Wed, Mar 18, 2009 - Page 11 News List

Lawmakers mull lowering interest rates

By Joyce Huang  /  STAFF REPORTER, WITH CNA

A legislative session tomorrow will explore the possibility of lowering the nation’s statutory interest rates, topped at 20 percent, on revolving credit for credit-card and cash-card holders, a Financial Supervisory Commission official said yesterday.

“We will hold a hearing to coordinate between consumer groups and banks and see if there’s any room for banks to lower revolving interest rates,” Commission Chief Secretary Lu Ting-chieh (盧廷劼) said.

Earlier yesterday, the Consumers’ Foundation urged the commission to revise downward the top rate in light of a series of rate cuts by the central bank in recent months.

Foundation chairman Hsieh Tien-jen (謝天仁) said the top 20 percent rate had been set in 1929, when the interest rate for savings was around 14 percent, with a net interest margin at between 6 percent and 7 percent.

Now that banks have cut saving rates to below 1 percent, the rate on revolving credit is outrageously high, he said, adding that it would be reasonable for the top revolving rate to drop below 10 percent.

Chinese Nationalist Party (KMT) Legislator Hsieh Kuo-liang (謝國樑) yesterday threw his support behind the rate cut, although he said the top rate should be lowered to 13.5 percent.

In response, Lu said that banks had differentiated risk-based cost, which may not reflect the central bank’s rate cuts. Earlier last month, several banks lowered their revolving interest rates by an average of 1.25 percent.

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