TRUTH IN LENDING
242/ COVERED AND EXCLUDED TRANSACTIONS Q: What are the credit transactions covered by TILA?
242 1. Loans, mortgages, deeds of trust, advances and discounts; 2. Conditional sales contracts, any contract to sell, or sale or contract of sale of property or services, either for present or future delivery, under which part or all of the price is payable subsequent to the making of such sale or contract; 3. Any rental‐purchase contract; ///////////////////////
242/What are the items required to be disclosed?
242 A: 1. 2. In credit sales: a. Cash price or delivered price; b. Credit for down‐payment or tradein; c. Total amount to be financed; d. Charges not incident to the sale; ///////////
242/ OBLIGATION OF CREDITORS TO PERSON TO WHOM CREDIT IS EXTENDED /When does TILA apply?
242 It applies to creditors who extend loans, sales on installments and other credit transactions.
242/ CONSEQUENCES OF NON‐COMPLIANCE WITH OBLIGATION Q: What is the effect of non‐compliance with TILA?
242 ON TRANSACTION / ON CREDITOR Failure to disclose to any person any information in violation of TILA or any regulation issued. (Sec. 6 [a]) ON TRANSACTION Charges not itemized cannot be collected. If already paid, can be recovered ON CREDITOR Liable in the amount of P100 or in an amount equal to twice the finance charged required by such creditor, whichever is the greater, however, such liability shall not exceed P2,000 on any credit transaction. //////////////////////
242/ Purpose /What is the purpose of Truth in Lending Act (TILA)?
242 To protect persons from a lack of awareness of the true cost of credit and to prevent the uninformed use of credit.
242/ When and how should disclosure be made?
242/ Prior to the consummation of the transaction and in a clear statement in writing.
243/ COVERED INSTITUTIONS Q: What are the covered institutions?
243 1. Banks 2. Non‐banks 3. Quasi‐banks 4. Trust entities 5.All other institutions, their subsidiaries and affiliates supervised or regulated by BSP 6.Insurance companies and all other institutions supervised and regulated by the Insurance Commission 7.Securities dealers, brokers, salesmen, investment houses and other similar entities managing securities or rendering services as investment agent, advisor, or consultant /////////////////////////
242/ What transactions are not covered by TILA?
243 1. Those which do not involve the payment of any finance charges by the debtor; and Where the debtor is the one specifying a definite and fixed set of credit terms such as bank deposits, insurance contracts, sale of bonds, etc.
243 WHEN IS MONEY LAUNDERING COMMITTED Q: What is the meaning of Money Laundering?
243 A crime whereby the proceeds of unlawful activity are transacted, making them appear to have come from lawful transaction. (Sec. 4 R.A. 9160, as amended)
243/ How is money laundering committed?
243 It is committed by the following persons: 1.Any person knowing that the monetary instrument or property represents, involves, or relates to, the proceeds of any unlawful activity, transacts or attempts to transact said monetary instrument or property ///////////////////
243/SUSPICIOUS TRANSACTIONS Q: What are Suspicious Transactions?
243 Regardless of amount, if any of the following is present: 1.No underlying economic, trade or legal justification 2..Client not properly identified; numbered accounts are allowed provided client is identified 3.Transaction is not commensurate with financial capability of the client ////////
243/ COVERED TRANSACTIONS Q: What are Covered Transactions?
243 These are single transactions in cash or other equivalent monetary instrument involving a total amount in excess of 500,000.00 within 1 banking day. Note: These transactions are required to be reported to the Anti‐Money Laundering Council.
243/ C. OBLIGATION OF COVERED INSTITUTIONS What is the obligation of the covered institutions?
243 They are mandated by the AMLA to submit covered and suspicious transaction reports to the AMLC.
243/ IV. ANTI‐MONEY LAUNDERING. ACT OF 2001 (R.A. 9160 AS AMENDED BY RA 9194) A. POLICY OF THE LAW What is the policy for the enactment of the Anti‐Money Laundering Act?
243 To protect and preserve the integrity and confidentiality of bank accounts and to ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity. (Sec. 1 R.A. 9160, as amended)
243/When must an action for violation of the Truth in Lending Act be brought?
243 Within 1 year from the date of the occurrence of the violation.
244/ In disclosing Alvin's bank accounts to the AMLC, did the bank violate any law?
244 No, the bank did not violate any law. The bank being specified as a "covered institution" under the Anti‐Money Laundering Law, is obliged to report to the AMLC covered and suspicious transactions, without thereby violating any law. This is one of the exceptions to the Secrecy of Bank Deposit Act.
244/ Alvin is jobless but is reputed to be a jueteng operator. He has never been charged or convicted of any crime. He maintains several bank accounts amounting to P100 Million. AMLC charged Alvin with violation of the Anti‐Money Laundering Law. Can Alvin move to dismiss the case on the ground that he has no criminal record?
244 No. The contention of Alvin is not tenable because under AMLA, "money laundering crime" committed when the proceeds of an "unlawful activity," like jueteng operations, are made to appear as having originated from legitimate sources. The money laundering crime is separate from the unlawful activity of being a jueteng operator, and requires no previous conviction for the unlawful activity. (Sec. 3, AMLA)
243/ UNLAWFUL ACTIVITIES OR PREDICATE CRIMES Q: What are considered as unlawful activities or predicate crimes under AMLA?
244 These refer to any act or omission or series or combination thereof involving or having direct relation to the following: 1. Kidnapping for ransom 2. Drug trafficking and related offenses 3. Graft and corrupt practices 4. Plunder 5. Robbery and Extortion 6. Jueteng and Masiao 7. Piracy 8. Qualified theft 9. Swindling 10. Smuggling ///////////////////////
