The government announced that the preferential bailout program to help credit and cash-advance card debtors ended yesterday, with over two thirds of target users being accepted for the program.
The end of the negotiation period will not be the end of government help for credit abusers, Vice Premier Tsai Ing-wen (
As of last Friday, more than 53,000 credit abusers with a total debt of NT$87.4 billion (US$2.7 billion) had reached an agreement with the government on a payback mechanism, about 66 percent of the 80,000 abusers that the government had estimated, Tsai said.
"We are pretty satisfied with the results ... but the crisis is still not completely solved," Kong Jaw-sheng (龔照勝), chairman of the Financial Supervisory Commission, said yesterday.
The commission said that approximately 360,000 credit abusers owed less than NT$300,000. These people do not qualify for assistance and will remain a problem.
About 160,000 people who owe more than NT$300,000 will be singled out for government help.
Kong estimated that the figures for the total amount of credit abusers, as well as their debts, are expected to begin to drop after July 5.
To encourage more indebted cardholders to seek assistance and negotiate with banks for repayment plans, the commission early last month said those who had applied for the debt-relief mechanism by yesterday will be exempt from interest charges during the negotiation period as well as debt collection measures from banks.
Starting today, such preferential treatment will be canceled but card debtors can still apply for the repayment program, which offers lower interest charges of between zero and 12.88 percent for periods ranging from 12 months to 80 months, said Elton Li (
"Some people have speculated that the government might have second or even third-generation programs that charge even lower interest rates. I must say this is groundless," he said.
As banks are set to begin making debt-collection phone calls today, lawmakers yesterday demanded that banking institutions do not use violence when collecting debts and that the financial authorities should present more concrete solutions to solve the problem.
Chinese Nationalist Party (KMT) caucus whip Pan Wei-kang (潘維剛) expressed worries that after banks resume debt-collection, "many people will be forced to take their own life."
"The government should consider extending the repayment timeframe or hammer out other practical schemes to deal with the problem," she said during a press conference.
The banker's association stressed that banks must hold to the bottom line, that is by allowing debtors to make their repayments over the maximum of 80 months.
"We've noticed some debtors with high salaries or those who do not owe much also try to take advantage of the favorable repayment scheme," said a high-level executive from a major credit card issuer on the condition of anonymity, adding that these ill-intentioned applicants have been rejected for debt negotiation.
Another banking veteran who refused to be named said he believes most of the heavily indebted cardholders have come out to seek assistance after the nation's banks have forked out NT$40 million to place TV commercials and newspaper advertisements to publicize the debt negotiation program.
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