Article 145Supplement v1, p. 145

COMMERCIAL LAWS SUPPLEMENT

continuing

competence

and

capability

to

provide

updated negative and positive credit information; to

enable

the

Corporation

to

relay

credit

information

electronically as well as in writing to those authorized to

have access to the credit information system; and to

insure accuracy of collected, stored and disseminated

credit information. The Corporation shall implement a

borrower’s

identification

system

for

the

purpose

of

consolidating credit information.

(j) The provisions of any general or special law to the

contrary

notwithstanding,

the

importation

by

the

Corporation of all equipment, hardware or software, as

well as all other equipment needed for its operations shall

be fully exempt from all customs duties and from all

other taxes, assessments and charges related to such

importation.

(k) The Corporation shall have its principal place of

business in Metro Manila, but may maintain branches in

such other places as the proper conduct of its business

may require.

(l) Any and all acquisition of goods and services by the

Corporation shall be subject to Procurement Laws.

(m) The national government shall continue to hold sixty

percent (60%) of the common shares for a period not to

exceed five (5) years from the date of commencement of

operations of the Corporation. After the said period, the

national government shall dispose of at least twenty

percent (20%) of its stockholdings in the Corporation to

qualified investors which shall be limited to industry

associations

of

banks,

quasi-banks

and

other

credit-related

associations,

including

associations

of

consumers. The national government shall offer equal

equity participation in the Corporation to all qualified

investors. When the ownership of the majority of the

common voting shares of the Corporation passes to

private

investors,

the

stockholders

shall

cause

the

adoption and registration with the SEC of the amended

articles of incorporation within three (3) months from

such transfer of ownership.

Section 6. Confidentiality of Credit Information . - The

Corporation,

the

submitting

entities,

the

accessing

entities, the outsource entities, the special accessing

entities and the duly authorized non-accessing entities

shall

hold

the

credit

information

under

strict

confidentiality and shall use the same only for the

declared purpose of establishing the creditworthiness of

the borrower. Outsource entities which may process and

consolidate basic credit data are absolutely prohibited

from releasing such data received from the Corporation

other than to the Corporation.

The accreditation of an accessing entity, a special entity

and/or

an

outsource

entity

which

violates

the

confidentiality

of,

or

which

misuses,

the

credit

information

accessed from the Corporation, may be

suspended or revoked. Any entity which violates this

section may be barred access to the credit information

system and penalized pursuant to Section 11 of this Act.

The

Corporation

shall

be

authorized to release and

disclose

consolidated

basic

credit

data

only

to

the

Accessing Entities, the Special Accessing Entities, the

Outsource Entities and Borrowers. Basic Consolidated

basic credit data released to Accessing Entities shall be

limited to those pertaining to existing Borrowers or

Borrowers

with

pending

credit

applications.

Credit

information shall not be released to entities other than

those enumerated under this Section except upon order

of the court.

Section

7.

Educational

Campaign .

-

A

continuing

nationwide educational campaign shall be developed

and undertaken by the Corporation to promote the

benefits of a credit information system to the economy;

to

create

awareness

on

the

rights

of

consumers/borrowers

to

access

their

credit

reports

collected, stored and disseminated by the Corporation; to

disseminate the rights of the borrowers to dispute any

incorrect/inaccurate credit information in the database

file of the Corporation; to familiarize consumers of the

procedure in collecting, storing and disseminating credit

information of borrowers by the Corporation; and to brief

consumers of other related information.

Section 8. Rules and Regulations . - For purposes of

creating a healthy balance between the need for reliable

credit

information

and

safeguarding

consumer

protection, ensuring free and healthy competition in the

industry,

the

SEC,

in

coordination

with

relevant

government agencies and existing industry stakeholders,

shall issue the implementing rules and regulations (IRRs),

which shall be reviewed, revised and approved by the

Oversight

Committee

to

ensure

consistency

and

compliance with the provisions of this Act, embodying

among others:

(a) The basic credit data shall be limited or confined in

form and content to an objective and factual information

and shall exclude any subjective information or opinion;

(b)

Restrictions

on

the

use

and

transfer

of

credit

information;

(c) Rights of the borrowers to access their respective

credit information and to dispute the factual accuracy of

such credit information;

(d) Requirements and standards for the establishment of

the Corporation including, but not limited to, ownership,

industry

representation,

independent

directors

and

process of nomination of directors;

(e) Accreditation standards for submitting entities and

special accessing entities and non-accessing entities;

(f) Sanctions to be imposed by the Corporation on:

(i) The submitting entities for non-submission of reports

and for delayed and/or erroneous reporting;

(ii)

Accessing

entities,

special

accessing

entities,

outsource entities and duly authorized non-accessing

entities, for breaches of the confidentiality of misuse of,

the

credit

information

obtained

from

the

credit

information system; and

(iii) Violations of other applicable rules and regulations:

Provided , That these administrative sanctions shall be in

the form of fines in amounts as may be determined by

the Corporation but in no case to exceed Thirty thousand

pesos (PhP30,000.00) a day for each violation, taking into

consideration the attendant circumstances, such as the

nature

and

gravity

of

the

violation

or

irregularity.

Imposition of administrative sanctions shall be without

prejudice to any criminal and other sanctions as may be

applicable under this Act and relevant laws;

(g)

Suspension

or

cancellation of the rights of any

Accessing Entity or Special Accessing Entity to access

Credit Information from the Corporation; Provided , That

the

SEC

in

coordination

with

relevant

government

agencies and existing industry stakeholders, may issue

subsequent

regulations

consistent

with

the

IRR

as

approved by the Congressional Oversight Committee.

In addition, the SEC may regulate access to the credit

information system as well as the fees that shall be

collected by the Corporation from the Accessing and

Special Accessing Entities, taking into consideration the

policy of lowering the cost of credit, promoting fair

competition, and the need of the Corporation to employ

state-of-the-art technology; and

(h) The basic credit data about a borrower shall be limited

to

credit

information

existing

on

the

date

of

the

enactment of this Act and thereafter.

Section 9. Congressional Oversight Committee . - There

is hereby created a congressional oversight committee,

composed of seven (7) members from the Senate and

seven (7) members from the House of Representatives.

The Members from the Senate shall be appointed by the

Senate

President

with

at

least

three

(3)

Senators

representing the minority. The Members of the House of

Representatives shall be appointed by the Speaker with

at least three (3) members representing the minority.

© Compiled by RGL

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