SEC revokes Cashtrees license for violating moratorium on new online lending platforms │ GMA News Online
The Securities and Exchange Commission (SEC) revoked the license of Cashtrees Lending Corp. for operating online lending platforms despite a moratorium issued by the business regulator.
In a statement Thursday, the SEC said its Corporate Governance and Finance Department (CGFD), in an order dated March 16, found that Cashtrees had committed eight violations of Memorandum Circular No. the SEC, series of 2021, which provides for the moratorium of new online lending platforms.
As a reminder, in November last year, the corporate regulator placed a moratorium on the registration of new online lending platforms (OLPs) while the SEC drafts new guidelines that will govern licensing and registration. PLO registration of finance and loan companies.
The SEC said it imposed the moratorium in response to the emergence of fintech 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 conditions.
The corporate regulator added that Cashtrees also committed eight violations of SEC Memorandum (MC) Circular No. 19, Series of 2019, which provides disclosure requirements on advertisements by finance companies and lending companies and reporting online lending platforms.
“The findings were supported by the results of the joint operation by the SEC’s Enforcement and Investor Protection Department (EIPD) and the Philippine National Police’s Anti-Cybercrime Unit on February 12 for the implementation execution of a search, seizure and computer data examination warrant against Cashtrees,” he said.
In February, more than 45 employees of loan applications operated by Cashtrees were arrested for allegedly harassing and threatening customers unable to repay their loans within a prescribed time frame.
In its post-deal report, the SEC said the SIFT discovered that Cashtrees launched and operated eight unregistered PLOs, namely Rush Loan, Easy Money, Good Pocket, Lucky Start, Swipe Cash, 365 Cash, Mega Loan and Gold Peso, after the moratorium on new PLOs came into effect on November 2, 2021.
“To date, the commission has not lifted the moratorium imposed above. Thus, only PLOs previously approved by the Commission can operate,” the SEC said, citing the CGFD order.
The agency said Cashtrees also violated SEC MC 19, which requires loan and finance companies to report their PLOs to the commission before they launch and operate.
Loan companies are also required to disclose in their advertisements and PLO-specific information, such as their corporate names, SEC registration numbers, and certificates of authority.
In addition, SEC MC 19 further requires companies to register their PLOs as trade or business names and report any PLOs they plan to develop, operate, or use no later than 10 days before their launch.
“To date, however, [Cashtrees] has not submitted any such report and, despite this failure, has nevertheless commenced the operations of said PLOs,” the SEC said.
The agency added that its CGFD also discovered deficiencies in Cashtrees’ compliance with SEC MC 19 with respect to its three registered PLOs, namely Happylend, Credit Cash and Cashmore.
CGFD found that Happylend failed to show information required under SEC MC 19 and that the three PLOs were not registered as business or trade names of the company, among other violations, according to the SEC .
“Due to multiple violations of SEC MC 19 and SEC MC 10 committed by [Cashtrees] in the launch of the eight unregistered PLOs and due to additional violations of SEC MC 19 committed by [Cashtrees] in its non-compliance with its three registered PLOs, [Cashtrees] showed its complete disregard for the rules and regulations of the Commission,” the SEC said, citing the revocation order.
“As 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,” he added.
GMA News Online is trying to find Cashtrees contact details to get their comments on the matter.
The revocation of Cashtrees’ CA brings the total number of finance/loan companies whose licenses have been revoked due to various violations of SEC rules and regulations to 37, the corporate regulator said.
To date, the SEC has also revoked the primary registration of a total of 2,082 loan companies for their failure to obtain the required secondary license – a certificate of authorization to operate as a loan/finance company – pursuant to Republic Act No. 9474, or the Credit Union Regulation Act of 2007 and for other violations.
The business regulator added that it had ordered 72 online loan applications to cease operations for failing to be licensed to operate as a loan or finance company last year.—AOL, GMA News