Article 88Supplement v1, p. 88

COMMERCIAL LAWS SUPPLEMENT

a) interest or time price differential and any amount

payable

under

point

or

other

system

of

additional

charges;

b) collection fees which include finder's fees or similar

charges;

c) credit investigation fees;

d) notarial fees, if any;

e)

premium or other charges for any guarantee or

insurance protecting the creditor against the obligor's

default or other credit loss. The implementing agency

shall determine what items shall be exempted from the

computation of the finance charges.

ARTICLE 133. Determination of Simple Annual Rate . —

The simple annual rate applicable to any extension of

consumer credit shall be determined in accordance with

the

rules

and

regulations

promulgated

by

the

implementing agency.

ARTICLE 134. Delinquency Charges . — With respect to a

consumer credit transaction other than one pursuant to

an open-end credit plan, the parties may agree to a

delinquency charge on any installment not pain in full on

or before the tenth day after its scheduled or deferred

due date.

ARTICLE

135.

Deferral

Charges .

—

The

parties in a

consumer credit transaction may at any time agree in

writing to a deferral of all or part of one or more unpaid

installments and the creditor may make and collect a

charge

which

shall

not

exceed

the

rate

previously

disclosed pursuant to the provisions on disclosure. A

deferral

charge

may

be collected at the time it is

assessed.

ARTICLE 136. Finance Charge on Refinancing . — The

parties may agree on a finance charge in an open-end

credit plan based on the amount financed resulting from

the refinancing or consolidation at a rate not exceeding

that

permitted

by

the

rules

promulgated

by

the

implementing agency.

ARTICLE 137. Right to Prepay . — The person to whom

credit is extended may prepay in full or in part, at any

time

without

penalty,

the

unpaid

balance

of

any

consumer credit transaction.

ARTICLE

138.

Rebate

on

Prepayment .

—

Upon

prepayment

in

full

of

the

unpaid

balance

of

a

precomputed consumer credit transaction, refinancing or

consolidation, an amount not less than the unearned

portion of the finance charge calculated according to this

Article shall be rebated to the person to whom credit is

extended.

The

unearned

portion

of

the

precomputed

finance

charge

on

consumer

transactions

repayable

in

substantially equal successive installments shall be equal

to at least that portion of finance charge which the sums

of the installment balances of the obligation scheduled to

be outstanding after the installment date nearest the

date of prepayment bears to the sum of all installment

balances originally scheduled to be outstanding under

the obligation.

For the purpose of determining the installment date

nearest the date of prepayment when payments are

monthly, any payment made on or before the fifteenth

day following an installment due date shall be deemed to

have been made as of the installment due date, and if

prepayment occurs after the fifteenth day, it shall be

deemed

to

have

been

made

on

the

succeeding

installment due date. This method of calculating rebates

may be referred to as the "rule of 78" or "sum of the digits"

method.

The implementing agency may promulgate and adopt

rules and regulations with respect to other precomputed

consumer credit transactions.

ARTICLE

139.

General

Requirement

on

Credit

Cost

Disclosure . — Each creditor shall disclose, in accordance

with the regulations of the implementing agency, to each

person

to

whom

consumer

credit

is

extended, the

disclosures required by this Act.

If there is more than one obligor, a creditor need not

furnish a statement of information required under this

Act to more than one of them.

ARTICLE 140. Credit Sale, Required Disclosures . — Any

creditor extending a consumer credit sale other than one

pursuant to an open-end credit plan shall disclose in a

statement

to

the

extent

applicable,

the

following

information:

a) the cash price or delivered price of the property or

service to be acquired;

b) the amounts, if any, to be credited as down payment

and/or trade in;

c) the total amount to be financed or the difference

between the amounts set forth under paragraphs (1) and

(2);

d) the charges, individually itemized, which are paid or to

be

paid

by

such

person

in

connection

with

the

transaction but which are not incident to the extension of

credit;

e) the finance charge expressed in terms of pesos and

centavos;

f) the percentage that the finance charge bears to the

total amount to be financed expressed as a simple annual

rate on the outstanding balance of the obligation;

g) the effective interest rate;

h) the number, amount and due dates or periods of

payments scheduled to repay the indebtedness; and

i) the default, delinquency or similar charges payable in

the event of late payments.

ARTICLE 141. Required Disclosure on Open-end Credit

Plan . — Before opening any account under an open-end

consumer credit plan, the creditor shall disclose, to the

extent applicable, the following information:

a) the conditions under which a finance charge may be

imposed, including the time period, if any, within which

any credit extended may be repaid without incurring a

finance charge;

b) the method of determining the balance upon which a

finance charge may be imposed;

c) the method of determining the amount of the finance

charges,

including

any

minimum

or

fixed

amount

imposed as a finance charge;

d) where one or more periodic rates may be used to

compute a finance charge, each such rate, the range of

balances to which it is applicable, and the corresponding

simple annual rate;

e) the conditions under which the creditor may impose a

security lien and a description of the goods to which such

lien may attach.

The implementing agency shall prescribe regulations

consistent

with

commonly

accepted

accounting

standards to carry out the requirements of this Article.

ARTICLE 142. Required Disclosures on Consumer Loans

Not

Under

Open-End

Credit

Plan .

—

Any

creditor

extending a consumer loan or in a transaction which is

neither a consumer credit sale nor under an open-end

consumer

credit

plan

shall

disclose,

to

the

extent

applicable, the following information:

a) the amount of credit of which the debtor will have the

actual use, or which is or will be paid to him or for his

account or to another person on his behalf;

b) all charges, individually itemized, which are included in

the amount of credit extended but which are not part of

the finance charge;

c) the total amount to be financed or the sum of the

amounts referred to in paragraphs (a) and (b);

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