Cathay Financial Holdings on behalf of CUB in response of the acceleration clauses of cash card & loan contracts in violation of Fair Trade Law, reported by media

2006-12-15

1.Name of the reporting media:Economic Daily News、United Daily News、 Chinatimes、Apple Daily、Libertytimes. 2.Date of the report:2006/12/15 3.Content of the report:The Fair Trade Committee investigated the acceleration clauses of loan contracts in banks and insurance companies in total of 110 and found that over 60% of them may violate the law. In consumer loan contract, it is improper to legally bind borrowers to accelerate payments or ask them to abide by uncertain summary clauses. Cathay United Bank (CUB) is one of the companies to have acceleration clauses of cash card and loan contracts in violation of Fair Trade Law No.24 and was fined NT$1.5 million by Fair Trade Committee. 4.Summary of the information provided by investors:N/A 5.Company's explanation of the reportage or provided information:It is reported that the acceleration clause of CUB's cash card and loan contracts may violate the Fair Trade Law. It will not have negative influence to the rights of our customers, as well as stockholders for we have not exercised such clauses. 6.Countermeasures:We will re-examine current contracts after we receive the legal document. We shall inform our customers the improper clauses no longer apply, if any. 7.Any other matters that need to be specified:N/A