SEC halts registration of new online lenders
THE Securities and Exchange Commission (SEC) issued a moratorium on the registration of new online lending platforms (OLP) of financing and lending companies ahead of the release of new guidelines that seek to stop predatory lending.
The SEC issued a memorandum circular on Nov. 2 that provided for the moratorium in anticipation of the release of new rules that will cover the licensing and registration of OLPs of financing and lending firms.
“We are currently crafting new guidelines that will allow lending and financing companies to better address the needs of borrowers and, at the same time, plug loopholes that give rise to abusive and predatory practices,” SEC Chairperson Emilio B. Aquino said in a statement on Friday.
“We have seen the emergence of financial technology companies that engage in predatory lending, taking advantage of those struggling financially during the pandemic. The commission will work toward stamping out these abusive financing and lending companies that do nothing but bury borrowers in even more debt,” he added.
The SEC said it would subject existing OLPs to strict monitoring, audit, and review to certify their compliance with all laws and regulations.
The regulator also confirmed that OLPs may continue their operations and be used for online lending and financing, adding that the platforms have been recorded prior to the moratorium.
To date, a total of 35 financing and lending firms had their licenses cancelled due to various violations of applicable rules and regulations, according to the SEC.
Further, 58 online lending applications have been directed to stop operations for the lack of authority to operate as a lending or financing firm.
“The certificate of registration of a total of 2,081 lending companies have also been revoked by the SEC for their failure to secure the requisite certificate of
authority, pursuant to Republic Act No. 9474, or the Lending Company Regulation Act of 2007,” the regulator said. — Revin Mikhael D. Ochave