BMP

a No. 5417

%mi^tts^ o f f l^e ptfittj^tiBS

—s
Begun and held in Metro Manila, o n Monday, tlie twenty-seventh
d a y o f Jiely, t w o t h o u s a n d fifteen.

(REPUBLIC ACT NO. 10870]

AN ACT REGULATING THE PHILIPPIN'E CEEDIT
CARD INDUSTRY
Be it enacted by the Senate and Hoitse of Representatives of the
Philippmes in Cong^-ess assembled:
SECTION i. Short Title. - This Act shall be known as
"Philippine Credit Card Industry Regulation Law".
SEC. 2. Declaration of Basic Policy. - It is the policy
the State to foster the development of the credit ca
an indispensable tool in making consunter credit read
to all Filipinos under conditions of &ir and sound
credit practices which are aligned with global best
promoting an e^cient p a y m e n t system and in encour
competition and faansparency that support a more e^ct
of credit card services. To ensure the vibrancy and
the credit card industry, the State shall institut
mechanisms to protect and educate credit cardholders
SEC. 3. Scope and Coverage. — This Act shall govern a
credit card issuers, acquirers and all credit card t
 3
SEC. 4. Supervision. - The Bangko Sentral ng PiJipinas Credit card ref
(BSP) shall euperviee all credit card issuers (g)and
intended acquirers.
for the p
Supervision shaU include the following: services on credit;
(a) The issuance of rules of conduct or the (Ji) establishment
Credit car
of standards of operation for uniform application that to all
offers institu
the us
or functions covered, and the imposition of penalties in csise
noncompliance therewitl^' (i) Credit card limi
(b) Tlie conduct of examination as determined for purchases,the cas
Monetary Board to determine compliance with charges, byservice
and fee
regulations; charged
laws to the cred
(c) Oversight to ascertain that laws andpayment regulations
0") Default orare delin
complied vntli; and of an amou
minimum^ayment req
(d) Determining the reasonableness of fees least
andthree (3) biLU
charges
and the issuance of regulations on the same. ^) Finance charges
Act,
SEC. 5. DefinitioTi of Terms. ~ As used in thiscardholder on all
foUovi'ing terms are defined as follows: the terms
the and cond
of the credit card
(a) Acceleration clause refers to the provision in the
Installment-purch
contract betTveen the credit card issuer and the0)cardholder tha
payment
gives the credit card issuer tlie right to demand the for fullwhich
settl i
of the obligation in case of default or nonpayment of any
(m) Industry associ
amount due or for ai^r valid reason; of companies engag
OJ) Acquirer refers to the institution that credit and payment
accepts and
facilitates the processing of the credit card transaction
(n) Membership fe
which is initially accepted by the merchant;issuer levies for t
to other
(c) Balance transfer refersto the transfer of the balance membersli
annual
in a credit card account to another credit card account; membership f
(0) Minimum
(d) Billing cycle/billing period refers to the period of amou
time between billings. Billing cycles shallrefers comprise to the
at mini
leas
fifteen (15) days; pay on or before t
(^cle/billing peri
(e) Card association refers to any compai^' that provides
credit card network such as, but not limited (1) to, Outstanding
American
payment percentage
Express, VISA International, MasterCard International, JOB
International, Diners Club, and China Union Pay; (2) Any amount
installment
(f) Cash advances refer to cash obtained fcom the credit that i
card account in any manner availed by the cardholder;
(3) Any amount
 6
(4) AH past due amounts, if any; purchase if in t
(p) Outstanding balance refers to the amount toasbetorepaid the validi
as o£ statement cut-off date;
SEC. 9. Determi
(q) Statement cut-off date refers to the end date of a billing
Thereof. - Credit
cycle as determined by the credit card issuer, credit account
whenstanding
activities purchases, payments, charges) during the billing
credit limit tocy
are summarized; may thereafter i
of
(r) Statement of account or billing statement refers to
thetheaccount b
regular .statement listing of the purchases,changes: guidelines:
payments Provid
and
other debits and credits made to the credit card Provided,
account witl
the billing t^de; and be declined by t
cardliolder has
(s) Suppktnentary card or extension card refers to subject
a creditto the a
card issued to another person whose credit limit SEC. is coneohdate
10. Imposi
with the primary cardholder. charges and othe
' SEC. 6. Minimum Requirements for Risk Management time of the outs
System of Credit Card Issuers. - To effectively dehveramount of the ou
services
Vnd at the same time safeguard their interests, SEC. credit
the 11, Inform ca
issuer and acquirer must establish an appropriate issuer system
shall dis for
managing risk exposures arisuig from credit card operations.
cardliolders theSu
risk management system shall be documented in a complete and
concise manner, and shall cover the organizational (a)set-up
Financefor c
institution engaged in or unit handling the credit due date;card busine
its information management ^stem, as well as accounting poUcies
and procedures, internal and external functions,(b) andThe perce
interna
control system. amount to be fin
rate, as the ca
SEC. 7. Minimum Requirements for tlie Issuance of Credit
obhgation;
Cards. — Before issuing credit cards, credit card issuers mus
conduct know*your-c!ient (ICYQ procedures and exercise (c) The defau
proper
diligence in ascertaining that applicants possess delinquency-rela
good credi
standing and are iinancially capable of fulfilling payments: Provide
their cre
commitments. payment shall be
prescribed minim
be, inThat the
SEC. 8. Service Level Agreement. - There shaU.further,
the service level agreement between the acquiring banks and
outstanding bala
their partner merchants, a provision requiring merchants
amounts pcyable to
perform due diligence to establish the identityschemes, of the cardhold
if the
contains an acce
Notliing in tliis Act shall preclude a card issuer
of the fi-om
credit ca
verifying or seeking confirmation with the cardholder any
 6 7
(d) The method of determining the balance upon SEC. which
13. Changes
interest and/or delinquency charges may be imposed;- The cardliolder
to any change in
(e) The method of determining the amountbalance of interest
and the a
and/or deUnquency charges, including any minimum the cardholder
or fixed f
amount imposed as interest and/or delinquency charge;
have the right to
issuer
(i) Other fees, such as membership/renewal fees, subject to
processing fees, over-the-limit fees, collection fees, cred
Compliance wit
investigation fees and attorney's fees; reasonable time a
card issuers
(g) For transactions made in foreign currencies, for dualshou
currency accounts (peso and dollar billings), asSSC. weE 14. paymen
as Over-the
made by credit cardholders in any cm-rency other than the
breaches the bill cre
currency, the mamier of conversion from the transaction
transactioncurren may
and payment currency to Philippine pesos or credit billingcard currency
issu
which may be a defiiiition or general description of
prominently conversi
discl
,rates;
SEC. 15. Lost or
^ (h) A reminder to the cardholder in the biUing
lost orstatement,
stolen,
or its equivalent document, that payment of credit only the cardminimum
issue
amount due or any amount less than the total amount due / for
the bilUng cycle/billing period, would mean theSEC. imposition
16. Confideo
interest and/or other charges. A wiitton statement issuers, in the
their foll
of
form must be printed in the biUing statement - "Important
confidential the
Reminder: Paying less than the total amount the wiU increase
due following cir
the amount of interest you pay and the time it takes to rep
your balance"; and (a) When discl
the cardholder;
(i) Any other information that may be required by the
(b) When the c
BSP. or exchanged wit
The credit card issuer shall endeavor to association,
convey the or c
information in a manner that is understandable(c) the credi
to Upon orde
cardholder: Provided, That the items enumerated any above may be
government o
included in a billing statement on a quarterly ^U^ch basis
conditionsat th
minimum in tabular format. of tlie BSP;
SEC. 12. Compuiations to be Disclosed. - In addition to
the foregoing, a credit card issuer must, to the(d) extent disc
Whenpracti
necessary
provide a detailed explanation and a clear illustration of for the
manner by which all charges and fees are computed.to the credit
The BSP ca
shall determine the implementation date. cardholder;
 9
8
SEC. 21. Endorse
(e) When disclosure to third parties such as insurance
the Credit Card Issue
companieB is necessary for the sole purpose of insuring
issuer ehaU the
inforcr
card issuer from cardholder default or other credit loss,
of the collection an
cardholder from fraud or unauthorized charges; and
endorsement of th
(£) When disclosure to third parties is the prior
for the to the actu
purpose
investigating fraud or imauthorized activities full
or name
mitigatingofo
involving card issuance, use and acquiring.The requirement
endorsement of t
The recipient of information described included herein shallin the t
lilceVrise be bound to preserve confldentiaUty Provided,
of the That the
cardho
data. an account to onl
SEC. 17. Customer Assistance Unit. - A card issuer 22. Commu
SPC.shall
establish a customer assistance unit witliin Collection. - The cr
it^ organizat
which shall be responsible for providing prompt copimunicate
action for with
expeditious resolution of complaints; inquiries collection of any
and requests
the B S P in guidel
SEC. 18. Complaint on Billing Error or Discrepancy. - A
1 credit card issuer shall give cardholders up to SEC. 23. Due
thirty Dat
(30)
^ days from statement date to report ai^r error the contract,
or discrepan if
their billing statement. The credit card issuer weekends shall regu
andtake
within ten (10) business days from receipt of date
such automatic
isnotice.
tlirough any auth
centers of the cr
SEC. 19. Appropriate Manner of Collection. ~ A credit
card issuer may resort to all reasonable and to legally
the creditpermiss
car
means to collect amoxmts due them under the credit card
agreement: Provided, That in the exercise of its 24. Applicat
SEC.rights and
performance of duties, they must observe good a payment from a
faith, reasona
conduct and proper decorum and refrain fr'om interest
engagingrates info
unscrupulous acts. regular purchases
apply amounts in
A credit card issuer or collection agenttoshall the fees and c
not haras
abuse or oppress any person or engage in anythe highest
un&ir rate
practices,
may be defined by B S P rules and regulations,the in connection
next higherwi r
the collection of any credit card debt. Provided, That the
be the basis for
SEC. 20. Use of Third'Party Collection Agents. -Acredit
card issuer may engage qualified third party SEC. 25. Termin
service
providers/collection agents for the purpose cancel or termina
of assisting
rendering services in the administration of cardholder
the the credit ca ei
business including recovery of unpaid obligations for payment and of th
enforcement of rights against the cardholder. and deferred uist
 10 11
a one-time payment or on installments within a fixed periodSEC. of 31. Effectiui
time: Provided, further. That repayment ia installments (15) shalldays after its p
least two
oriy be generally subject to interest unless there is a violation of (2) national
the new agreament. Approved,
SEC. 26. Administrative Sanctions on Credit Card
Issuers. - The provisions of Section 37 of Repubhc Act No. 7663,
otherwise known as "The New Central Bank Act", shall be made
appUcable to any credit card issuer, acquirer, their directors and
officers including, but not limited to, the administrative sanctions
that may be imposed, without prejudice to the cruninal sanctions
F/I^.NKLINM. DRILF
agEiinst the culpable persons provided in Section 25 of this Act,
for any willful violation of this Act or any related rules, -esident of the S
regulations, orders or instructions issued by the Monetary P Board:
Provided, That in addition to the administrative sanctions that
may be imposed, the authority' of the credit card issuer to issueThis Act whic
credit cards may be suspended or cancelled by the BSP. Representatives
Representatives o
SEC. 27. Violation of this Act and Other Related Rules, the Senate on Febr
Regulations, Orders or Instructions. - A person who willfullywere concurred in
yiolates any provision of this Act or any related rules, May 23, 2016.
regulations, order or instructions, issued by the Monetary Board
shall be punished by imprisonment of not less than two (2) years
nor more than ten (10) years, or by a fine of not less than fifty
thousand pesos (PSO.OOO.OO) but not more than two hundred
thousand pesos (P200,000.00), or both, at the discretion of the
court. Secretary of the S
SEC. 28. Transitory Provision. - All existing credit card
companies that are not supervised by the BSP are hereby given
such reasonable time as the Monetary Board may determineApproved: in
order to comply with appUcable rules and regulations.
SEC. 29. Separability Clause. - If any provision or
section of this Act is held to be unconstitutional or invalid,
the other provisions or sections hereof which are not affected
thereby shall continue to be in full force and effect.
BENIGNO
SEC. 30. Repealing Clause. - AH other laws, decrees,
executive orders, proclamations and administrative regulations, President
O
or parts thereof inconsistent herewith are hereby repealed or
modified accordin^j^
Lapsed into law o r
Without m e Signatu
(n a c c o r d a n c e w i t h
?7 {^) o f t h e C o n