Pursuant to Section 2 and its powers under Section 22 of Republic Act (R.A.) No. 8367, otherwise known as the œRevised Non-Stock Savings and Loan Association  Act of 1997 , the Monetary Board, in its Resolution  No. 20 dated 5 January  2018, approved  the  following  guidelines  for  NSSLAs  to appropriately establish the true  identity and  eligibility of  persons  to  become  members  and adopt effective systems that will provide assurance that membership is confined to their respective well-defined groups.

Section 1. Section 4102S and its Subsections of the Manual of Regulations for Non-Bank Financial Institutions applicable to Non-Stock Savings and Loan Associations, are hereby added to read as follows:

œSection 4102S Know-Your-Member.  The NSSLAs shall not be used as a vehicle  by  unscrupulous   persons,  its  trustees  and  officers  to  profit  or  take advantage of their nature and operations. Thus, the board of trustees (BOT) and management  of NSSLAs  shall  be responsible  in putting  in place  and implementing an effective risk management system, policies, processes and practices towards the effective determination and monitoring of the identity and eligibility  of  prospective  and  existing  members  on  a  continuing  basis.  While NSSLAs may create their own systems, the same shall consider the minimum standards set forth under these guidelines.

The membership  of persons  whose  identity  and/or membership  are questionable and/or ineligible to become members shall cease immediately, and such persons shall solely bear any risk of loss or impairment as a result of their unauthorized membership. This shall be without prejudice to actions that may be taken against the NSSLAs concerned, their trustees, officers, employees and agents/sales representatives for misfeasance or malfeasance, irregularities or omissions,  or  other  similar  acts  which  result  in  violation  of  the  concept  of NSSLAs ™ well-defined group. 

œSubsection  4102S.1 Membership  Selection  and Screening.  An NSSLA shall develop a clearly defined and written selection and screening policies and procedures to ensure compliance with its well-defined group. The selection and screening   process   employed   by  NSSLAs   should   be  able  to  appropriately establish  the true identity and eligibility of prospective  members.  The BOT and senior  management  of  NSSLAs  shall  be  ultimately  responsible  in  the determination   of  the  true  identity  and  eligibility  of  individuals   accepted   as members. No reliance shall be made on representations by, nor shall the membership  selection  and  screening  process  be  delegated  to  or  otherwise assumed by, agents or sales representatives engaged by the associations.

a.     Minimum   Documentary    Requirements.    An   NSSLA   shall   require   a prospective   member  to  submit  documents  to  establish  his  identity  and eligibility.  It  shall  be  the  responsibility  of  the  BOT  and  management  to enumerate the documentary requirements in their respective policies as well as the consistent and effective implementation thereof. For this purpose, minimum documentary requirements include, among others, the following:

Prospective Employee-Member

Prospective Eligible Immediate Family- Member

Va lid i dentifi cati on card ( œI D ) with photo and signature issued by his/ her employer company or department/ branch/ office of government, and any of the following or t heir equi val ent as proof of eligibility:

(1 ) Certificate of employment *; or
(2 ) Certificate of compensation*; or
(3 ) Endorsement from t he company or department/ branch/ office of government.

* In case of an NSSLA whi ch is all owed to accept reti rees as its members, proofs of eligi bility appli cable f or a reti ree shall be submitted. Member-retiree is not t he same as retiree contemplated herein as the former is al ready a member pri or to retirement while t he latter is not.

Photo and signature beari ng valid I D, such as dri ver ™s license, passport or si mil ar documents, and the f ollowing as proof of eligibility:

(1 ) NSO-i ssued marri age certifi cate f or spouse; or

(2 ) NSO-issued birth certificates of the principal member (i. e., t he employee -member or member-retiree) and t he immediate family. **

**The extent of t he appli cable NSO-issued certifi cat es to be submitt ed shall depend on t he degree of kinship, and shall, on t heir f ace, be able to establish the degree of relationship.

In addition to the above requirements,  the NSSLA ™s BOT and management shall  ensure  that  the  following   minimum   information   are  obtained   and documented  in an accomplished  membership  application  form: (a) name of the  applicant;  (b)  complete  permanent  address;  (c)  contact  numbers;  (d) name  of  and  relationship   with  the  principal  (i.e.,  employee-member   or member-retiree) in case of immediate family; and (e) specimen signatures.

NSSLAs  are  not  prohibited  from  requiring  additional  documents  that  they deem necessary to establish the identity and eligibility of their prospective members.

b.     Validation  of  documents/information.  The  information  and  documents proving the identity and eligibility of prospective members shall be subjected to validation. The conduct of validation procedures is a must for immediate families of employee-member or member-retiree, and may include, but not limited to, the following:

(1)  Confirming   the   relationship   with   the   employee-member   or   retiree- member from duly authenticated official document;

(2)  Verifying the permanent address through evaluation of documents such
as utility bills, bank or credit card statement or other documents showing permanent address or through on-site visitation; and

(3)  Confirming the submitted proof of employment directly from the employer of the prospective immediate family member.

c.     Face-to-face  contact.  No  prospective  member  shall  be  accepted  without face-to-face  contact  with the NSSLAs ™  duly authorized  personnel.  NSSLAs shall ensure that compliance with this requirement is duly documented. The documentation, at a minimum, shall include the capital contribution account opening  and  membership  application  forms,  which  shall  explicitly  indicate that face-to-face  contact  was conducted  by and between  the member  and the specifically named authorized personnel. 

œSubsection 4102S.2 Approval. An individual eligible for membership shall become  a member of the NSSLA after the approval  of his membership  by the BOT. In case of delegated authority as allowed in the NSSLA by-laws, it shall be subject to the confirmation  by the BOT. Prior to the approval or confirmation  by the  Board,  the  Association  should  ensure  compliance  with  the  payment  of entrance   fee  and  regulatory   fixed  capital  or  higher  minimum   fixed  capital prescribed under the NSSLA ™s by-laws, as applicable. The Board Resolution on the   approval   or   confirmation   with   accompanying   document   on   delegated approval of the membership shall be maintained by the Corporate Secretary.

Changes in membership status arising from: (a) retirement of employee- member (i.e., from employee-member to member-retiree); and (b)termination of membership such as due to death, voluntary or involuntary termination by the NSSLA, shall likewise be subject to approval or confirmation by the BOT, as may be applicable. Such changes in membership status shall be duly supported by documentary proof/s.

Upon   approval   of  membership,   the   NSSLA   shall   issue   Certificate   of Membership   (pre-numbered)   or  Membership   ID  to  the  new  member.   Said documents  are  not  substitutable  by  passbook  or  other  similar  documents  as proof of membership. 
 
œSubsection 4102S.3 Membership Registry. The NSSLA, through the corporate secretary or board-designated person, shall maintain a registry of all its members which shall clearly identify and show the relationships of members.

Proforma of the registry which shall be maintained and timely updated by the Corporate Secretary or board-designated person is shown below:

Names of Employee o r Member -Retiree	Date of Member ship	Immediate Family Members	Date of Membership	Relationship   (Up to second degree of consangu inity or affinity)
L . Juan dela Cruz employee/retiree		1 . Maria Dela Cruz		spouse

The NSSLA may adopt a different system, provided that such system shall be able to sufficiently provide the identity and clear relationships of members. 

œSubsection 4102S.4 Membership Administration, Record Keeping and Retention.  The  corporate  secretary  or  board-designated  person  shall  be  in- charge in the maintenance and safe storage of all membership identification and eligibility records. Said person shall ensure the integrity of such files.

The original records shall be preserved and safely stored as long as the membership exists. With respect to terminated memberships,  the same shall be maintained  for at least five (5) years from the date of cessation of membership from the NSSLA unless there is a pending case involved, in which case records shall  be maintained  until  the case  is closed  with  finality.  It is understood  that original  of  the  records  are  kept  and  maintained,  and  that  other  forms  of  the records, e.g., photocopy or scanned copy, may be kept but the originals thereof are made readily available. All records shall be readily available upon request for off-site supervision or during on-site examinations/investigations by the Bangko Sentral or audit by external auditors to verify compliance with the provisions on well-defined group.

Individual  membership   file  shall  contain  each  member ™s  records,  which include at the minimum: (a) accomplished membership application form; (b) documentary  requirements  to  establish  his  identity  and  eligibility;  (c)  copy  of Board  Resolution  (BR)  of membership  approval/confirmation,  but alternatively, the  BR  No.  and  date  of  approval  may  be  stamped  on  the  accomplished application form and the BR referred to shall be made readily available; and (d) receipts or proofs for payment of fees required by by-laws and minimum capital contribution.

In case  of eligible  members  who  were  accepted  prior  to effectivity  of the circular, inclusion of the following documents in the file shall be sufficient: (a) accomplished  membership  application/update  form;  (b) documentary requirements  to  establish  identity  and  eligibility;  and  (c)  copy  of  a  proof  that capital contribution exist prior to effectivity of the circular.

Moreover, membership registry shall be updated to reflect the true status of membership of persons within the well-defined group (e.g., change in status from member-employee to member-retiree, termination of membership). In this regard, the  BOT  shall  establish  policies,  processes  and  practices  to  ensure  timely updating of status of membership and membership registry.
 
The  BOT  shall  prescribe  the  necessary adequate security  measures  to ensure the confidentiality of such files. 

œSubsection 4102S.5 Orientation of members. To empower members and address their expectations,  the BOT and management  of NSSLAs shall ensure that prospective members are provided with adequate orientation prior to the approval of their applications for membership. Such orientation shall cover their rights  and  privileges,  particularly  voting  rights;  expectations  on  earnings/net income  distribution;  participation  during  general  membership  assemblies; complaints mechanism and disclosure of results of operations, among others. 

œSubsection  4102S.6  Sanctions.  Any  violation  of  the  provisions  of  this Section and/or the provision on well-defined  group under section 4 of R.A. No. 8367 and/or the By-Laws of the NSSLA shall subject the NSSLA, its trustee/s, officer/s and agent/s to applicable sanctions as the Monetary Board may impose pursuant   to   R.A.   No.   8367   (The   Revised   Non-stock   Savings   and   Loan Association Act of 1997), these rules, and any pertinent laws or regulations. 

œSubsection 4102S.7 Transitory provisions. For existing members prior to the   effectivity   of   this   Circular,   NSSLAs   shall   comply   with   the   foregoing requirements, and attain full compliance with the determination of the identity and eligibility of such members within one (1) year from effectivity of the circular. In this regard, an NSSLA shall submit, within thirty (30) days from effectivity of the circular, its plan of action/s, duly approved by its BOT, showing measures undertaken or to be undertaken to achieve full compliance with the requirements under this Section with respect to its existing members accepted prior to the effectivity of this circular.

The  membership   in  the  NSSLA  of  the  existing  members  found  to  be ineligible  by  the  BOT  or  thru  examination  conducted  by  the  Bangko  Sentral, pursuant to the provisions of this section, shall immediately cease, and that members ™ corresponding outstanding balances shall be subject to an acceptable divestment   plan   duly   approved   by  the   NSSLA ™s   BOT.   Provided   that,   an acceptable divestment plan shall be submitted to the appropriate Department of the Bangko  Sentral  within  thirty  (30) calendar  days  from  end of the one year period  to  determine  the  identity  and  eligibility  of  existing  members,  and  the NSSLA   concerned   shall  thereafter   submit   a  detailed quarterly   status   and monitoring   report   thereon.   Provided   further   that, noncompliance with the acceptable divestment plan, as determined in off-site monitoring or on-site examinations   or   investigations   conducted   by   the Bangko Sentral, without justifiable cause/reason, shall subject the NSSLA, its trustees and/or officers to applicable enforcement action. 

Section 2. Section 4101S shall be amended to read as follows:

œSection  4101S  Statement  of  Policy  and  Scope  of  Authority  of  Non- Stock Savings and Loan Associations.

The Bangko Sentral adopts the policy of the State to lay down the minimum requirements and the standards under which non-stock savings and loan associations  (NSSLAs)  may  organize  and  operate  in  a  sound  and  efficient manner.
 
An NSSLA shall include any non-stock non-profit corporation engaged in the business  of accumulating  the savings  of its members  and using such accumulations  for  loans  to  members  to  service  the  needs  of  households  by providing   long  term  financing  for  home  building  and  development   and  for personal finance. An NSSLA may also engage in a death benefit program meant exclusively for the benefit of its members.

An NSSLA shall accept deposits from and grant loans to its members only. The NSSLAs shall provide assurance to their members and to supervisory authorities that they confine their membership to a well-defined group of persons and not to transact business with the general public. 

Section 3. Subsection 4101S.1 shall be amended as follows:

œSubsection 4101S.1 Membership.

a.     An NSSLA shall confine its membership to well-defined group of persons.

A well-defined group shall consist of any of the following:

(1)  Employees,  officers,  and trustees  of one company,  including  member- retirees;

(2)  Government employees   belonging to the   same   office,   branch,   or department, including member-retirees; and

(3)  Immediate members of the families up to second degree    of consanguinity or affinity of those falling under Items œ(l)  and œ(2)  above.

NSSLAS whose articles of incorporation and by-laws were approved and registered prior to the effectivity of R.A. No. 8367 and which limit and/or allow membership  coverage  broader  or  narrower  than  the  foregoing  definition, shall be allowed to continue as such.

The Monetary Board may, as circumstances warrant, require NSSLAs mentioned in the immediately preceding paragraph to amend their by-laws to comply with the concept of a well-defined group.

b.     In no case shall the total amount of entrance fee exceed one percent (1%) of the amount to be contributed or otherwise paid-in by the particular member: Provided That, for new members, the fee shall be based on the amount of contributions  computed  in accordance  with the revaluation  of the assets of the NSSLA. 

Section  4. This Circular  shall take effect fifteen  (15) days after its publication either in the Official Gazette or in a newspaper of general circulation.

For the Monetary Board: