The Legislative Yuan resolved yesterday to refer a bill that would lower the interest rates for credit and cash cards to 12.5 percent to a one-month cross-party negotiation period.
The resolution was made on the legislative floor after party caucuses failed to reach a consensus on accepting the proposal by Chinese Nationalist Party (KMT) Legislator Hsieh Kuo-liang (謝國樑) and others.
The legislature must complete the review or reject the proposal before the negotiation period ends.
The proposal had been stalled after Hsieh and Financial Supervisory Commission (FSC) Chairman Sean Chen (陳冲) said last Tuesday night that they had reached a consensus to lower the interest rate ceiling from around 20 percent to 12.5 percent.
The Democratic Progressive Party (DPP) caucus had expressed dissatisfaction with Hsieh and Chen for announcing the consensus without negotiating the bill with the DPP.
The interest rate ceiling has been the subject of debate since the Judiciary and Organic Laws and Statutes Committee completed a preliminary review of a KMT proposal on March 19 that would cut the cap on all contracted interest rates from 20 percent to 9 percent above the central bank’s rate for three-month loans without collateral.
With the central bank’s short-term lending rate at 3.5 percent, that would be 12.5 percent.
The bill, however, drew strong opposition from foreign and domestic banks and analysts.
The Cabinet on March 23 said that the ceiling on interest rates for credit cards and cash cards should be capped at 15.5 percent instead, based on the maximum 12 percent interest rate for non-collateralized loans set by the central bank, plus a floating annual rate currently set at 3.5 percent. KMT lawmakers opposed the Cabinet’s decision.
Meanwhile, legislators approved an amendment to the Administrative Enforcement Act (行政執行法), allowing those who owe less than NT$100,000 in taxes to travel abroad.
However, those who have traveled abroad twice, even without knowing they have not paid off their tax, could still be banned from traveling.
The legislature also passed amendments to the Act Regulating Foreign Exchange (管理外匯條例) and the Act Governing International Financial Business (國際金融業務條例) that would authorize the Central Bank and the FSC to freeze accounts suspected of being used for money laundering or terrorist activity.
The amendment also authorized the legislature to reject bank and FSC decisions to freeze an account.
Lawmakers also agreed to abolish the minimum capital threshold for those starting a new company.
Under the current regulations in the Corporation Act (公司法), the minimum capital for a limited liability company is NT$500,000, while the minimum capital for an ordinary company is NT$250,000.