QuestionsQuestions (BSP CIRCULAR NO. 192)
An NSSLA is any non-stock, non-profit corporation that accumulates members’ savings and uses the accumulations for loans to members, mainly to service household needs by providing long-term financing for home building/development and personal finance. It may also engage in a death benefit program exclusively for members.
It means the NSSLA cannot transact with the general public and must accept deposits and grant loans only to members from a defined group. The group may include: (1) employees/officers/trustees of one company including member-retirees; (2) government employees belonging to the same office/branch/department including member-retirees; and (3) immediate family members up to the second degree of consanguinity/affinity of those persons.
Yes. NSSLAs whose articles and by-laws were approved/registered prior to the effectivity of R.A. No. 8367 may be allowed to continue as such, even if membership coverage is broader or narrower than the defined concept.
They shall not be registered with the SEC unless accompanied by a certificate of approval from the Monetary Board.
The articles of incorporation and by-laws (in prescribed forms) must be submitted to the Monetary Board through the BSP’s supervising and examining department, with a covering application for approval signed by a majority of the Board of Trustees and verified by one of them. The application must include items such as names/addresses of incorporators, trustees and officers (with statement of character/experience/fitness), an itemized statement of estimated first-year receipts/expenditures, a P1,000 filing fee, and other information required by the Monetary Board.
Denial may be based on: (1) NSSLA organized for a purpose other than to engage in legitimate NSSLA business; (2) unsound financial program; (3) proposed members are adequately served by existing NSSLAs; and (4) other reasons the Monetary Board considers sufficient.
Before transacting business, it must procure a certificate of authority from the Monetary Board. After due notice and hearing, the Monetary Board may revoke or suspend the certificate for a determined period if solvency is imperiled by losses/irregularities or if it willfully violates R.A. No. 8367, the rules, or pertinent law/regulation.
Combined capital accounts must not be less than 10% of risk assets. Risk assets are total assets minus specified non-risk items such as cash on hand; BSP/Republic of the Philippines evidences of indebtedness fully guaranteed by the Republic; loans covered by holdout/assignment of deposits in the lending NSSLA held in the Philippines; depreciated office premises; depreciated furniture/fixtures/equipment; real estate mortgage loans insured by HIGC to the extent insured; and other non-risk items authorized by the Monetary Board.
The Monetary Board may limit or prohibit distribution of net profits and require part/all be used to increase capital accounts until the requirement is met. It may also restrict or prohibit new investments (except purchases of authorized evidences of indebtedness under Sec. 4116S) if the deficiency justifies it.
Every NSSLA must create a withdrawable share reserve consisting of 2% of the total capital contributions of members. The amount corresponding to this reserve must be set up and invested in bonds/evidences of indebtedness of the Republic of the Philippines or its subdivisions/agencies/instrumentalities fully guaranteed by the Republic, and BSP evidences of indebtedness.
NSSLAs cannot pay dividends/distribute profits if: (1) the withdrawable share reserve required under Sec. 4117S is less than required or would be reduced below it by the payment; (2) the capital-to-risk assets ratio is below the required level under Sec. 4116S; and (3) the surplus reserve for ledger discrepancies (Sec. 4118S) has not been resolved—i.e., it cannot be reverted for dividends unless the discrepancy ceases to exist.
A trustee must be a member in good standing and have the qualifications and none of the disqualifications required by law and BSP rules. Minimum qualifications: at least 21 years old at election; and at least high school graduate or at least one year experience in a related field, or completion of BSP training in banking operations.
Examples include: (1) conviction judicially or administratively of an offense involving moral turpitude, or judicial declaration of insolvency/spendthrift/incapacity to contract; (2) willful failure/refusal to comply with BSP/MBO orders or irregularities or unsafe/unsound unlawful conduct as determined by the Monetary Board in BSP-supervised institutions; (3) absenteeism—absent more than 50% of regular board meetings over a two-year period (applies to immediately succeeding election); (4) delinquency in paying obligations (defined as past due for at least 3 months under specified criteria).
Unless authorized, spouses or relatives within the second degree of consanguinity/affinity of a person holding specified top/officer positions are disqualified from holding/elected/appointed to those positions in the same association. It does not affect those already serving as of Aug. 11, 1975, but the exception applies only while they continue to serve uninterruptedly.
All NSSLAs must submit biodata/list of their incumbent trustees and officers to DTBNBFI in the prescribed form within 30 days after calendar year-end or within 15 days following the creation/filling up of a vacancy.
They cannot receive or be paid commissions/emoluments/gratuities/rewards based on the volume/number of loans or on interest/fees collected. Salaries are allowed; commissions to agents are allowed; and bonuses are allowed if based on profits, not loan volume or interest/fees. Any increase in compensation (any form) in excess of 10% per annum for trustees/trustee-officers requires BSP approval.
No NSSLA shall make or purchase any loan/investment not authorized under R.A. 8367. Any trustee/officer/employee who knowingly makes/purchases or knowingly consents is personally liable to the NSSLA for the full amount of the unauthorized loan/investment.
Savings deposits may be opened with minimum of P100. Withdrawal is through a duly accomplished withdrawal slip plus the depositor’s passbook. The NSSLA may require prior written notice not more than 30 days, and may limit withdrawals but not less than three (3) times a month; excess withdrawals may be charged a service charge approved by the BSP.
Prior to transaction, the creditor must furnish a clear written statement including: (1) cash/delivered price; (2) down payment/trade-in amounts; (3) difference between (1) and (2); (4) individually itemized non-financing charges not incident to credit extension; (5) total amount to be financed; (6) finance charges in pesos and centavos; and (7) the percentage finance charge bears to total amount financed as a simple annual rate on the outstanding unpaid balance.