said. “This would also result in a more disciplined credit card user which would minimize the risk of credit card company losses… [from] unpaid bills," Romulo said. The repayment information will spell out the number of months it would take to pay the entire amount of the balance if the consumer pays only the minimum monthly payments and if no further advances are made. According to the measure, the information should also include the amount of monthly payments to eliminate the outstanding balance in 36 months that encompasses the total cost of financing the revolving credit card dues including interest and charges for the three years. Earlier, Belinda Caraan of the Financial Consumers Affairs Group of the Bangko Sentral ng Pilipinas (BSP) said she supports the proposed measure as most of its provisions were also incorporated in the Circular that the BSP issued in December 2010. Some of the provisions in the central bank circular took effect last January 2011, while some will be implemented this May. However, Caraan also cited a concern involving sanctions on credit card issuers as some — being non-subsidiaries of banks — fall outside the ambit of BSP regulations,. Simon Calasanz, President of the Credit Card Association of the Philippines, asked the committee to extend the number of days in formulating the implementing rules and regulations to 180 days from 90 days as stated in the bill to give them ample time to amend the system. — VS, GMA News