SEC orders 7 online lenders to halt ops due to lack of licenses

The Securities Exchange Commission (SEC) said Tuesday it ordered eight online lending companies to halt their activities without the necessary licenses.

In a February 8 Commission En Banc order, the SEC directed PesoBee, Peso T-Safe Online Cash, RushLoan, SkyMart, SpendCash, Tapa, and WithU, “to immediately cease and desist from operating, engaging in, carrying out, abetting, and/or promoting lending/financing businesses and related activities until they have incorporated and secured from the SEC authorization to pursue such activities.”

“The companies, their agents, representatives, and promoters, as well as the owners and operators of their hosting sites, were further enjoined to cease from offering and/or advertising their lending business and related business through the internet or any other media, and to remove all materials involving such,” the corporate regulator said in a statement.

The SEC said it issued the order after finding that none of the groups were registered as a corporation with the commission.

The seven online lenders also allegedly lacked the Certificates of Authority to Operate as a Lending/Financing Company (CA), according to the SEC.

Republic Act No. 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.

“[T]he Commission finds that the continued operation of the Online Lending Operators constitutes a clear violation of, and should be penalized pursuant to the [LCRA] because it engages in or carries out a lending business without the required license form the Commission,” the Commission En Banc held.

“The acts of the 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,” it added.

The SEC said it further found that the online lending operators were imposing “onerous and unreasonable terms,” charging high interest rates, and performing acts that violate the right to privacy of their borrowers.

The corporate regulator noted that it regularly monitored lending and financing companies for their compliance with applicable laws, rules, and regulations, as it seeks to protect borrowers from abusive, unethical, and illegal lenders.

To date, the commission said it canceled the licenses of 36 financing or lending companies due to various violations of applicable rules and regulations.

The corporate regulator added that it revoked the certificates of registration of 2,081 lending companies for their failure to secure the requisite certificate of authority, pursuant to the LCRA.

In total, 73 online lending applications have been ordered to cease operations for lack of authority to operate as a lending or financing company, according to the SEC. — DVM/BM, GMA News

This article has been updated on February 16, 2022 to remove Cashwill from the list, based on a correction from the Securities and Exchange Commission.