A landmark case

Sometime last year, the Supreme Court come out with a ruling penned by Associate Justice Presbiterio Velasco that banks and lending institutions, including those issuing credit cards, cannot and should not charge more than 2 percent monthly, or 24 percent annually, for interest.

The case against the Ayala-owned Bank of the Philippine Islands was filed by a borrower of the bank, who claimed that the bank’s practice of charging more than 2 percent a month—even going beyond 36 percent annually—was usurious.

I wrote about this last year, and I considered it a landmark case in the wake of the abuses of banks, lending institutions and even those issuing credit cards to charge interests at exorbitant rates. These companies usually compound the interest with the penalty for late payment.

I used to have four credit cards, and now it’s down to three: two from Citibank (Gold Visa and Mastercard) and one from BPI- a Mastercard. And I’ve always considered that my payment of 3.5 percent interest for the use of those cards is a ripoff.

Eventually I intend to have only one credit card. Yes, a credit card could be useful because carrying cash these days is dangerous. But it can also be a debt trap.

When this Supreme Court decision came out last year, I urged the Bangko Sentral to require all banks to comply. Unfortunately, nothing has happened, and it would seem that even the BSP is in cahoots with banks, lending institutions and issuers of credit cards to continue abusing consumers and the public.

Santa Banana, when will we ever get relief from all these abuses if the BSP cannot even implement a Supreme Court ruling? It’s pure incompetence!