Fuhwa Commercial Bank Co. Ltd.

Case:

Key Words:

commercial bank, interest rate, housing loan

Reference:

Fair Trade Commission Decision of May 31, 2007 (the 812th Commissioners' Meeting); Disposition Kung Ch’u Tzu No. 096103

Industry:

Banks (6412)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:

1. Fuhwa Commercial Bank Co. Ltd. (hereinafter called "Fuhwa Bank") was a bank which handled residential loans. In the process of handling the loans, it did not provide the conditions, "discharge at any time," for the borrower’s choices without restraints; additionally, the provision on advance the date of discharge for contract violation under the agreement was not the special clause for the purpose of individual negotiation and the bank had not sought for the borrower’s agreement on such a term. Fuhwa Bank violated the provisions of the Fair Trade Law.
2. Findings of FTC after investigation: Fuhwa Bank claimed to provide the more favourable credit conditions under the circumstance of the lock-out period for the borrower; and if the borrower does not accept the conditions provided by Fuhwa Bank, he can rather give up the loan or choose to go to other banks. Although there was no phrase, "discharge at any time," presented in the agreement and the borrower could choose a scheme without restraints indeed, Fuhwa Bank admitted that it did not provide the conditions for the scheme, "discharge at any time," in writing – it only orally explained them to the borrower. In addition, it could not bring up the evidence that it surely provided the conditions for the schemes "discharge at any time" and "restrict the period of discharge" in writing for the borrower’s choices without restraints at the time of the conclusion of the agreement. As a result, the FTC found that Fuhwa Bank indeed did not provide the abovementioned schemes for the borrower’s choices without restraints and it violated Article 24 of the Fair Trade Law.
3. After taking into account the factors, the motive, objective of the unlawful acts of Fuhwa Bank, the degree of the unlawful act’s harm to trading order, the duration of the actions, scale of business, operation condition, types and number of and intervals between past violations, remorse shown for the act and attitude of cooperation in the investigation, the FTC ordered Fuhwa Bank to immediately cease the aforesaid unlawful acts and imposed an administrative fine of NT$400,000 in accordance with the fore part of Article 41 of the Fair Trade Law.

Appendix:
Fuhwa Commercial Bank Co. Ltd.'s Uniform Invoice Number: 86517315

Summarized by Tsao, Hui-Wen; Supervised by Chen, Yuhn-Shan