Ban on new online lending companies remains in effect – SEC
MANILA, Philippines — The Securities and Exchange Commission (SEC) said no new online lending platforms were allowed to operate in the country due to an existing moratorium it imposed in November of l ‘last year.
The SEC imposed the moratorium following consumer complaints about the proliferation of companies engaging in predatory lending practices.
With this in mind, the SEC revoked the license of Cashtrees Lending Corp. for launching and operating unregistered online lending platforms despite the moratorium.
“To date, the SEC has not lifted the moratorium imposed above. Thus, only online lending platforms previously approved by the SEC can operate,” the company watchdog said.
The revocation of Cashtrees’ license brings to 37 the total number of loan companies whose licenses have been revoked due to various violations of SEC rules and regulations.
The SEC revoked the primary registration of 2,082 loan companies for failing to obtain the required secondary license – a certificate of authority to operate as a loan company – pursuant to Republic Act 9474 or Loan Companies Regulation Act 2007 and for other violations.
The SEC also ordered 72 online loan applications to cease operations for failing to be licensed to operate as a loan or finance company last year.
According to the SEC, Cashtrees has committed eight violations of SEC Circular Memorandum 10, which provides for the moratorium on new online lending platforms.
Following an investigation, the SEC Enforcement and Investor Protection Department (EIPD) and the Philippine National Police Anti-Cybercrime Group found that Cashtrees had launched and operated eight unregistered lending platforms.
These platforms are Rush Loan, Easy Money, Good Pocket, Lucky Start, Swipe Cash, 365 Cash, Mega Loan and Gold Peso.
Cashtrees also violated SEC disclosure requirements with respect to their advertisements.
The SEC requires companies to register their online lending platforms as trade or business names and to report any platform they plan to develop, operate or use no later than 10 days before their launch.
“Nowadays, [Cashtrees] has not submitted any such report and, despite this failure, has nevertheless commenced operations of said online lending platforms,” according to the SEC.
The SEC also found gaps in Cashtrees’ compliance with respect to its existing lending platforms, namely Happylend, Credit Cash and Cashmore.
“Due to the multiple violations … committed by (Cashtrees) in launching the eight unregistered online lending platforms and due to the additional violations committed by (Cashtrees) in its non-compliance with its three registered PLOs, (Cashtrees) has shown his blind disregard for the rules and regulations of the Commission,” the order reads.
“Because the online lending industry is tightly regulated, businesses that are unwilling or unable to comply with the imposed rules cannot be allowed to continue operating,” the SEC also said.