SEC halts new online lending registration

MANILA, Philippines — The Securities and Exchange Commission (SEC) has issued a moratorium on the registration of new online lending platforms or OLPs of financing and lending companies in a move to stop abusive online financing and lending practices.

The SEC said the moratorium would take effect immediately and until formally lifted by the commission.

The moratorium was issued by the SEC ahead of the release of new rules that will govern the licensing and registration of the OLPs of financing and lending companies.

The SEC said it has received numerous complaints relating to alleged violations by OLPs of existing regulations on the operation of, and the provision of lending and financing services, which resulted in the imposition of appropriate sanctions on erring entities.

“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 Aquino said.

“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,” Aquino said.

The SEC said OLPs which have been recorded by the commission prior to the moratorium may continue to operate and be used for online lending or financing.

These existing OLPs will be subjected to strict monitoring, audit, and review to ensure their compliance with all applicable laws, rules, and regulations, according to the SEC.

The SEC to date has cancelled the licenses of 35 financing/lending companies due to various violations of applicable rules and regulations.

The certificate of registrations of   2,081 lending companies have also been revoked by the commission for their failure to secure the requisite certificate of authority, pursuant to the Lending Company Regulation Act of 2007.

In addition, 58 online lending applications have been ordered to cease operations for lack of authority to operate as a lending or financing company.