The Securities and Exchange Commission (SEC) has issued a new warning against lending and financing companies that fail to register and disclose their online lending platforms (OLPs).
As it continues to eradicate violent OLP operators, the SEC said in an advisory dated June 22 that it would revoke the licenses of all incompatible devices.
In 2019, the SEC required all lending and financing companies to report their OLPs and register their company names. They were also asked to display their respective company names, SEC registration numbers and authority numbers on their ads and OLPs.
Lending and financing companies were also required to inform their borrowers of interest rates and all other fees prior to the conclusion of loan transactions, as required by the Truth or Republic Act No. 3765.
According to this law, lending and financing companies must include in their advertisements and OLPs an advice for potential borrowers to examine the terms and conditions of the disclosure statement before proceeding with the loan transaction.
These entities are required to submit an affidavit listing all of their OLPs that existed prior to the issuance of SEC Memorandum Circular No. 19, Series of 2019, which required registration and reporting of these platforms.
They must also report new OLPs no later than 10 days before they start operating new platforms. “Registration and disclosure requirements allow for closer monitoring of lending and financing activities online and provide additional protection for borrowers against predatory lending,” the SEC said.
A total of 86 lending and financing companies registered their online lending platforms with the SEC on April 7, 2021. The list of authorized lenders is published on the SEC’s website.
So far, the SEC has punished several companies for the late submission of reports, while letters have been issued to 33 lending and financing companies for the operation of unregistered OLPs.
The SEC may impose lending and financing on companies that do not continuously comply with SEC Memorandum Circular No. 19, a fine of up to P1 million. Failure to comply may also result in their suspension for 60 days or revocation of their certificates of authority.
To date, the company guard has revoked the primary registration of a total of 2,081 lending companies for their failure to secure the required authority certificate under the Lending Company Act in 2007. INQ
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