SEC suspends registration of new online lending platforms

The Securities and Exchange Commission (SEC) has imposed a moratorium on the registration of new online lending platforms (OLPs) of financing and lending companies.

The moratorium took effect on Friday, November 5.

On November 2, the corporate regulator issued SEC Memorandum Circular No. 10, which provides for the moratorium, ahead of the release of new rules that will govern the licensing and registration of OLPs of financing and lending companies.
 
“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,” said SEC chairperson Emilio Aquino.
 
“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 that OLPs, which have been registered by prior to the moratorium, may continue to operate and be used for online lending or financing. 

The corporate regulator added that it would subject the existing OLPs to strict monitoring, audit and review to ensure compliance with all applicable laws, rules, and regulations.
 
The SEC said it has so far canceled the license of 35 financing/lending companies due to various violations of applicable rules and regulations.      
 
The certificate of registration of a total of 2,081 lending companies have also been revoked by the SEC for their failure to secure the requisite certificate of authority pursuant to Republic Act 9474 or the Lending Company Regulation Act of 2007.
 
Moreover, 58 online lending applications have been ordered to cease operations for lack of authority to operate as a lending or financing company. — VBL, GMA News