QuestionsQuestions (EXECUTIVE ORDER NO. 107)
It is a BSP issuance (dated 14 May 2008) enjoining banks and financial institutions under BSP supervision to strictly comply with R.A. No. 3765, the Truth in Lending Act.
For banks, it references Sec. X307 of the Manual of Regulations for Banks (MORB). For non-bank financial institutions, it references Sees. 4309Q, 4101N, and 4307S of the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI).
A clear written statement setting forth specified information to the extent applicable and in accordance with BSP rules and regulations.
1) Cash price/delivered price; 2) down payment and/or trade-in amounts; 3) difference between items (1) and (2); 4) charges individually itemized not incident to extension of credit; 5) total amount to be financed; 6) finance charge in pesos and centavos; 7) finance charge as a simple annual rate on outstanding unpaid balance.
The contract covering the transaction or any other document to be acknowledged and signed by the debtor must indicate the above seven (7) items of information.
Any additional charges, if any, to be collected in case certain stipulations in the contract are not met by the debtor.
They must post (a) an abstract of the provisions of R.A. No. 3765 in a prescribed format and (b) information regarding interest and other charges on loans.
It must include: (1) type of loan; (2) simple annual rate of interest; (3) manner of interest payment (e.g., whether collected in advance); and (4) other fees and charges imposed by the bank in connection with the loan.
In a format sixty (60) cm wide and seventy-five (75) cm long.
Liability is P100 or an amount equal to twice the finance charged required, whichever is greater, except that liability shall not exceed P2,000 on any credit transaction.
The creditor must provide the clear written statement before the credit transaction is finalized/consummated; late disclosure would violate the Act.
When an item does not apply to the specific credit transaction (e.g., if there is no down payment/trade-in or no specific charges not incident to the extension of credit), disclosure is required only to the extent that the item is applicable.
The finance charge must be disclosed in pesos and centavos, and also as a simple annual rate on the outstanding unpaid balance of the obligation.
It aims to ensure transparency in credit transactions by requiring standardized, clear disclosures so borrowers can understand total financing, charges, and finance charges before signing/consummating.
Monetary Board Resolution No. 356 dated 27 March 2008.