The Securities and Exchange Commission (SEC) said the moratorium on new online lending platforms (OLPs) remain in effect amid rising number of complaints from consumers.
The corporate regulator imposed the moratorium in response to the emergence of financial technology companies engaging in predatory lending, taking advantage of cash strapped Filipinos in need of quick loans by charging high interest rates and imposing strict payment terms.
“To date, the Commission has not lifted the moratorium imposed above. Thus, only those OLPs previously approved by the Commission may operate,” the SEC’s Corporate Governance and Finance (CGFD) said.
The SEC has revoked the license of Cashtrees Lending Corp. for launching and operating unregistered OLPs amid a moratorium imposed by the regulator.
In an order dated March 16, the SEC found that Cashtrees committed eight violations of SEC Memorandum Circular No. 10, Series of 2021, which provides for the Moratorium of New Online Lending Platforms.
Cashtrees also committed eight violations of SEC Memorandum Circular No. 19, Series of 2019, which provides the Disclosure Requirements on
Advertisements of Financing Companies and Lending Companies and Reporting of OLPs.
The findings were supported by the results of the joint operation of the SEC
Enforcement and Investor Protection Department (EIPD) and the Philippine National Police Anti-Cybercrime Group on February 12 for the implementation of a Warrant to Search, Seize, and Examine Computer Data against Cashtrees.
In its report following the operation, the EIPD found Cashtrees to have launched and operated eight unrecorded OLPs, namely Rush Loan, Easy Money, Good Pocket, Lucky Start, Swipe Cash, 365 Cash, Mega Loan, and Gold Peso, after the moratorium on new OLPs took effect on November 2, 2021.
In launching and operating the eight OLPs, the CGFD said, Cashtrees also violated SEC MC 19, which requires lending and financing companies to report their OLPs to the Commission prior to their launch and operation. Lending companies must also disclose in their advertisements and OLPs specific information, such as their corporate names, SEC Registration Numbers, and Certificates of Authority.
The revocation of Cashtrees’ CA brings to 37 the total number of financing or lending companies with cancelled licenses due to various violations of SEC rules and regulations.
To date, the SEC has also revoked the primary registration of a total of 2,082 lending companies for their failure to secure the requisite secondary license – a Certificate of Authority to Operate as a Lending/Financing Company – pursuant to Republic Act 9474 or the Lending Company Regulation Act of 2007 and for other violations.
The Commission likewise ordered 72 online lending applications to cease operations for lack of authority to operate as a lending or financing company last year.