Soco: Regulate loan interest rates, other fees

CEBU, Philippines —  Cebu Sixth District Provincial Board Member Glenn Anthony Soco has proposed an ordinance regulating and overseeing the imposition and charging of interest rates and other fees by unregistered entities or persons extending loans or credit on all forms.

Soco sponsored a proposed ordinance providing for ceiling/s on interest rates and other fees charged by lending companies, financial companies, online lending platforms and all other entities or individuals extending loans and/or credit in all forms.

The proposal was considered on first reading last Monday’s PB regular session and was referred to the Committee on Laws and Ordinances, and the Committee on Commerce and Industry.

According to Soco, most small-time lending persons or entities charge or impose exorbitant interest rates and other fees on their unsecured, short-term, small value and high-cost consumer credit, thereby causing Filipinos, especially those in the low-income bracket, to fall into debt traps.

He said that it is common knowledge that there is rampancy of persons or groups who are offering loans to small time business owners and even households, on all forms and terms. Most would even require chattel or real estate mortgage to guarantee payment without the execution of proper and valid documents, causing foreclosure of properties without due process of law.

“The Sangguniang Panlalawigan is informed that lending persons/groups offering loans which impose sky-high interest rates and unreasonable terms are offered under “5-6” schemes, daily payment of interests, confiscation of ATM cards for payroll and even pension cards, to name a few. These practices are not sanctioned by law and are thus illegal,” Soco said.

Soco added that the practice of these lending facilities or individuals, especially those considered as “fly-by-night” must be stopped in order to protect Cebuanos from these illegal, onerous, oppressive and unscrupulous financial activities designed by exploitative individuals or businesses preying on innocent and desperate citizens.

“Rates must be fair, just and within the acceptable ceilings as prescribed by regulations. By ordaining this ordinance, the Province can monitor and regulate these practices in order to promote free but fair entrepreneurial practices,” he further said. (FREEMAN)