Law Summary
Purpose of BSP Circular No. 845-14
The purpose of BSP Circular No. 845-14 is to clarify the definition of pre-approved credit cards in the Philippines and to prohibit the issuance of such cards without prior application. This circular aims to regulate the practices of credit card issuers and protect consumers from unsolicited credit cards.
Entities Involved
- Bangko Sentral ng Pilipinas (BSP): The central bank of the Philippines responsible for issuing regulations and guidelines for financial institutions.
- Credit Card Issuers: Financial entities supervised by the BSP that offer credit card services to consumers.
Definition of Pre-Approved Credit Cards
The circular defines pre-approved credit cards as unsolicited credit cards issued by credit card issuers to consumers who have not applied for such credit cards. This means that credit card issuers cannot send credit cards to consumers without their prior application or request.
Acts Tantamount to Issuing Pre-Approved Credit Cards
The circular includes appendices that list acts tantamount to the act of issuing pre-approved credit cards. These acts include:
- Sending credit cards without prior application or written request
- Sending unsolicited calls requesting updated information
- Sending credit cards as free offers
- Sending credit cards enclosed in mails
These acts are considered equivalent to issuing pre-approved credit cards, regardless of any contrary stipulations in the contract.
Amendments to MORB and MORNBFI
The circular amends the Manual of Regulations for Banks (MORB) and Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) to include the definition of pre-approved credit cards and application. These amendments ensure that the regulations regarding pre-approved credit cards are incorporated into the existing regulatory frameworks for banks and non-bank financial institutions.
Prohibition on Issuance of Pre-Approved Credit Cards
The circular enhances the regulation that prohibits the issuance of pre-approved credit cards by all BSP supervised financial entities with credit card operations. It emphasizes that the provisions of the circular shall prevail over any contrary stipulations in the contract. This means that credit card issuers must comply with the regulations outlined in the circular and cannot issue pre-approved credit cards without prior application.
Effective Date of the Circular
BSP Circular No. 845-14 takes effect fifteen days following its publication in the Official Gazette or a newspaper of general circulation. This means that credit card issuers must comply with the regulations outlined in the circular within fifteen days of its publication.
