SEC Steps Up Campaign Against Illegal Online Lenders
The Securities and Exchange Commission (SEC) has issued a new warning against loan and finance companies that fail to register and disclose their online lending platforms (OLP).
As it continues to weed out abusive OLP operators, the SEC said in a June 22 notice that it would revoke the licenses of all non-compliant entities.
In 2019, the SEC required all loan and finance companies to report their PLOs and register their business names. They were also required to display on their advertisements and PLOs their respective company names, SEC registration numbers, and certificate of authority numbers.
Loan and finance companies were also required to disclose interest rates and all other charges to their borrowers prior to the completion of loan transactions, in accordance with the Truth in Lending Law or the Law of the Republic. No. 3765.
Under this law, loan and finance companies must include in their advertisements and PLOs a notice to potential borrowers to study the terms and conditions stated in the disclosure statement before proceeding with the loan transaction.
These entities are required to submit an affidavit listing all of their PLOs that existed prior to the issuance of the SEC Memorandum Circular No. 19, Series of 2019, which required the registration and reporting of these platforms.
They must also report new PLOs no later than 10 days before starting to operate new platforms. “Registration and disclosure requirements allow closer tracking of online lending and financing activity and provide additional protection for borrowers against predatory lending,” the SEC said.
A total of 86 loan and finance companies registered their online lending platforms with the SEC as of April 7, 2021. The list of authorized lenders is published on the SEC website.
So far, the SEC has penalized several companies for late filing of reports, while letters of justification have been sent to 33 loan and finance companies for operating unregistered PLOs.
The SEC may impose a fine of up to P1 million on loan and finance companies that continually fail to comply with SEC Circular No. 19. Failure to comply may also result in their suspension for 60 days. or revocation of their authority certificates.
To date, the business watchdog has revoked the master registration of a total of 2,081 loan companies for their failure to obtain the required certificate of authority under the Company Regulation Act 2007 loan. INQ
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