SEC revokes registration of 2,081 lending firms

MANILA, Philippines — The Securities and Exchange Commission has revoked the registration of 2,081 lending companies for their failure to secure certificates of authority.

The SEC has also canceled the licenses of 36 financing and lending companies due to various violations of applicable rules and regulations.

In addition, 60 online lending applications have been ordered to cease operations for lack of authority to operate as a lending or financing company.

Republic Act 9474 or the Lending Company Regulation Act of 2007 (LCRA) requires persons or entities operating as lending companies to register as corporations and to secure from the SEC the necessary authority to operate.

The SEC said it continues to receive complaints about companies’ unfair collection processes, including the posting of libelous statements against borrowers on social media and the sending of such statements to their phone contacts.

“The acts of these unregistered online lending operators in illegally offering and providing loans to the public, charging high interest rates, and subjecting its debtors to unfair treatment through abusive and even libelous language in collecting the loaned amount, have no place in a society that is governed by and faithfully adheres to positive laws,” the SEC said.

It recently issued a cease and desist order against two lending entities, Goodpocket and Easymoney Lending Corp.

The SEC directed Goodpocket and Easymoney to immediately cease and desist from engaging in any lending activity until they have secured the necessary approval and authorization from the SEC.

The two entities have been conducting lending activities despite not being registered as a corporation. Both companies have no certificates of authority to operate as a lending or financing company.

“Thus, the act of these online lending operators in offering and providing loans to the public constitutes actual fraud, which was intentionally employed to lead the public into the belief that they are legally authorized to engage in the lending business, which is not and has never been the case,” the SEC said.