| 1 |
ummary: Supplemental interpretation of the instruction that “A financial institution may not sell the non-performing loan of a debtor to an asset management company while the debtor is applying for debt negotiation in accordance with Article 151 of Consumer Debt Clearance Act.”
Issued by: Financial Supervisory Commission, Executive Yuan
Date of issue: 2008/07/17
Ref. No.: Jin-Guan-Yin (4)-Zi-No. 09700199170
Subject: This is a supplemental interpretation of the instruction that “A financial institution may not sell the non-performing loan of a debtor to an asset management company while the debtor is applying for debt negotiation in accordance with Article 151 of Consumer Debt Clearance Act” given in FSC order Jin-Guan-Yin (4)-Zi-No. 09740000830 dated April 8, 2008. Please forward this message.
Explanations:
1. On the question when a financial institution may not sell a non-performing loan (NPL), given that the transfer of a NPL involves the signing of an agreement with the asset management company and the completion of settlement procedure, thus if a debtor applies to the creditor financial institution for debt negotiation before his or her debt is formally transferred to an asset management company, the financial institution should still accept the application in order to uphold the rights of debtor.
2. For this type of debt negotiation application cases, the financial institution should reach an agreement with the asset management company when signing the non-performing loan sale agreement that the seller is entitled to request the buyback of this type of NPL before final settlement. As for a NPL that has already been sold, but the sale is not yet settled and the sale agreement does not contain similar buyback clause, the financial institution should try its best to help the debtor negotiate with the asset management company according to the conditions for debt negotiation.
3. The aforesaid interpretation applies specifically to the time while a debtor applies for debt negotiation, during which, a financial institution may not transfer the NPL concerned to an asset management company. It does not apply to the time after the end of the debt negotiation period, regardless whether the debt negotiation results in an agreement or not.
TO: Bankers Association of the Republic of China (please forward this message to member institutions, including branches of foreign banks in Taiwan and credit card issuers).
cc: Bowa Bank (in reply to your bank’s letter Bao-Hua-Jie-Zhai-Zi-No. 07034 dated May 16, 2008), FSC Banking Bureau |