SEC suspends registration of new online lenders

The Securities and Exchange Commission (SEC) has placed a moratorium on the registration of new online lending platforms (OLPs) from finance and lending companies ahead of the release of new guidelines aimed at stopping predatory lending.

The SEC issued a circular on November 2 that provided for the moratorium in anticipation of the release of new rules that will cover the licensing and registration of PLOs of finance and loan companies.

“We are currently developing new guidelines that will enable lending and finance companies to better meet the needs of borrowers and, at the same time, close the loopholes that give rise to abusive and predatory practices,” said the president of the SEC, Emilio B. Aquino, in a statement. Friday.

“We have seen the emergence of fintech companies that engage in predatory lending, taking advantage of those in financial difficulty during the pandemic. The commission will work to root out these abusive finance and lending companies that only put borrowers further into debt,” he added.

The SEC said it would subject existing PLOs to strict oversight, auditing and review to certify their compliance with all laws and regulations.

The regulator also confirmed that PLOs can continue operations and be used for online lending and funding, adding that the platforms were registered before the moratorium.

To date, a total of 35 finance and loan companies have had their licenses revoked due to various violations of applicable rules and regulations, according to the SEC.

In addition, 58 online loan applications were directed to stop operations due to lack of authority to operate as a loan or finance company.

“The certificate of registration of a total of 2,081 loan companies has also been revoked by the SEC for their failure to obtain the required certificate of registration.

authority, pursuant to Republic Act No. 9474 or the Regulation of Credit Companies Act of 2007,” the regulator said. — Revin Mikhael D. Ochave

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