The Monetary Board, the policy making body of the Bangko Sentral ng Pilipinas, recently approved certain amendments to the pawnshop regulations issued under Circular No. 711 dated 28 January 2011. The amendments are designed to fine tune the regulations issued under Circular No. 656 dated 2 June 2009 that focused on the enhancement of transparency, consumer protection and compliance with the Anti Money Laundering Act.
For instance, the amendments require that the font size of the terms and conditions printed at the back of the pawn ticket should not be smaller than “Arial narrow 8” for readability. Additional conditions, if any, should also be printed in the same font size. The size of the pawn ticket should be enlarged if the additional stipulations cannot be accommodated in the minimum prescribed size of 8 inches by 5 inches for pawn tickets.
To protect consumers against illegal pawnshops, the BSP has been pursuing its campaign of identifying unregistered pawnshops. BSP personnel have been conducting ocular inspection in certain areas to check the BSP registration of pawnshops.
Likewise, BSP has been implementing a Memorandum of Agreement with the Department of Interior and Local Government on information sharing whereby BSP provides the cities and municipalities with a list of BSP-registered pawnshops in their respective areas while the cities and municipalities provide the BSP with a list of pawnshops which have been issued business permits.
A pawnshop without a business permit and that is not registered with the BSP is operating illegally and can be padlocked by the concerned city or municipal government. BSP can pursue legal action against the pawnshop and its owner under Presidential Decree No. 114 and the New Central Bank Act.
The number of registered pawnshops has grown to 15,596 as of December 31, 2010. They remain to be a main source of credit of a large portion of the population, many of them belonging to the unbanked sector.
The amendments will take effect 15 days after publication in the Official Gazette or a newspaper of general circulation in the Philippines. Circular No. 711 can already be accessed at the BSP website – firstname.lastname@example.org. The complete set of pawnshop regulations as amended by Circular No. 711 will also be accessible at the BSP website soon.