GBL & TILA Flashcards
These are entities in the lending of funds obtained in the form of deposit
Banks
Under RA 8791 what are the requirements for grant of loans or other credit
accommodations?
- The debtor is capable of fulfilling his commitments to the banks
- A statement of their assets and liabilities and of their income and expenditures
The Monetary Board may authorize the organization of a bank or quasi-bank subject to
the following conditions. Give the (3):
- That the entity is a stock corporation,
- That its funds are obtained from the public, which shall mean twenty (20) or more
persons; and - That the minimum capital requirements prescribed by the Monetary Board for each
category of banks are satisfied.
To protect the finds of depositors and creditors the Monetary Board may regulate the
payment by the bark to its directors and officers of compensation, allowance, fees, bonuses,
stock options, profit sharing and fringe benefits only in exceptional cases and when the
circumstances warrant, such as but not limited to the following:
- When a bank is under comptrollership or conservatorship; or
- When a bank is found by the Monetary Board to be conducting business in an unsafe or
unsound manner; or - When a bank is found by the Monetary Board to be in an unsatisfactory financial
condition.
A universal bank may, subject to the conditions stated in the succeeding paragraph,
invest in the equities of allied and non-allied enterprises as may be determined by the
Monetary Board. Allied enterprises may either be financial or non-financial. Except as the
Monetary Board may otherwise prescribe:
- The total investment in equities of allied and non-allied enterprises shall not exceed fifty
percent (50%) of the net worth of the bank; and - The equity investment in any one enterprise, whether allied or non-allied, shall not
exceed twenty-five percent (25%) of the net worth of the bank.
In Equity Investments of a Universal Bank in Financial Allied Enterprises, at what
percentage a universal bank can own equity in a thrift bank, a rural bank, or a financial allied
enterprise?
Equity Investments of a Universal Bank in Financial Allied Enterprises. - A universal bank
can own up to one hundred percent (100%) of the equity in a thrift bank, a rural bank,
or a financial allied enterprise. A publicly listed universal or commercial bank may own
up to one hundred percent (100%) of the voting stock of only one other universal or
commercial bank.
In Equity Investments of a Universal Bank in Non-Financial Allied Enterprises, at what
percentage a universal bank can own equity in a non-financial allied enterprise.
Equity Investments of a Universal Bank in Non-Financial Allied Enterprises. - A universal
bank may own up to one hundred percent (100%) of the equity in a non-financial allied
enterprise.
In Equity Investments in Quasi-Banks, to promote competitive conditions in financial
markets, the Monetary Board may further limit up to what percent of equity investments of
universal banks in quasi-banks?
Equity Investments in Quasi-Banks. - To promote competitive conditions in financial
markets, the Monetary Board may further limit to forty percent (40%) equity
investments of universal banks in quasi-banks. This rule shall also apply in the case of
commercial banks.
The General Banking Law of 2000 applies -
To the operation of the branches of foreign banks in the Philippines.
What is the directorship requirement for banks?
At least 2/3 of the members of the Board of Directors of any bank or banking institution
shall be citizens of the Philippines.
Can a commercial bank engage in the business of a trust company?
Yes. A commercial banking corporation may, with the approval of the Monetary Board,
be authorized to engage in the business of a trust company, but shall be subject to the
provisions related to the trust corporations as regards its trust business.
Can banks advertise the amount of their authorized or subscribed capital stock?
No, unless they also indicate, at the same time and with equal prominence, the amount
of their capital actually paid up
What type of stocks may be issued by banks?
No banking institution shall issue no par value stock.
What specific business cannot be entered into by banking institutions?
Banking institutions shall not engage in insurance business as the insurer.
What is the Annual Percentage Rate (APR)?
The interest rate plus any other charges for the loan, including such things as discount
points and origination fees; computed as a yearly percentage rate. It is used for
comparing loans.
If there are any errors or disclosures are not delivered till when does the right to rescind
extend?
Three years after consummation, upon transfer of all the consumer’s interest in the
property or upon sale of the property, whichever occurs first.
How much capital should a lending company have as a minimum?
P1,000,000
The term “Creditor” in TILA means;
Any person engaged in the business of extending credit (including any person who as a
regular business practice make loans or sells or rents property or services on a time,
credit, or installment basis, either as principal or as agent) who requires as an incident
to the extension of credit, the payment of a finance charge.
According to R.A No. 3765 who are the lenders required to disclose?
- Banks and other financial institutions
- Any person in the business extending loans or selling or renting
Which fees are not included in the finance charge and annual percentage rate?
Fees for title escrow or loan prep for documents, notarization fees, appraisal fees, and
credit report fees.
What are the penalties for violating TILA?
A fine of $5000, imprisonment for up to one year, or both.
It is a federal law enacted in 1968 to help protect consumers in their dealings with
lenders and creditors.
Truth in Lending Act (R.A No. 3765)
What are the civil remedies for failure to comply with TILA for individual cases?
Payment of actual damages, attorneys’ fees and court cost and statutory damages up to
two times the amount of the finance charge as long as this figure is at or above 100 or
below 1000.
According to the Truth in Lending Act, when does refinancing occur?
When an existing obligation is satisfied and replaced by a new obligation
What year was the Truth in lending Act created?
1968
Give an item that is not required to appear on the Truth in Lending statement?
Actual cost not retained by lenders (title fees, legal fees, closing cost, property taxes,
appraisal fees, recording fees, notary fees, etc.) TILA requires a disclosure of the terms
of the credit transactions, including cost and key provisions.
When must the TILA disclosure be provided?
According to the Consumer Financial Protection Bureau, you must be given a written
TILA disclosure, before you become legally obligated to pay off the loan. The importance
of seeing it before you are obligated cannot be overstated.
