Section 2
SEC. 2. The same Act is hereby amended by adding the following sections after section two thereof, which read as follows: "SEC. 2-A. The following entities shall not be considered as banking institutions but shall be subject to regulation by the Monetary Board which may include, but need not be limited to, the imposition of net worth to risk assets ratios, reserve requirements, and interest rate ceilings: "(a) Entities regularly engaged in the lending of funds or purchasing of receivables or other obligations with funds obtained from the public through the issuance, endorsement, or acceptance of debt instruments of any kind for their own account, or through the issuance of certificates of assignment or similar instruments with recourse, trust certificates, or of repurchase agreements, whether any of these means of obtaining funds from the public is done on a regular basis or only occasionally; "b) Entities regularly engaged in the lending of funds which receive deposits only occasionally; and "(c) Trust companies, building and loan associations, and non-stock savings and loan associations, but such non-deposit accepting entities shall continue to be supervised and regulated by the Monetary Board under the pertinent provisions of this Act, and/or Republic Act Nos. 265 and 3779. "SEC. 2-B. The operations and activities of non-bank financial intermediaries, except insurance companies, shall be subject to regulation by the Monetary Board which may include, but need not be limited to, the imposition of constraints covering the (a) Minimum size of funds received, (b) Methods of marketing and distribution, (c) Terms and maturities of funds received, and (d) Uses of funds: Provided, however, That, if such entities are found by the Central Bank to be performing quasi-banking functions, they may be further subject to regulation under Section Two-A of this Act. "SEC. 2-C. The Monetary Board may, at its discretion, prescribe control ratios, ceilings, limitations, or other forms of regulation on the different types of contingent accounts of banking institutions and non-bank financial intermediaries performing quasi-banking functions. "SEC. 2-D. For purposes of Sections Two, Two-A, Two-B, and Two-C the following definition of terms shall apply: "(a) 'Public' shall mean twenty or more lenders; "(b) 'Quasi-Banking Functions' shall mean borrowing funds, for the borrowers's own account, through the issuance, endorsement or acceptance of debt instruments of any kind other than deposits, or through the issuance of participations, certificates of assignment, or similar instruments with recourse, trust certificates, or of repurchase agreements, from twenty or more lenders at any one time, for purposes of relending or purchasing of receivables and other obligations: Provided, however, That commercials, industrial, and other non-financial companies, which borrow funds through any of these means for the limited purpose of financing their own needs or the needs of their agents or dealers, shall not be considered as performing quasi-banking functions; "(c) 'Financial intermediaries shall mean persons or entities whose principal functions include the lending, investing or placement of funds or evidences of indebtedness or equity deposited with them, acquired by them, or otherwise coursed through them, either for their own account or for the account of others; "(d) 'Regulation' shall mean the issuance of rules of conduct or the establishment of modes or standards of operations for uniform application to all institutions or functions covered, taking into consideration in determining such coverage the distinctive character of the operations of institutions and the substantive similarities of specific functions to which such rules, modes, or standards are to be applied: Provided, That, if the circumstances so warrant as determined by the Monetary Board, any of these institutions may be subject to special examination; and "(e) Supervision shall include not only the issuance of rules, but also the overseeing to ascertain that regulations are complied with, investigating, or examining to determine whether an institution is conducting its business on a sound financial basis, and inquiring into the solvency and liquidity of the institution;"