MANILA, Philippines — The Securities and Exchange Commission (SEC) said no new online lending platforms are allowed to operate in the country due to an existing moratorium it imposed in November last year.
The SEC imposed the moratorium following complaints from consumers about the proliferation of companies that engage in predatory lending practices.
In line with this, the SEC revoked the license of Cashtrees Lending Corp. for launching and operating unregistered online lending platforms despite the moratorium.
“To date, the SEC has not lifted the moratorium imposed above. Thus, only those online lending platforms previously approved by the SEC may operate,” the corporate watchdog said.
The revocation of Cashtrees’ license brings to 37 the total number of lending companies with cancelled licenses due to various violations of SEC rules and regulations.
The SEC has revoked the primary registration of 2,082 lending companies for failure to secure the requisite secondary license – a certificate of authority to operate as a lending company – pursuant to Republic Act 9474, or the Lending Company Regulation Act of 2007 and for other violations.
The SEC has also ordered 72 online lending applications to cease operations for lack of authority to operate as a lending or financing company last year.
According to the SEC, Cashtrees committed eight violations of SEC Memorandum Circular 10, which provides for the Moratorium of New Online Lending Platforms.
Following an investigation, the SEC Enforcement and Investor Protection Department (EIPD) and the Philippine National Police Anti-Cybercrime Group found Cashtrees to have launched and operated eight unrecorded lending platforms.
These platforms are Rush Loan, Easy Money, Good Pocket, Lucky Start, Swipe Cash, 365 Cash, Mega Loan, and Gold Peso.
Cashtrees also violated the SEC’s disclosure requirements with regard to their advertisements.
The SEC requires companies to register their online lending platforms as business or trade names, and to report any platform which they plan to develop, operate, or utilize no later than 10 days before their launch.
“To date, [Cashtrees] has not submitted any such report and, despite such failure, commenced operations of the said online lending platforms nonetheless,” according to the SEC.
The SEC also discovered lapses in Cashtrees’ compliance with regards to its existing lending platforms namely Happylend, Credit Cash, and Cashmore.
“Due to the multiple violations ... committed by (Cashtrees) in launching the eight unrecorded online lending platforms and due to the additional violations committed by (Cashtrees) in its failure to comply with regard to its three recorded OLPs, (Cashtrees) showed its wanton disregard of the Commission’s rules and regulations,” the order said.
“As the online lending industry is strictly regulated, companies who are either unwilling or unable to comply with the rules imposed cannot be allowed to continue to operate,” the SEC also said.