The legislature has put a new 15% cap on credit card and cash card interest. That’s to deal with the problem of credit card debt in society.
The new limit will go into effect on September 1.
The original proposed amendment to the Bank Act provided for a 12% cap. But Financial Supervisory Commission (FSC) Chairman William Tseng said making the cap too low would deter banks from lending.
"I agree with the direction that this is going, but if caps are too low, banks will lose out," said Tseng. "You can lend at 18, 17 and 16 [percent] interest. If banks don’t want to lend, then people will turn to loan sharks. It would be a serious problem."
About 800,000 to 900,000 households are expected to benefit from the lower cap. Banks will likely receive NT$400-500 million less in interest a year.