Sat, Nov 29, 2003 - Page 10 News List

Cash-advance card resolution praised

By Amber Chung  /  STAFF REPORTER

Consumers yesterday said they welcomed a draft resolution made by the Bankers Association of ROC (銀行公會) on restricting the number of cash-advance cards an individual can apply for. But banks seemed lukewarm about the new measure.

Cash-advance cards allow cardholders to take loans from automated teller machines.

The Bankers Association made a draft resolution earlier this week that each cardholder can only possess three cards.

Students in particular are restricted to having only two cash-advance cards, with a credit maximum of NT$40,000.

The association hopes banks will be more self-restrained and cautious about the issuance of cash-advance cards. It has submitted the resolution to the Ministry of Finance for approval.

The Consumers' Foundation (消基會) yesterday said it is positive about the association's effort to advocate such self-restraining moves.

"But what really matters is that banks should investigate an applicants' identity when examining the applications for cash-advance cards to prevent potential fraud," the foundation's secretary-general Cheng Jen-hung (程仁宏) said.

Banks should verify applicants' prior credit records, including loans for houses and cars, through the Joint Credit Investigation Center (聯合徵信中心) and take these information into account before issuing cards and setting credit lines.

The foundation urged banks to act as a gatekeeper, especially in processing applications from students, by affirming that student applicants have obtained parents' prior approval before issuing cash-advance cards.

Some cardholders hope the banks will bear more responsibility should problems caused by the cash-advance cards occur.

"I highly support the resolu-tion," said Chiu Hui-chin (邱慧琴), an advertising employee who became a cash-advance cardholder one year ago.

"The banks should show more self-restraint over the overabundant issue of cash-advance cards, instead of shifting the responsibilities on to consumers," Chiu said.

Yeh Ting-chen (葉庭禎), a 34 year-old worker in the insurance industry who has three cash-advance cards agreed, saying that boosting card numbers should not be banks' only concern.

The resolution, however, has no mandatory power over banks, and some banks appearing lukewarm about the resolution.

Cosmos Bank Taiwan (萬泰銀行), which has Taiwan's largest domestic market share of the cash-advance card business with about 55 percent of the island's total outstanding balance, has issued 1.3 million cards so far.

The 11-year-old bank started the cash-advance business in 1999, and said it has exerted prudence and caution when issuing cards.

"Banks have actually been bearing the risk of losses generated by the outstanding loans on cash-advance cards as these small loans cannot be insured," Cosmos' spokesman Shih Kung-liang (施坤良) said.

James Wu (吳均龐), president of Fubon Commercial Bank (富邦銀行), which is currently evaluating the feasibility of issuing cash-advance cards, said that consumers should have rights and capabilities to decide if they hold too many cards.

"We should let the market to decide," Wu added.

As of August, around 3.8 million cash-advance cards were in circulation nationwide, with total outstanding loans amounting to NT$145.2 billion, the Bureau of Monetary Affairs under the Ministry of Finance said last month.

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