SEC suspends 104 lending firms

MANILA, Philippines - The Securities and Exchange Commission (SEC) has suspended 104 erring lending companies in the first four months of the year even as the corporate regulator noted a nearly 500 percent increase in the number of lending companies registered during the period.

Lending companies charge exorbitant rates and usually do not have the proper license from the SEC to extend loans to individuals or entities.

The SEC is also set to revoke the primary licenses of those that fail to have their suspension orders lifted by May 22, the SEC said.

In a report to Finance Secretary Carlos Dominguez III, SEC commissioner Emilio Aquino said they would continue to tighten their watch over lending companies suspected of either violating the law or not complying with SEC requirements.

Aquino, the supervising commissioner for enforcement, said the monitoring would be expanded in the cities of Baguio, Tarlac, Legazpi, Cebu, Cagayan de Oro, Iloilo, Zamboanga and Davao.

“In addition to the 84 lending companies whose primary licenses were suspended on March 7 for failure to obtain a certificate of authority (CA), the Commission suspended the primary licenses of 20 more lending companies on April 6 for the same reason,” Aquino said.

“The commission will revoke the primary license of the suspended lending companies once they fail to secure from the SEC an order lifting their suspension before May 22,” he added.

He noted a significant 477 percent increase in the registration of lending companies from January to April. There are now 248 new lending companies registered in the first four months of this year compared to only 43 last year.

As part of its campaign against erring lenders, the SEC assisted 143 aggrieved borrowers from all over Central Luzon in filing a criminal case against the officers and board directors of a lending company in Nueva Ecija; and an aggrieved borrower in filing a criminal case against an illegal foreign lender based in Makati City.

In the Makati case, the SEC also assisted the complainant in filing a petition for deportation against the foreigner-lender before the Bureau of Immigration, Aquino said.

The SEC began its crackdown against loan sharks and other illegal lenders in October last year as part of the Duterte administration’s campaign against erring lenders.

Over 200 informal lenders have already applied for registration with the commission after it initiated the crackdown.

SEC chairperson Teresita Herbosa said the agency has already issued two advisories to inform the public about prohibited lending practices under the law and encourage informal lenders.

In its advisory, the SEC warned informal lenders facing complaints for violations of RA 9474 and/or those engaging in “fraudulent, oppressive and illegal practices in lending to borrowers including those violating the Truth in Lending Act,” that they will be investigated for possible prosecution.