Solon wants to strengthen non-stock savings, loan associations
THERE is a need to strengthen the structure and operations of Non-Stock Savings and Loan Associations (NSSLAs) to make them efficient financial intermediaries and empower the member-households through the grant of timely and adequate credit facilities, according to a lawmaker.
Rep. Rachel Marguerite Del Mar (1st District, Cebu City) filed House Bill 1686, which seeks to expand the membership of NSSLAs to a broader “well-defined group” while maintaining the limitation not to transact
with the general public.
“The measure will improve NSSLAS deposit-taking power by including dollar-savings deposits from members with spouses in foreign countries working abroad as Overseas Filipino Workers (OFWs),” Del Mar said.
“The NSSLAs can do more in terms of resources and capacity and would bring to the next level its operations as a financial entity to be in a better position to provide optimum services for the accumulation of savings and extension of credit facilities in a fair manner to its members,” Del Mar said.
The bill amends certain provisions of Republic Act 8367, otherwise known as the “Revised Non-Stock Savings and Loan Association Act of 1997,” to further strengthen the structure and operations of NSSLAs to be efficient intermediaries between savers and borrowers.
“This will encourage Filipinos to save, empower the members of the household through their credit facilities and services, particularly providing short-term and long-term financing for their consumption expenditures and other personal finance requirements,” Del Mar said.
“This will regulate and put NSSLA operations on a sound, stable and efficient basis, prevent practices which are prejudicial to the interests of association members and maximize the protection of members of NSSLAs against misfeasance and malfeasance of the trustees and officers of the NSSLAs,” Del Mar said.
Del Mar added that the NSSLA industry, conceededly, a constructive component of the Philippine financial system, has contributed and is contributing to the development of the economy.
NSSLAs total assets reached P80.4 billion at the end of December 2008, and this growth, based on the 2008 Report of the Bangko Sentral ng Pilipinas (BSP), was achieved and sustained inspite of the slowdown in the economy and even while the industry consistently relied on member’s equity contribution for its funding source.
The measure further provides to enhance the borrowing, lending and investing functions of the Associations, including the rediscounting of papers with the BSP or other banks and their branches and agencies subject to BSP guidelines and tasking the Monetary Board to set up specific regulatory framework for NSSLAs through the BSP to take into account the unique business nature and characteristics of NSSLAs.
“A strengthened NSSLA can be a most effective instrument at providing opportunities to a broad sector of our communities for the improvement of the people’s standard of living and quality of life,” Del Mar said.