Credit card laws should be revised to reduce interest rates on existing debts while including fees and penalties in interest restrictions, protesters said yesterday.
More than 20 demonstrators from the Credit Card Victims Self-Help Association staged a protest outside the Executive Yuan in Taipei against what they called “usurious interest rates,” putting on a skit illustrating the higher rates and fees Taiwanese cardholders are subject to relative to those in Japan.
“At a time when ordinary bank deposits do not even earn 2 percent interest, banks actually require people who have debt difficulties to pay up to 20 percent in interest [annually],” lawyer and group consultant Joseph Lin (林永頌) said. “When you add penalties and transaction fees, their debt can double every three years.”
Photo: CNA
Yesterday’s protest was prompted by today’s scheduled implementation of new reforms passed by the Legislative Yuan, which amended the Banking Act (銀行法) earlier this year.
The changes reduced the upper interest rate limit for new credit card debt from 20 percent to 15 percent.
Activists called the new rules “false reforms” aimed at “deceiving voters,” citing the amendments’ failure to apply the interest rate cap to existing debt or to include penalties and transaction fees within the 15 percent limit. They called for the Financial Supervisory Commission to propose new amendments in line with their demands.
While the commission maintains that including penalties and transaction fees in the 15 percent limit would result in banks cutting back access to credit, forcing people to seek out “underground lenders,” Japan’s experience shows that such concerns are unfounded, Lin said.
Gradual reforms over the past thirty years in Japan have cut the annual interest rate cap from 109 percent to 15 percent, including penalties and transaction fees, he said.
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