The Supreme Court has ruled in 3 landmark cases on credit cards that “interest rates of 3% per month or higher are excessive, iniquitous, unconscionable and exorbitant.” Citing this ruling, Congressman Jack Enrile of the 1st District, Cagayan has asked the Bangko Sentral ng Pilipinas or BSP what is the actual formula approved by BSP or banks are allowed to define the formula on interest rates on credit?
Enrile noted that despite the 3 landmark rulings by the Supreme Court in Imperial versus Jaucian in 2004; Chua versus Timan in 2008 and Macalinao versus BPI in 2009, still there are credit cards that charge 3-3.5% per month or a total of 42% per year?
Enrile asked: “Have credit card holders been informed of the consequences of paying only the “minimum amount due” as stated on their statement of accounts? Are they aware of how the interest rates charged on their outstanding balances are compute? Were they informed that the late payment charges will not only applied against their unpaid balances, but also to the purchases that they make until payment has been made?
The Credit Card Association has stated earlier that the Supreme Court decisions as being merely “rulings” and not “laws.” The young Enrile questioned this position taken by the Association saying “are not jurisprudence part and parcel of the law of the land? Because if you take it to the extreme, if these rulings are not applicable to all banks then the highest court of the land can, if we push the argument to the extreme, be accused of singling out certain banks, right?”
Enrile has asked the BSP to incorporate the decisions promulgated by the Supreme Court in the policies and procedures made by BSP so that we can prevent abuses made by banks pursuing marketing strategies at cut throat phase leading to totally setting aside the rights of consumes and merchants.
Promoting accountability, responsibility and disclosure in the banking industry is vital and should be the order of the day, added Enrile.