The Bangko Sentral ng Pilipinas (BSP) has issued Circular No. 754 series of 2012, which reflects updated rules on the implementation of the Truth in Lending Act to enhance loan transaction transparency for Non-Bank Financial Institutions under BSP supervision such as non-stock savings and loan associations (NSSLAs).
Under the new rules, NSSLAs are required to charge interest based on the outstanding balance of a loan at the beginning of an interest period. The Effective Interest Rate (EIR), defined in accordance with the Philippine Accounting Standards as the rate that exactly discounts estimated future cash flows through the life of the loan to the net amount of loan proceeds, should be calculated based on standards for discounted cash flow models. The Effective Annual Interest Rate (AIR) and Effective Monthly Interest Rate (MIR), as well as the Monthly Contractual Rate shall be disclosed on loan documents and marketing materials/presentations. The loan documents may be enhanced to improve client information.
The new rules also require a standard format of disclosure, a copy of which should be furnished to every borrower to ensure that he or she is provided with the necessary information about his or her loan in a manner that is simple and easy to understand. The disclosure statement shall contain the following minimum information: total amount to be financed; finance charges and all other charges incident to the loan; net proceeds of the loan; schedule of payments; and percentage that the finance charge bears to the total amount to be financed expressed as an EIR.
These new set of rules, which are effective July 1, 2012, are intended to upgrade transparency and disclosure practices of the entire credit-granting industry, and to ensure that borrowers are well-informed and protected.
AFPSLAI President & CEO, LtGen Cardozo M Luna AFP (Ret), turned over the Association’s donation of one-multi-cab to Northern Luzon Command (NOLCOM) last June 14, 2012.
Accepting the unit on behalf of the Command was NOLCOM Commander, LtGen Anthony J Alcantara AFP. NOLCOM is located at Camp Servillano Aquino in Tarlac City, which has an area of around 486 hectares. He said that the personnel and their dependents will now have an alternative means of transportation in going to and from the offices/units inside the camp. A minimal fare of
P5.00 per ride is being proposed by camp officials in order to cover expenses in relation to the operation of the vehicle such as gas and maintenance.
As a way of rewarding AFPSLAI’s loyal member-borrowers, the Association released a total of
P150M in loan rebates to all borrowers of Salary, Multi-Purpose, Pension, and Emergency Loans with updated loan and interest payments for the whole year of 2011. The amount is actually P50M more than what was released in June 2011.
Loan rebates were credited to the borrowers’ Savings Deposit Account (02 account) last June 4, 2012. The amount of rebates varies per borrower depending on the respective interest payments remitted to the Association for 2011.
AFPSLAI has always been committed to giving its earnings back to its members through dividends, better rates on savings, lower rates on loans, lower fees, and loan rebates.