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May 27, 2024

SEC ramps up crackdown vs illegal lenders

The Securities and Exchange Commission (SEC) remains relentless in its campaign against illegal and abusive lenders, and has revoked the registration of 2,081 firms and secured the conviction of 76 individuals in eight cases for violations of the Lending Company Regulation Act (LCRA).

In a report to Finance Secretary Carlos Dominguez III, the SEC chairman Emilio Aquino said the agency has issued cease and desist orders (CDOs) against 73 online lending apps and cancelled the licenses of 36 financing or lending companies for various violations.

“We are also creating a Financing and Lending Companies Division within the SEC to focus exclusively on the regulation and monitoring of these entities,” Aquino said.

Dominguez asked Aquino to intensify its crackdown against illegal and abusive lending companies, as “these are proliferating” with several of them charging very high-interest rates.

Aquino said the SEC would also focus its campaign on abusive lending companies following complaints received by the commission from consumers about the collection practices of these firms that involve threatening or insulting borrowers.

The regulator has an online team that conducts regular sweeping operations, monitors all complaints, and goes through the different social media platforms to check on possible abusive or illegal lending practices.

For this year, the SEC began its crackdown against illegal lenders with its successful operation against Cashtrees Lending Corp.

It has also been conducting its crackdown in coordination with the Philippine National Police (PNP) Anti-Cybercrime Group. Both agencies were able to secure a warrant to search, seize and examine Cashtrees’ computer data at its offices in Pasay City.

The digital forensic examination done on Cashtrees revealed that a majority of the OLAs handled by the company such as Goodpocket, Easymoney, 365 Cash, and Rushloan were unregistered with the SEC.