SEC stops registration of online lending platforms
The Securities and Exchange Commission (SEC) announced Friday, November 5, 2021 that it has imposed a moratorium on the registration of new online lending platforms (PLOs) of finance and lending companies, with immediate effect.
The SEC Memorandum Circular 10, Series of 2021, released on November 2, orders the moratorium.
The circular describes PLOs as a type of internet finance that facilitates online lending operations to meet the financial needs of individuals and / or small and medium businesses.
It cites the “numerous complaints about alleged violations by online lending platforms of existing regulations on the operation and provision of lending and financing services” that the SEC had received as grounds for the moratorium.
The moratorium also comes as the commission prepares to issue new rules that will govern the licensing and registration of PLOs from finance and loan companies.
“We are currently developing new guidelines that will allow loan and finance companies to better meet the needs of borrowers and, at the same time, close the loopholes that give rise to abusive and predatory practices,” said the president of the SEC, Emilio Aquino.
“We have seen the emergence of fintech companies that engage in predatory lending, taking advantage of those in financial difficulty during the pandemic. The Commission will work to root out those abusive finance and loan companies that only bury borrowers in even more debt, ”Aquino said.
PLOs registered with the SEC before the moratorium can continue to operate and be used for loans or online funding. A list of these 101 PLOs appears on the SEC website.
To date, the SEC has canceled the licenses of 35 finance / loan companies due to various violations of applicable rules and regulations.
The certificate of registration of 2,081 loan companies has also been revoked by the SEC for their inability to obtain the required certificate of authority, pursuant to Republic Law 9474 or the Company Regulation Law of 2007. ready.
In addition, 58 online loan applications were ordered to cease their activities because they were not authorized to operate as a loan or finance company.
The SEC asks the public to verify whether the loan or finance company they are dealing with is licensed by browsing the list of such companies on the SEC website. (With RP)