| Article 14 | The clearing of International credit cards issued and used in Taiwan shall be made in Taiwan in New Taiwan Dollars. For international credit cards issued in Taiwan but used in a foreign country, or issued in a foreign country but used in Taiwan, related foreign exchange transactions shall be processed in accordance with the applicable regulations of the Central Bank of the Republic of China (referred to as the "The Central Bank" hereunder). |
| Article 15 | To apply to the Competent Authority for approval to engage in other credit card businesses, a credit card business institution shall submit a business plan to the Competent Authority. An approval shall be deemed to have been given if, within thirty (30) days from the day following the Competent Authority's receipt of such application, the Competent Authority does not object thereto.
The business plan referred to in the preceding paragraph shall contain the following particulars:
1. Reasons for engaging in such businesses;
2. Agreements among relevant parties to such business regarding their respective rights and obligations;
3. Internal business rules and processes; and
4. Market prospects and risk/benefit analysis.
When the operating rules or processes of credit card business, or rights and obligations of parties relevant to the business operated by a credit card business institution differ from those set out in its business plan originally approved by the Competent Authority, and such difference(s) have a significant impact on consumer interests, the credit card business institution shall take actions according to the preceding two paragraphs. |
| Article 16 | A credit card business institution that plans to terminate some or all of its credit card businesses shall submit a plan therefor to the Competent Authority to apply for approval.
The plan referred to in the preceding paragraph shall contain the following particulars:
1. Reasons for not being able to continue a credit card business; and
2. A proposal regarding the institution's handling of existing customers' rights/obligations and any alternative services that may by offered.
A credit card business institution that plans to suspend some of its issuing businesses, shall submit a plan that describes the proposed measures for protecting the rights and interests of cardholders and the planned duration of suspension to the Competent Authority to apply for approval. Before the credit card business institution subsequently resumes the credit card business, it shall first submit a written report to the Competent Authority for reference. |
| Article 17 | Credit card business institutions shall, in compliance with the requirements of the Competent Authority and the Central Bank, periodically report information regarding their credit card business activities to the Competent Authority, the Central Bank, and other institutions designated by the Competent Authority, and disclose relevant material information on their website according to the instructions of the Competent Authority.
The other institutions designated by the Competent Authority under the preceding paragraph shall determine the scope of information to be reported by credit card business institutions and standards for the filing operations, and submit same to the Competent Authority for reference.
The information reported and disclosed by credit card business institutions pursuant to the first paragraph hereof shall not contain false information or misrepresentation to ensure information accuracy. |
| Article 18 | A credit card business institution may not engage in any relevant advertising or promotion activities before it is approved by the Competent Authority to engage in credit card business.
Before a credit card business institution releases information produced for its advertising or other marketing activities to the public, such information should have been reviewed by its chief compliance officer to make sure the content is free of inappropriate or false representation, or statement that misleads the consumers or violates relevant laws and regulations. |
| Article 19 | Card issuers shall observe the following rules in conducting marketing activities:
1. The appeals of "fast card approval", "apply with another card", and "apply with a business card" and other imprudent marketing activities are prohibited.
2. Street marketing (arcade included) is prohibited.
3. A control mechanism for blank credit card application forms and a management mechanism for salespersons and sources of incoming applications shall be established.
Card issuers may not offer gifts, prizes or other benefits to the applicants, cardholders or other third parties in their card application, card approval, card activation, cash advance or revolving credit related activities.
The rights or benefits offered by a card issuer to its new cardholders for an agreed period of time may not be changed during said agreed period without the consent of the cardholder, unless the change is made necessary for reasons not attributable to the fault of the card issuer. If the aforementioned change condition is met, the card issuer shall give the cardholders at least a 60-days notice in writing or by electronic document as agreed with the cardholder in advance.
The offering of credit card bonus points by card issuers and the use of such points shall be carried out in accordance with the requirements set out by the Competent Authority. |
| Article 20 | Regulations governing matters to be disclosed, layout and fonts of print and dynamic advertising made by card issuers shall be stipulated by the Competent Authority.
When card issuers cooperate with third parties in credit card business, they shall make sure that credit card related advertisements produced by such third parties comply with the requirements set out by the Competent Authority.
Where the content of an advertisement made by a card issuer is deemed by a panel composed of relevant agencies, scholars and experts under the invitation of the Competent Authority to mislead consumers by instilling incorrect value and money management concepts, the Competent Authority may order such card issuer to take remedial actions during a prescribed period of time, and in view of the situation, order the card issuer to suspend its credit card advertising or adopt other supervisory measures. |
| Article 21 | When accepting a credit card application, card issuers shall verify that the applicant meets the following criteria:
1. Principal card applicant:
(1) The applicant must be an adult; and
(2) At the time of applicant, the applicant must enclose his or her identity document and income or financial information evidencing his or her repayment capability. However the preceding provision does not apply to applications where the card issuer holdsthe applicant's income or financial information in the most recent year for other business dealings that could evidence the applicant's repayment capability and the applicant agrees that such information could be used for credit card application as well.
2. Supplemental card applicant:
(1) The applicant must be 15 years or older;
(2) The applicant is the spouse, parent, child, sibling of the principal cardholder or the parent of the principal cardholder's spouse; and
(3) The applicant provides identify document at the time of applicant. |
| Article 22 | Card issuers shall establish a credit card approval process to approve the credit limit for credit cards issued in a prudent manner and comply with the following provisions:
1. A card issuer shall verify the veracity of the applicant's identity, that the principal card applicant has independent and stable financial resources and the ability to pay off debt, and understand the applicant's debt situation.
2. The approved line should be commensurate with the principal card applicant's ability to pay at the time of applicant, and the sum of approved line plus the total balance of the applicant's unsecured debts (including credit card debts) with all financial institutions as a multiple of the average monthly income of the applicant within the most recent year shall comply with the requirements set out by the Competent Authority. Card issuers shall comply with the provisions hereof when raising the credit limit of a cardholder.
3. A card issuer shall draw up management rules for total credit limit granted to the principal card applicant and the multiplier of average monthly income in the past year, and implement the rules after obtaining the approval of its board of directors (council members). The preceding provision applies to any revision of the management rules thereafter. For a foreign bank branch in Taiwan, the duties of the board of directors (council members) described above will be fulfilled by an officer authorized by its head office.
4. A card issuer shall include whether a considerable number of credit inquiries on the principal card applicant has been made with the Joint Credit Information Center ("JCIC") in a short period of time as one of the important review items.
5. Where the principal card applicant has the record of "notation of payoff by others" at JCIC, the card issuer should make sure that the applicant has repayment capability.
6. A card issuer shall not use the applicant's credit information at JCIC as the only basis for approving or rejecting an application. |
| Article 23 | Card issuers shall comply with the following rules with regard to student applications for credit card:
1. A card issuer may not undertake marketing activities targeting to students.
2. A full-time student can hold no more than three credit cards with a credit limit not exceeding NT$20,000 from each card issuer.
3. If a credit card applicant indicates that he or she is a student on the application form, a card issuer shall notify the applicant's parent(s) or legal guardian of card issuance.
4. The notification mentioned in Subparagraph 3 hereof shall be stated in the application form and contract. |
| Article 24 | A card issuer should formulate different credit risk levels and assign each cardholder a credit risk level in line with their credit standing, and adopt tiered pricing for the interest rates of revolving credit after taking into account the cost of funding and operating costs, and should periodically review the applicable interest rates to respective cardholders at least on a quarterly basis.
A card issuer shall specify in the credit card agreement events that will trigger the adjustment of interest rate applicable to a cardholder and that interest rate will be adjusted only if an agreed event has occurred. At the time of rate adjustment, a card issuer shall notify the cardholder of reason for adjustment, the adjusted interest rate, and other relevant information.
A card issuer shall periodically review credit cards it has issued at least once every six months.
For credit cardholders who opt for revolving credit facility on a long-term basis, a card issuer shall offer the cardholders options on repayment or interest rate adjustment as required by the Competent Authority. |
| Article 25 | A card issuer may not raise the credit limit granted to a cardholder or grants a cardholder a separate credit limit for the cash advance service offered. In addition, the cash advance limits, related marketing activities and other matters shall be carried out in accordance with the provisions stipulated by the Competent Authority.
A card issuer may not allow a cardholder to pay the principal and interest of a loan with the credit card it issues. |
| Article 26 | A card acquirer shall observe the following rules in conducting the card acquiring business, however the following provision does not apply for a card acquirer approved by the Competent Authority to agree that a cardholder may use a credit card to pay for its other business:
1. A card acquirer may not furnish a merchant Point of Sale terminal machine or accept the payment request from a merchant unless it has entered a contract with the merchant.
2. A card acquirer should conduct credit checking realistically before signing a contracted merchant.
3. After signing a contracted merchant, a card acquirer should step up training for the merchant, and establish a monitoring and transaction suspension mechanism for contracted merchants with irregularities in credit card transactions or payment request as well as a risk control mechanism for high-risk contracted merchants or contracted merchants that offer deferred products or services.
4.A card acquirer should audit its contracted merchants at least once every half a year by examining transaction irregularity and JCIC credit records, and monitor the transactions of its contracted merchants. The auditing method can be documentary examination, online verification or onsite audit. If a card acquirer finds a contracted merchant accepting credit card payment for a deferred product or service without the pre-approval of the card acquirer, or being involved in other contract breaching or illegal activities, the card acquirer shall promptly conduct investigation of said merchant's transaction pattern and content of its business, and take necessary actions.
5. The printed credit card payment receipt to be given to a cardholder after a credit card transaction shall indicate at least the name of card acquirer, the name of merchant, card type, card number, authorization code, and date and amount of transaction. The way to disclose the card number shall comply with the provisions stipulated by the Competent Authority.
6. A card acquirer may not sign merchant contract with institutions that do not provide products or services, such as finance companies, or allow such institutions to be involved in credit card transactions.
7. If a contracted merchant of the card acquirer engages in credit card transactions via an Internet trading platform, the card acquirer shall sign contract with such Internet trading platform service provider.
8. The payment of a card acquirer to a contracted merchant may not be disbursed directly to a third person. However for contracted merchants that accept credit card transactions through an Internet trading platform service provider, if the contract performance by merchant is fully guaranteed by a bank or if all credit card payments received by the merchant is totally placed in trust and has been verified as such by the card acquirer, the card acquirer may disburse the transaction payment to the Internet trading platform service provider if so instructed by the contract merchant.
9. A card acquirer shall establish control mechanism for its Point of Sale terminal machines to ensure the security of transaction data.
10. When the deferred product or service of a contracted merchant is no longer provided, the card acquirer shall handle payment dispute arising thereof in accordance with the provisions stipulated by the Competent Authority.
Where the contract performance by merchant is fully guaranteed by a bank under Subparagraph 8 of the preceding paragraph, the bank that signs the performance guarantee must meet the criteria set forth by the Competent Authority.
11.A card acquirer shall operate its business in a fair and reasonable manner. Factors including operational costs, transaction risks and reasonable profits shall be taken into consideration in determining the reasonable fee to be collected from contracted merchants; and a card acquirer may not solicit or conduct card acquiring business by offering an unreasonable fee.
A card acquirer approved by the Competent Authority to agree that a cardholder may use a credit card to pay for its other business shall establish internal control and audit systems between the card acquiring business department and such other business department, and the card acquiring business department shall demand that such other business department comply with the provisions in Subparagraphs 3 to 5, 9, 10 of Paragraph 1, Paragraph 1 of Article 27, and Article 53 in agreeing a cardholder to use a credit card for payment. |
| Article 27 | The contract entered by and between a card acquirer and a merchant shall contain the following particulars:
1. A merchant should ensure the accuracy of payment request data.
2. Unless with justified reasons, a merchant may not refuse a cardholder's request to use credit card for charges, limit the charge amount or charge additional fees.
3. A merchant shall safekeep the sales drafts and orders or relevant documents that carry the personal information of cardholder and/or credit card information, and keep all information on the cardholder confidential, unless it is otherwise required by law or the Competent Authority.
4. A merchant shall not engage in transactions involving cash advances for financing purpose.
5. A merchant may not accept credit card transactions outside its scope of business.
6. If a merchant offers the service of installment payment by credit card on its own, said merchant shall not transfer the claims receivable thereof to any third person.
7. A merchant may not lend its Point of Sale terminal machine to others.
8. In case a merchant violates the provisions in Subparagraph 4, 5, or 7, the card acquirer will immediately terminate the contract and inform the JCIC.
Where the contract entered by and between a card acquirer and a contracted merchant does not conform to the provisions in the preceding paragraph, the card acquirer shall revise the contract in six (6) months from the date the amendment to these Regulations enters into force. |
| Article 28 | A credit card business institution that outsources its credit card business shall comply with the Regulations Governing Internal Operating Systems and Procedures for the Outsourcing of Financial Institution Operation.
A card issuer that collaborates with another business in the issue of a co-brand card or affinity card shall observe the following provisions:
1. The card issuer shall establish a mechanism for keeping customer information confidential, and establish internal operating systems and procedures with regard to the scope of collaboration, protection of customer's interests, risk management and internal controls.
2. The card issuer shall demand that its partner comply with the provisions in Paragraphs 1 and 2 of Article 19 in conducting marketing activities. |
| Article 29 | When a credit card business institution sells its non-performing credit card loans to an asset management company, it shall handle the sales pursuant to the following provisions in addition to compliance with the Directions for Disposal of Non-performing Loans by Financial Institutions:
1. The credit card business institution shall look into and confirm that the collection standards of collection agency are consistent with its own standards.
2. The credit card business institution shall establish internal control and audit systems in place to effectively regulate and audit the collection activities of collection agency and shall assume responsibility for the improper collection practices of the collection agency.
3. The public auction of non-performing credit card loans shall be carried out pursuant to the operating procedures stipulated by the Competent Authority.
4. After the sale of a non-performing credit card loan, the credit card business institution shall notify the cardholder of the sale in writing or by electronic document, informing the cardholder of the name of the asset management company, the amount of debt transferred, as well as its complaint hotline.
5. If a credit card business institution learns through customer complaints or other channels that the asset management company resorts to violence, coercion, intimidation, verbal abuse, harassment, misleading or deceptive representation, disclosure of personal information or other illegal practice, and finds the evidence of the act in question to be true, the credit card business institution shall promptly terminate the sales agreement with such company and buy back the non-performing credit card loans and demand penalty from the asset management company.
6. A credit card business institution shall forward relevant information under the preceding subparagraph to the law enforcement agency for investigation, and file the same information with JCIC. In addition, no credit card business institutions may sell their non-performing loans to such an asset management company.
7. Other provisions as stipulated by the Competent Authority. |
| Article 30 | In order to protect the rights and interests of customers, a credit card business institution shall specify at least the following items in the agreement on the sales of non-performing credit card loans entered between it and an asset management company:
1. The asset management company cannot resell the non-performing credit card loans to a third party and shall outsource the collection of debt to the credit card business institution which sells the loans to the company or a debt collection agency designated or approved by the said institution.
2. The asset management company shall comply with the Banking Act, Money Laundering Control Act, Computer Processing Personal Data Protection Act, Consumer Protection Act, Fair Trade Act and other laws and regulations applicable to credit card business institutions.
3. The collection standards of the asset management company shall be consistent with those of the credit card business institution and the company shall realistically observe the provisions of Article 51 herein.
4. The asset management company shall establish an internal control mechanism and conduct periodical and nonscheduled audits.
5. The asset management company shall not use the information of third parties other than the principal and supplementary cardholders and guarantors revealed in the debt documents of the credit card business institution. |
| Article 31 | The accounting principles for credit card business shall be drafted by The Bankers Association of the Republic of China ("Bankers Association") and submitted to the Competent Authority for approval.
Credit card business institutions shall follow the accounting principles referred to in the preceding paragraph.
Banks, credit co-operatives and other institutions engaging in a credit card business shall maintain independent accounting records for such business. |
| Article 32 | Card issuers shall set aside bad debt reserve for overdue accounts and carry out write-off of bad debt according to the following provisions:
1. Setting aside bad debt reserve: If the monthly minimum payment is delayed for one (1) to three (3) months from the specified deadline, the bad debt reserve to be set aside shall be 2% of total advances made thereto; for a delay of three (3) to six (6) months, the bad debt reserve shall be 50% of the total advances made thereto; and for a delay of more than six (6) months, the bad debt reserve shall be 100% of the total advances made thereto.
2. Write-off of bad debt: If the monthly minimum payment is delayed by more than six (6) months from the specified payment deadline, all advances made thereto shall be written off within three (3) months thereafter.
3. The writing off of overdue accounts shall be handled in compliance with the limits authorized by the board of directors and approved by an authorized person(s), and a report thereof shall be submitted to the board of directors for reference; provided, that a foreign credit card company may handle such write offs according to the procedures authorized by its head office.
Where the overdue account ratio of its credit card business exceeds the limit set forth by the Competent Authority, a card issuer shall make adjustment according to the provisions stipulated by the Competent Authority. In addition, the Competent Authority may, in view of the situation, adopt supervisory measures pursuant to the Banking Act. |
| Article 33 | Credit card business institutions shall establish internal control and audit systems. The regulations governing the purpose, principles, policy and operating procedures therefor, the qualification requirements for internal auditors and other matters to be complied with shall be set forth by the Competent Authority. |
| Article 34 | A specialized credit card business institution shall submit the following information/documents to the Competent Authority for reference within four (4) months after the end of each fiscal year:
1. A business report;
2. A financial report audited by a certified public accountant and passed by its board of directors (council members) or the responsible officer in the case of a foreign credit card company; and
3. Other information as designated by the Competent Authority. |
| Article 35 | A specialized credit card business institution having any of the following situations shall immediately submit its financial report, reasons for incurring the loss and an improvement plan to the Competent Authority:
1. Its accumulated loss exceeds one third (1/3) of its paid-in capital, or contribution and earnings thereon; or
2. Its net worth falls below two thirds (2/3) of the designated operating funds [for credit card business].
If a credit card business institution has any of the situations described in the preceding paragraph, the Competent Authority may require such institution to make up the shortfall in capital, contribution and earnings thereon or the designated operating funds within a specified time period or limit such institution's business operation. If such credit card business institution fails to make up the shortfall within the specified time period, the Competent Authority may order such credit card business institution to cease business. |
| Article 36 | A specialized credit card business institution shall report to the Competent Authority for prior approval of any of the following matters:
1. Change in articles of incorporation.
2. Change in total capital.
3. Change in business place.
4. Transferring all or an essential part of business or assets to others.
5. Assuming all or an essential part of business or assets of others.
6. Other matters requiring prior approval as provided by the Competent Authority.
For matters described in Subparagraph 4 or 5 of the preceding paragraph, the designated transferor and transferee credit card business institutions shall make joint application to the Competent Authority for approval.
If a specialized credit card business institution has any of the following events, it shall report such event(s) to the competent authority together with information relating thereto:
1. Transfer of equity involving more than 10 percent of its stocks.
2. The dishonoring of negotiable instruments due to insufficient deposit, being denied service by banks, or other events that result in the loss of good credit standing.
3. Being involved in litigation, non-litigious proceeding, administrative disposition, or administrative lawsuit which has a significant impact on the financial status or business of the company.
4. Entering into, modifying, or terminating any contract for lease of the company's business in whole, or for business outsourcing, or for regular joint operation with others.
5. Major loss has occurred or is foreseeable.
6. Material changes in business policies.
7. Other material events that are sufficient to affect operation of the company or shareholders' interests. |
| Article 37 | A credit card business institution shall apply for membership of the Credit Card Committee of the Bankers Association in accordance with its rules. .
The Bankers Association shall submit the rules and meeting procedures of its Credit Cad Committee and subsequent amendments thereto to the Competent Authority for approval. |
| Article 38 | The Bankers Association shall undertake the following activities to assist members to maintain sound operations and to preserve the reputation of institutions in the same line of business:
1. Assist the Competent Authority to promote and study policies and regulations related to credit card business;
2. Promulgate and periodically review and examine common business rules or self-disciplinary rules and report such rules and subsequent changes thereto to the Competent Authority for reference;
3. Exercise necessary supervision of the business conduct of members or mediate disputes there between; and
4. Undertake other matters as designated by the Competent Authority.
Credit card business institutions shall comply with the business rules and self-disciplinary rules referred to in Subparagraph 2 of the preceding paragraph. |