REPUBLIC ACT No. 3765 AN ACT TO REQUIRE THE DISCLOSURE OF FINANCE CHARGES IN CONNECTION WITH EXTENSIONS OF CREDIT.

Sectio !. This Act shall be known as the "Truth in Lending Act." Sectio ". Declaration of Policy. It is hereby declared to be the policy of the State to protect its citizens fro a lack of awareness of the true cost of credit to the user by assuring a full disclosure of such cost with a !iew of pre!enting the uninfor ed use of credit to the detri ent of the national econo y. Sectio 3. As used in this Act" the ter #$% "&oard" eans the 'onetary &oard of the (entral &ank of the Philippines. #)% "(redit" eans any loan" ortgage" deed of trust" ad!ance" or discount* any conditional sales contract* any contract to sell" or sale or contract of sale of property or ser!ices" either for present or future deli!ery" under which part or all of the price is payable subse+uent to the aking of such sale or contract* any rental,purchase contract* any contract or arrange ent for the hire" bail ent" or leasing of property* any option" de and" lien" pledge" or other clai against" or for the deli!ery of" property or oney* any purchase" or other ac+uisition of" or any credit upon the security of" any obligation of clai arising out of any of the foregoing* and any transaction or series of transactions ha!ing a si ilar purpose or effect. #-% ".inance charge" includes interest" fees" ser!ice charges" discounts" and such other charges incident to the e/tension of credit as the &oard ay be regulation prescribe. #0% "(reditor" eans any person engaged in the business of e/tending credit #including any person who as a regular business practice ake loans or sells or rents property or ser!ices on a ti e" credit" or install ent basis" either as principal or as agent% who re+uires as an incident to the e/tension of credit" the pay ent of a finance charge. #1% "Person" eans any indi!idual" corporation" partnership" association" or other organized group of persons" or the legal successor or representati!e of the foregoing" and includes the Philippine 2o!ern ent or any agency thereof" or any other go!ern ent" or of any of its political subdi!isions" or any agency of the foregoing. Sectio #. Any creditor shall furnish to each person to who credit is e/tended" prior to the consu ation of the transaction" a clear state ent in writing setting forth" to the e/tent applicable and in accordance with rules and regulations prescribed by the &oard" the following infor ation3 #$% the cash price or deli!ered price of the property or ser!ice to be ac+uired* #)% the a ounts" if any" to be credited as down pay ent and4or trade,in* #-% the difference between the a ounts set forth under clauses #$% and #)%* #0% the charges" indi!idually ite ized" which are paid or to be paid by such person in connection with the transaction but which are not incident to the e/tension of credit* #1% the total a ount to be financed* #5% the finance charge e/pressed in ter s of pesos and centa!os* and #6% the percentage that the finance bears to the total a ount to be financed e/pressed as a si ple annual rate on the outstanding unpaid balance of the obligation. Sectio 5. The &oard shall prescribe such rules and regulations as ay be necessary or proper in carrying out the pro!isions of this Act. Any rule or regulation prescribed hereunder ay contain such classifications and differentiations as in the

7udg ent of the &oard are necessary or proper to effectuate the purposes of this Act or to pre!ent circu !ention or e!asion" or to facilitate the enforce ent of this Act" or any rule or regulation issued thereunder. Sectio 6. #a% Any creditor who in connection with any credit transaction fails to disclose to any person any infor ation in !iolation of this Act or any regulation issued thereunder shall be liable to such person in the a ount of P$88 or in an a ount e+ual to twice the finance charged re+uired by such creditor in connection with such transaction" whiche!er is the greater" e/cept that such liability shall not e/ceed P)"888 on any credit transaction. Action to reco!er such penalty ay be brought by such person within one year fro the date of the occurrence of the !iolation" in any court of co petent 7urisdiction. In any action under this subsection in which any person is entitled to a reco!ery" the creditor shall be liable for reasonable attorney9s fees and court costs as deter ined by the court. #b% :/cept as specified in subsection #a% of this section" nothing contained in this Act or any regulation contained in this Act or any regulation thereunder shall affect the !alidity or enforceability of any contract or transactions. #c% Any person who willfully !iolates any pro!ision of this Act or any regulation issued thereunder shall be fined by not less than P$"88 or ore than P1"888 or i prison ent for not less than 5 onths" nor ore than one year or both. #d% ;o punish ent or penalty pro!ided by this Act shall apply to the Philippine 2o!ern ent or any agency or any political subdi!ision thereof. #e% A final 7udg ent hereafter rendered in any cri inal proceeding under this Act to the effect that a defendant has willfully !iolated this Act shall be pri a facie e!idence against such defendant in an action or proceeding brought by any other party against such defendant under this Act as to all atters respecting which said 7udg ent would be an estoppel as between the parties thereto. Sectio 7. This Act shall beco e effecti!e upon appro!al. Appro!ed3 <une ))" $=5-