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Friday, April 19, 2024

SEC issues stern warning to online lenders

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The Securities and Exchange Commission (SEC) on Thursday said it will revoke the license of lending and financing companies that will not register their online lending platforms as business names and disclose all their existing online lending platforms.

The SEC, which issued its warning in its June 22 notice, seeks to cleanse the roster of lending and financing companies with potentially abusive operators that prey on Filipino borrowers.

“Continuous failure to comply despite being given notice of violations and an opportunity to make the necessary corrections shall constrain the commission to revoke the company’s certificate of authority to operate as a financing/lending company,” the SEC said.

In 2019, all lending and financing companies were required to report their online platforms to the SEC and register them as business names under SEC Memorandum Circular No. 19, Series of 2019.

The agency also directed lending and financing companies to display on their advertisements and platforms, their respective corporate names, SEC registration numbers and certificate of authority numbers.

The memorandum circular also reiterated the requirement for lending and financing companies to disclose to their borrowers the interest rates and all other imposable charges before the consummation of loan transactions as mandated by the Truth in Lending Act.

So far, the SEC has penalized several companies for the late filing of reports, while show cause letters have been issued against 33 lending and financing companies for operating unregistered platforms.

The agency may impose a fine of up to P1 million to lending and financing companies which continuously fail to comply with its regulation. Noncompliance may also lead to their suspension for 60 days, or the revocation of their certificates of authority.

To date, the SEC has revoked the primary registration of a total of 2,081 lending companies for their failure to secure the requisite certificate of authority.

Read full article on BusinessMirror

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