Data Source:Laws and Regulations Retrieving System of the Banking Bureau

Regulations Governing the Cash Card Business of Financial Institutions
Per order of Financial Supervisory Commission No. Jin-Kuan-Yin (4)-Zi-No. 0944000230 dated 04/29/2005)

1. The term “cash card business” depicted in the Regulations herein refers to an unsecured loan business of banks and credit cooperatives (collectively termed “financial institutions” hereunder) where line of credit of certain amount is offered to cardholders and cardholders can use the card issued by the financial institutions to obtain a cash loan via an automated teller machine (ATM) or in another manner on a revolving basis within the approved line of credit.
2. A financial institution engaging in cash card business shall follow the rules and regulations of the Financial Supervisory Commission, Executive Yuan (referred to as the “FSC” hereunder), periodically file relevant data on its cash card business with the FSC and a FSC-designated agency and disclose relevant information on its website according to the established rules.
3. The FSC-designated agency referred to in the preceding point shall draft the scope of cash card business data to be filed and rules for the filing operation, and submit the draft to the FSC for reference.
4. The data filed or disclosed on website in compliance with Point 2 herein shall be free of false representation to ensure accuracy.
5. A financial institution shall establish an internal control and internal audit system for its cash card business, and if its cash card business is outsourced, periodically audit the internal control mechanism of the service provider. Where the improper conduct or remissness of the service provider or its employees results in damage to customer’s interests, the financial institution shall be held responsible for its customers.
6. A financial institution that engages in cash card business shall establish a credit review process to approve line of credit in a prudent manner, verify the veracity of card applicant’s identity, independent and stable financial sources and ability to pay, and understand the applicant’s debt situation before issuing the cash card.
The line granted to an applicant shall be comparable to applicant’s ability to pay at the time of application.
If an applicant’s data have been inquired intensively by financial institutions to the Joint Credit Information Center (JCIC) in a short period of time, the financial institution shall include the situation as an important piece of information in the credit review.
7. Cash card applicant shall be at least twenty years old. If a financial institution plans to grant a line exceeding NT$200,000 to a cash card applicant that already has in total available line of more than NT$1,000,000 from all cash cards held or already has five or more cash cards, the financial institution shall ask the applicant to submit proof of income or a financial statement.
8. A student applicant shall be at least twenty years old to apply for a cash card. A full-time student can hold no more than two cash cards with the initial line of credit not exceeding NT$10,000 from each card issuer. The initial line of credit can be raised up to NT$20,000 with the consent of applicant’s parent. Financial institutions shall not engage in marketing campaign targeting students.
If a cash card applicant indicates that he or she is a student on the application form, the financial institution shall notify applicant’s parent of the card issuance, asking the parent to pay attention to the use of cash card by cardholder.
If a financial institution discovers that an applicant is a student who holds more than two cash cards with the line of credit for each card exceeding NT$20,000, the financial institution shall promptly notify the cardholder of the suspension of service.
9. Financial institutions shall not issue cash card before receiving the written application and completing the credit review process.
10. In marketing cash card, financial institutions shall not appeal to the public using the marketing tactics of “fast card approval”, “get a card by another card”, “get a card with a namecard” or other similar tactics that will give the impression that no credit review will be conducted in card approval process, nor shall financial institutions offer giveaway or prizes.
11. Financial institutions shall include easy-to-understand warnings in their printed and dynamic advertising (e.g. poster and DM), card activation document and card application, such as “If you don’t pay back what you borrow, it will be difficult for you to borrow again”, or “You might suffer all your life if you pay back debt with debt”, and provide detailed information on maximum interest rate and charges.
When a financial institution runs a dynamic ad, it shall use the phrase “Please use your cash card with prudence” as the theme of appeal. The aforesaid warning shall occupy one eighth of the screen space and be run throughout the ad (except in frames that show interest rates and charges); the interest rate range and all charges involved shall be shown for at least four seconds and take at least one quarter of the screen space, in which the interest rate range shall take no less than one third of the space (i.e. one twelfth of the whole screen space); at the end of the run, at least one eighth of the entire play time (at least five seconds) shall be dedicated to playing the voice message of “Please use your cash card with prudence” in the same volume and running the following text messages on the full screen: 1. Check the content of the contract; 2. Manage and balance your income and charges; and 3. Make a reasonable repayment plan.
When a financial institution posts a printed ad (including flyer, vertical DM, poster, outdoor media and newspaper), the information specified in the first paragraph hereof shall take at least one eighth of the ad space.
12. To remind the public to value their own credit, a financial institution shall note the wording “Your late payment record will be posted with Joint Credit Information Center and adversely affect your rights to obtain other loans at a later date” beneath the applicant signature line of the application form.
13. Financial institutions shall fully disclose information on loan rates, repayment method, mailing of statements, contract termination procedure, charges, late payment interest rates and penalty, and default handling procedure in the application form and contract in conspicuous font to help the applicant understand more about the cash card business. Financial institutions shall also use easy-to-understand language to give an example of the methods, start and end period and rates for the calculation of interest and penalty, and give the applicant a reasonable period of time to review the contract before signing it.
Prior to issuing the cash card, the financial institution shall read the important information about cash card as included in a statement in front of the applicant and have the applicant and its representative (including the personnel of service provider) sign the statement. The competent authority will decide the content of such a statement.
14. Financial institutions shall specify rates and charges, detailed fees standards and terms and conditions for the charges in the application form and ask the applicant to sign the application for verification purpose. Financial institutions shall also disclose rates and charges on their website to make it easier for the public to look up and make comparison.
15. A financial institutions shall put a clause in the contract agreeing that if it plans to increase any of the charges or interest rates, or change methods for interest calculation, it will notify the cardholder in writing or by electronic mail as priorly agreed upon at least sixty (60) days in advance, and explain the reasons for such increase or change, and that the cardholder may terminate the contract if he or she objects to the change.
16. To protect the interest of the cash cardholders, financial institutions shall draw up a complaint handling procedure, set up a complaint hotline, notify the cardholders of such information in writing and post the same on their website.
17. After the issue of cash card, financial institutions shall provide information on the credit line of cardholder, loan balance and available credit on the withdrawal receipt or monthly statement.
The aforementioned monthly statement to be sent to the cardholders may be replaced by phone or online banking. Financial institutions may not reject the request of cardholders for statements.
18. If a financial institution plans to raise the contractually agreed line of credit or available line for a cash cardholder, it shall obtain the written consent of such cardholder, and if applicable, notify the guarantor and obtain his/her consent in advance.
A financial institution may obtain the consent of a cardholder for whom the financial institution intends to raise the available line via written consent as well as digital signature, ATM or automated loan machine. However, the financial institution shall step up the verification of cardholder’s identity and agree in the contract that it will be held responsible for the loss of cardholder resulting from its failure to perform identity verification vigorously.
19. Financial institutions may collect payment from the debtor and his/her guarantor only, and shall not bother or demand payment from third parties unrelated to the debt of cardholder.
20. Financial institutions that collect debt by phone shall install a recording system and retain the tape recording for at least six months for audit or investigation purpose in the case of a dispute.
21. Financial institutions that engage in cash card business shall not use violence, coercion, intimidation, verbal abuse, harassment, sham, or false, deceptive or misleading representation, or engage in other illicit debt collection practices that invade the privacy of the debtor.
22. The provisions in Points 19 ~ 21 apply to outsourced debt collection operation.
23. Financial institutions shall not give information on third parties unrelated to the debt of cash cardholder to its collection service provider.
24. Financial institutions shall notify cardholders of the outsourcing of debt collection in writing, informing the cardholders of the name of service provider, amount of debt to be collected, contents of Points 19 –22, 24 and 25 herein, as well as complaint hotline.
When visiting the debtor for collection purpose, the personnel of service provider shall identify himself and the name of the outsourcing financial institution, and show the letter of authorization to the debtor or a related third party.
If the collection is to be made by phone, a letter of authorization shall be sent to the debtor in advance.
25. Before a financial institution sells its non-performing loans of cash cards to an asset management firm, it shall obtain the cardholder’s consent by prior agreement. At the time of sale, the financial institution shall notify the cardholders of the sale in writing, informing the cardholders of the name of asset management company, amount of debt to be collected, contents of Points 19 –22, 24 and 25 herein, as well as complaint hotline. When selling non-performing loans of cash cards to an asset management company, the financial institution shall look into and enter an agreement with the asset management company that its collection standards shall be consistent with those of the financial institution and that the asset management company may not transfer the debt to any illicit organization or individual associated with crime or violence.
If a financial institution learns through customer complaints or other channels that the asset management company resorts to violence, coercion, intimidation, verbal abuse, harassment, sham, or false, deceptive or misleading representation, or engage in other illicit debt collection practices, and finds the evidence to be true, the financial institution shall forward relevant information to the law enforcement agency for investigation, and file the same information with the Joint Credit Information Service. In addition, no financial institutions shall sell their non-performing loans to such asset management company.
26. If a financial institution is involved in the leak of personal information in the marketing of its cash card business or involved in violence, coercion, intimidation, verbal abuse, harassment, sham, or false, deceptive or misleading representation, or other illicit practices in debt collection, and the act is found true by the FSC, the FSC will impose disposition against the financial institution depending on the severity of offense, and if deemed necessary, suspend or terminate its cash card business.
If the act of the financial institution involves improper advertising or marketing activities, the FSC will invite relevant agencies, scholars and experts to determine the nature of the act.
27. If the cash card payment is six months in arrears, the financial institution shall write off the entire amount of advances made as bad debt in the next three months.
28. Where the non-performing loan ratio of the cash card business of a financial institution exceeds the limit prescribed by the FSC, the FSC will demand rectification or improvement actions within a prescribed period of time or suspend the cash card business of the financial institution.
29. Financial institutions shall observe the self-regulatory rules for cash card business set forth by the Bankers Association of the Republic of China.
30. The FSC will impose punishment against violators of the Regulations herein according to the Banking Act and relevant regulations in view of the severity of the situation.