DOJ Opinion No. 055, s. 1999

DOJ OPINION NO. 055 , s. 1999 July 21, 1999 Associate Commissioner Fe Eloisa C. Gloria Securities and Exchange Commission SEC Building, EDSA, Greenhills Mandaluyong City M a d a m : The opinion of this Department is requested on whether "credit and charge card issuers ('Card Companies') fall within the definition of 'Financing Companies' under Section 3(a) of R.A. 8556 (Financing Company Act of 1998) and should therefore be regulated as such." prcd The provision of R.A. No. 8556 adverted to pertinently reads: "SECTION 3. Definition of Terms . As used in this Act the term: (a) 'Financing companies' hereinafter called companies, are corporations, except banks, investment houses, savings and loan associations, insurance companies, cooperatives, and other financial institutions organized or operating under other special laws, which are primarily organized for the purpose of extending credit facilities to consumers and to industrial, commercial, or agricultural enterprises by direct lending or by discounting or factoring commercial papers or accounts receivable, or by buying and selling contracts, leases, chattel mortgages, or other evidences of indebtedness, or by financial leasing of movable as well as immovable property; . . . ." The request, it appears, is raised in view of the objection interposed by the Credit Card Association of the Philippines, as contained in its letters dated February 12, 1999 and May 6, 1999, to the classification of credit card issuers as financing companies under the provision above-quoted. With regret, this Department is unable to render the opinion requested for the reason that the issue raised relates to the substantive rights of the members of the Credit Card Association of the Philippines, a private party. Since the opinion of the Secretary of Justice is merely advisory in nature, such opinion would not be binding upon said private party who, if adversely affected by such opinion may take issue therewith and contest it before the courts. As a matter of policy, the Secretary of Justice does not render opinion on questions which, as in this case, affect the substantive rights of private parties or those which are litigious in nature (Sec. of Justice Opn. No. 36, s. 1999). Moreover, it appears that there are financing companies which are supervised by the Bangko Sentral ng Pilipinas (BSP) as may be gleaned from the provision of Section 4 of R.A. No. 8556 which provides: "SECTION 4. Section 4 of the same Act [R.A. No. 5980] is hereby amended to read as follows: 'SECTION 4. Grant of Authority to Securities and Exchange Commission . The Securities and Exchange Commission is hereby empowered to enforce the provisions of this Act and issue implementing regulations except insofar as the Bangko Sentral may have supervisory authority under the provisions of Republic Act No. 7653 with respect to financing companies licensed to perform quasi-banking functions, and insofar as the Monetary Board has authority to prescribe financing company rates and charges under Section 5 hereof.'" prcd As a matter of propriety and official courtesy, this Department refrains from rendering opinion on matters that pertain to the jurisdiction of another office or agency, except upon its request, so as not to pre-empt the authority of the concerned office or agency which might have a different view on the matter at issue. Very truly yours, (SGD.) JUSTICE SERAFIN R. CUEVAS Secretary