TRUTH IN LENDING ACT RATIONALE (3) the difference between the amounts set forth under clauses (1)

and (2);
DBP VS ARCILLA
(4) the charges, individually itemized, which are paid or to be paid
Atty Felipe was hired as in-house counsel of DBP. In 1983, he borrowed by such person in connection with the transaction but which are not
160K from DBP to construct his house on. The monthly amortizations for the incident to the extension of credit;
said account were deducted from his monthly salary, for which he was
issued receipts. He resigned tho. So, he was informed of his remaining utang (5) the total amount to be financed;
with DBP. On July 24, 1987, Arcilla signed three Promissory Notes. He was
also obliged to pay service charge and interest. He also agreed to increase (6) the finance charges expressed in terms of pesos and centavos;
(with notice to him) the "rate of interest on the loan, as well as all other fees and
and charges on loans and advances pursuant to such policy as it may adopt
from time to time during the period of the loan. DBP agreed to grant Arcilla
(7) the percentage that the finance charge bears to the total amount
additional cash advances and was, thus, consolidated to the outstanding
to be financed expressed as a simple annual rate on the outstanding
balance.
unpaid balance of the obligation.

However, he failed to pay his loan account, advances, penalty charges and
Under Circular No. 158 of the Central Bank, the information required by
interests which, as of October 31, 1990, amounted to ₱241,940.93.
R.A. No. 3765 shall be included in the contract covering the credit
transaction or any other document to be acknowledged and signed by the
DBP rescinded the Deed of Conditional Sale by notarial act on November 27, debtor.
1990, but gave Atty. the right to repurchase in 2 years. DBP reiterated the
said offer on October 7, 1992. Arcilla failed to respond. Consequently, the
Furthermore, the contract or document shall specify additional charges
property was advertised for sale at public bidding on February 14, 1994.16

EFFECT IF THE BORROWER IS NOT DULY INFORMED: The lender will

Atty now files a complaint alleging violation of Truth in Lending Act.
have no right to collect such charge or increases thereof, even if stipulated in
the promissory note.22 However, such failure shall not affect the validity or
ISSUE: WON THE BANK VIOLATED THE LAW? NO. enforceability of any contract or transaction. 23

THE LAW Section 1 of R.A. No. 3765 provides that prior to the
consummation of a loan transaction, the bank, as creditor, is obliged to
furnish a client with a clear statement, in writing, setting forth, to the extent
applicable and in accordance with the rules and regulations prescribed by
the Monetary Board of the Central Bank of the Philippines, the following
information:
(1) the cash price or delivered price of the property or service to be
acquired;
(2) the amounts, if any, to be credited as down payment and/or
trade-in;
In the present case, DBP failed to disclose the requisite information in the
disclosure statement form authorized by the Central Bank, but did so in the
loan transaction documents between it and Arcilla.
Despite the notarial rescission of the conditional sale in 1990, and DBP's
subsequent repeated offers to repurchase the property, the latter maintained
his silence.
Contrary to appellee's claim that he was not sufficiently informed of the
details of the loan, the records disclose that the required informations were
readily available in the three (3) promissory notes he executed.
Plus, lawyer siya, alam niya pinapasok niya dapat.
PAYMENT FUNCTION – BANK DEBIT SYSTEM – REMITTANCE
SERVICE
PCIB VS CUSTODIO
MEJO PROCEDURAL ANG LAMAN NG KASO; CIV PRO; AN
ALLEGATION ON THE COMPLAINANT’S PLEADINGS EFFECTIVELY
ADMITTED THAT THE BANK WAS NOT NEGLIGENT. SEE THE HELD
Dennis Custodio (Custodio) had a door-to-door dollar remittance business.
Respondent Wilfredo D. Gliane (Gliane) was one of his agents in Saudi
Arabia.
Gliane collected dollars from overseas workers in Saudi Arabia to be
remitted to their beneficiaries in the Philippines.
The procedure they adopted in remitting dollars was to course them
through regular clients of PCIB (in partnership with a Saudi Arabian bank)
who, having established a good relationship with the bank, enjoyed special
foreign exchange rates with it. One of those clients was respondent Rolando
Francisco (Francisco) and his wife (JOINT ACCOUNT).
Francisco later availed of a Foreign Bills Purchase Line agreement. There
was a stipulation that:
If a check is returned/dishonored for any reason whatsoever, we
shall immediately, without need of demand, pay [the bank];
debited from any of our accounts with any of [the bank’s] branches
So may tumalbog na checke si Francisco which prompted PCIB to debit from
their PCIB-Greenhills account. In the meantime or on May 17, 1998, Gliane
remitted US$42,300 to the above-said joint account of Francisco at the PCIB-
Greenhills. Before that, however, Francisco himself had asked Custodio to
desist from remitting dollars to him from Saudi Arabia because PCIB-
Greenhills had imposed a higher exchange rate on him (Francisco). Custodia
now instructed Gilane to course the remittances through another person’s
account with PCIB.
Kaso, it was too late kasi naiapply na ni bank yung remittance sa utang ni
Francisco.
Custodio and Gliane now files a case against the bank and Francisco spouses
to recover the money
RTC held PCIB solely liable to pay US$42,300 to Custodio and Gliane, it
decreed that PCIB had the right of reimbursement  of the amount from
Francisco.
CA freed PCIB of any liability and held Francisco solely liable to Custodio
and Gliane. But later on changed its decision upon motion of the parties.
ISSUE: WON it was correct to hold the bank liable? No.
HELD: The entry reflecting the debiting of the US$85,000 against Francisco’s
account with PCIB-Greenhills is dated May 19, 1998, 4:45 P.M, local
time.56 Gliane and Custodio argue that "it is of standard operating policy of
any banking institutions that the regular "holding period" of money transfers
is more or less three (3) days." 57 They failed to prove, however, that PCIB
had that policy, or that the contract under the Express Padala service of PCIB
provided for a three-day holding period. Furthermore, PCIB could not be
faulted for the dispatch with which it credited the US$42,300 to Francisco’s
account. As it argued:
HOWEVER, Gliane and Custodio themselves admit that time was of the
essence in PCIB’s discharge of its obligation under its Express Padala
service:
x x x [W]hen petitioner’s personnel in Saudi Arabia [marketed] and
[e]nticed respondents Custodio and Gliane to course their money
remittances through petitioner bank, they fully assured
respondents of a special privilege, one of which is the speed of
transfer and as a matter of fact respondents’ money transfers are
always noted with the word "PRIORITY".59 (Capitalization and
emphasis in the original; underscoring supplied)