Speaker Gloria Macapagal Arroyo has pushed for the enactment of the bill ensuring that appropriate mechanisms are in place to protect the interest of financial consumers.
This would be under conditions of transparency, fair, and sound market conduct and just, reasonable, and effective handling of financial consumer disputes that are aligned with global best practices.
The Arroyo-led House approved on third and final reading House Bill 9054 or the proposed “Financial Consumer Protection Act.”
The bill, authored by Rep. Henry Ong of Leyte, got the support of all 164 House Members during the plenary voting late last week.
The bill declares that the mechanisms reinforce confidence in the financial market and foster stability in the Philippine financial system.
House Bill 9054 got the support of all 164 House Members during the plenary voting.
The bill mandates the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, and Insurance Commission to enforce the provisions of the measure on all financial entities they supervise or regulate.
The Cooperative Development Authority shall oversee the implementation of the measure through cooperative offering services such as savings and credit, provided that the implementation by insurance cooperatives shall be overseen by the IC.
The bill empowers financial regulators to 1) formulate their own standards and rules applicable to a specific financial product within their jurisdiction, 2) issue their respective rules of procedure, and 3) conduct off-site surveillance and on-site examination on their respective supervised financial entities to ascertain compliance with the measure.
They shall also be empowered to require supervised financial entities and their third-party agents or service providers to submit reports or documents as needed.
They may access relevant data about financial products, services, and markets from other government agencies in connection with market monitoring.
Financial regulators shall also be given the authority to impose enforcement actions on their respective supervised financial entities for non-compliance with the measure.
The duties and responsibilities of financial providers include formulation, implementation, and oversight of a Compliance Management System which shall provide the means by which a financial provider may identify, measure, monitor, and control consumer protection risks inherent in its operations.
They shall also determine if a cooling-off period is necessary for a regulated product or service.
If a cooling-off period is found necessary, the relevant financial regulator shall adopt a clear cooling-off policy to allow a client to consider the costs and risks of investing in the product or service, free of any pressure or interference from the financial provider, its employees or agents.
During the cooling-off period, the financial consumer may cancel or return the contract without penalty, provided that the financial provider shall be allowed to recover the processing fees incurred.
Financial providers shall also adopt disclosure principles in their communications with financial consumers using clear and concise language understood by their target clients.
In addition, financial providers shall establish a single consumer assistance unit to assist financial consumer on financial transactions concerns for free.
This shall include handling of complaints, inquiries, and requests.
The measure further provides for the prepayment of loans and other credit accommodation. A borrower may, at any time prior to the agreed maturity date prepay, in whole or in part.
This is provided, however, that any cost or fees charged to the borrower for such pre-payment shall be disclosed.
In cases involving bundling of products, the measure mandates that when a borrower is obliged by the financial provider to purchase any product that includes insurance policy as a pre-condition for obtaining a loan from the financial provider, the borrower should be informed of the right to choose the insurance provider.