Dissemination of Relevant Information Relative to "Truth in Lending Act" Disclosure Requirement (Corrected Copy)

CORRECTED COPY BANG}<() SENTIiAL N@ PILIPINAg OFFICE OF THE GOVERNOR ctRcutAR No. L052 Series of 2OL9 Subject: Dissemination of Relevant Information Relative to 'Truth in lending Act" Disclosure Requirement The Monetary Board, in its Resolution No. 1397 dated L2 September 2019, approved the amendments to the relevant provisions of the Manual of Regulations for Banks (MORB)/Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) to provide guidance to banks, quasi- banks (QAs1, Non-Stock Savings and Loan Associations (NSSLAs), pawnshops and non-bank financial institutions (NBFls) as well as banks/non-banks operating as credit card issuers in disseminating relevant information about the "Truth in Lending Act" through various channels of communication. Section 1. Section 306 of the MORB and Sections 43O7e/4307S of the MORNBFT are hereby amended to read as follows: "Section 3OGI4?07Ol4307S "TRUTH |N IENDING ACT" DISCLOSURE REQUIREMENT Banks/QBs/NSSLAs are required to strictly adhere to the provisions of R.A. No. 3765, otherwise known as the "Truth in Lending Act", and shall make the disclosure of the true and effective cost of borrowing an integral part of every credit transaction contract. xxx lnspection of contracts covering credit tronsoctions. xxx Dissemination ol Relevant lnlormation. Banks/QBs/NSSLAs shall ensure that all persons to whom credit is extended are well informed of the salient provisions of Republic Act No. 3765, otherwise known as the "Truth in Lending Act" as contained in the revised format of discfosure statement in Appendix 16/Q-11/S-4 through any acceptable medium of communication such as, but not limited to, posters, brochures, pamphlets, leaflets, educational videos, corporate websites, infographics and social media platforms. Said information must be conspicuously displayed and made available at all times, in physical or electronic format, to all persons to whom credit is extended by banks/QBs/NSSLAs subject to the consumer protection standards and social media risk management guidelines. Such medium of communication shall include an explicit notification that the disclosure statement in writing is a required attachment to the credit transaction contract which banks/QBs/NSSLAs shall provide all persons to whom credit is extended with a copy of said disclosure statement prior to the consummation of the credit transaction. Sqnctions ond penal provisions. xxx" A. Mabini 5i-, lv1'.;l rpllrr+! . iu t.:) r yj\rJfi.nsp.gilu.l

Section 2. Section 3L2 of the MORB is hereby amended to read as follows: "Policy Stotement. The Bangko Sentral shall foster the development of consumer credit through innovative products such as credit cards under conditions of fair and sound consumer credit practices. The Bangko Sentral likewise encourages competition and transparencyto ensure more efficient delivery of services and fair dealings with customers. xxx Informotion to be disclosed. xxx xxx Dissemination of Relevont lnformotion. Banks operating as credit card issuers shall ensure that all persons to whom credit is extended are well informed of the salient provisions of Republic Act No. 3765, otherwise known as the "Truth in Lending Act" as contained in the revised format of disclosure statementin Appendix 15 through any acceptable medium of communication such as, but not limited to, posters, brochures, pamphlets, leaflets, educational videos, corporate websites, infographics and social media platforms. Said information must be conspicuoushT displayed and made available at alltimes, in physical or electronic format, to all persons to whom credit is extended by banks operating as credit card issuers subject to the consumer protection standards and social media risk management guidelines. Such medium of communication shall include an explicit notification that the disclosure statement in writing is a required attachment to the credit transaction contract which banks operating as credit card issuers shall provide all persons to whom credit is extended with a copy of said disclosure statement prior to the consummation of the credit transaction. Accruol of interest eorned on loons xxx. xxx" Section 3. Applicability to pawnshops, NBFIs and non-banks operating as credit card issuers. The amended provisions on 'Dissemination of Relevant Information' under Sections 1 and 2 above shall likewise apply to NBFIs as follows: a) Amendment to Section 306/4307OJ4307S of the MORB/MORNBFI under Section 1 above shall be adopted under Section 4303P/43L2N of the MORNBFI. b) The amendment to Section 3t2 ol the MORB under Section 2 above shall be adopted under Section 4101C of the MORNBFI. Section 4. Appendices 16/Q-11/5-4 of the MORB/MORNBFt are hereby amended as shown in Annex A. This format shall also be adopted as Appendix P-15/N-15/C-3 of the MORNBFI.

Section 5. Effectivity This Circular shall take effect fifteen (15) calendar days following its publication either in the Official Gazette or in a newspaper of general circulation. FOR THE MONETARY BOARD: Xa q4d). Aox' I*"M MARIA AIIfiASARA CYD N. TUANO-AMADOR Officer-ln-Charge t October 2019

Append ix 76 / Q-LL/ s-4/ P -Ls / N-Ls/ c-3 FORMAT OF DTSCTOSURE STATEMENT ON SMArr. BUSTNESS/RETATVCONSUMER CREDTT (Appendix to sec. 306/312/4307Q/4307S/4303P/4312N/4707C on '"Truth in Lending Act" Disclosure Requirement) DISCLOSURE STATEM ENT ON CREDIT TRANSACTION (As Required under R.A. No. 3755, Truth in Lending Act) NAME OF BORROWER ADDRESS 1. CREDIT TMNSACTION AMOU NT F- ,oo, I 2. OTHER BAN K CHARGES/DEDUCTIONS COLLECTED1 F- ,oo, I a. Documentary/Science Stamps b. Mandatory Credit Insurance c. Others lSpecifv) 3. NET PROCEEDS OF CREDITTRAI{SACIION (ltem 1 less ltem 2) P XXX 4. SCHEDUTEOFPAYMENTS a. Single payment due on date IP XXX b. Installment Pavments (Please see attached amortization schedule) 5. EFFECTIVE INTEREST RATE (lnterest and Other Charges) Explanation: The effective interest rate is higherthan the contractual interest rate of % because of ltem 2 deductions above. 6. CONDITIONAL CHARGES THAT MAY BE IMPOSED (if applicable). Please specify manner of imposition: a. Latecharge P b. Prepayment (penalty/refund) c. Others (Specifu) CERTIFIED CORRECT: @ Position Representative Over Printed Name) I ACKNOWLEDGE RECEIPT OF A COPY OF THIS STATEMENT PRIOR TO THE CONSUMMATION OFTHE CREDIT TRANSACTION. (Signature of Borrower over Date Printed Name) Notes: - Small Business/Retail/Consumer loans include microfinance, auto (motor), salary, personal, educational; and other loans of similar nature. - This document contains the minimum information required to be disclosed to the borrower/person to whom credit is extended and may be enhanced to improve client information. 1 ltemize all charges including advance deductions. ragb r

Append ix 76 / Q-LL/ S-4/ P -ts / N-Ls / C-3 AMORTIZATION SCHEDUTE (SampleOnly) Installment LOan Principal I nterest Total O/S Balance {A) {B) (c) (D) (E) tF) xxx xxx XXX XXX xxx 2 xxx v)u xxx 3 xxx xxx 4 xxx xxx xxx xxx 5 xxx xxx xxx )ou 6 xxx xxx xxx xxx xxx xxx xxx xxx 6 xxx xxx xxx xxx 9 xxx xxx xxx xxx 1.0 xxx xxx xxx xxx 11 xxx xxx xxx 12 xxx xxx xxx xxx Total xxx xxx xxx .Legends: A - Number of installment periods based on loon term B - Gross omount of loon C - lnstallment poyment on the principol D - lnstollment payment on the interest E - Total amortizotion payment for the instollment period F - Outstonding principol bolance of the loon Page 2