The Securities and Exchange Commission (SEC) has warned loan and finance companies to register and disclose their online lending platforms (OLP) to avoid revocation of licenses.
In a statement released Thursday, the commission said registration and disclosure requirements allow for closer monitoring of online activities and provide additional protection for borrowers against predatory lending.
Loan and finance companies were required to report their OLPS to commission in 2019, as well as register them as trade names under the SEC Memorandum Circular 19, Series of 2019.
Companies were further advised to include their corporate names, SEC registration numbers, and certificate of authority numbers on their advertisements and PLOs.
The memorandum also required disclosure to borrowers of interest rates and all other taxable charges prior to the completion of loan transactions, as required by Republic Act 3765 or the “Truth in Lending Act”.
Continued non-compliance with the protocol can result in a fine of up to P1 million, while non-compliance can also result in a 60-day suspension or revocation of their certificates of authority, according to the SEC.
The SEC said a total of 86 loan and finance companies had so far registered their PLOs, as of April 7.
Meanwhile, the commission penalized several companies for late filing reports under the memorandum, while letters of justification were issued against 33 companies for operating unregistered PLOs.
It has also revoked the master registration of 2,081 loan companies to date for failure to obtain the required certificate of authority under the Loan Company Regulation Act 2007.
Last year, he ordered four online loan applications to cease operations for lack of approval to operate as a loan or finance company.