Finance Secretary Carlos Dominguez III ordered the Securities and Exchange Commission, an attached agency of the Department of Finance, to intensify the crackdown against illegal and abusive lending companies that charge very high interest rates.
The SEC is the national government regulatory agency charged with supervision over the corporate sector, capital market participants, securities and investment instruments market and the investing public.
SEC chairman and chief executive Emilio Aquino said in a report to Dominguez the agency 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 as part of a crackdown against illegal and abusive lenders.
The corporate regulator also issued cease-and-desist orders against 73 online lending apps and cancelled the licenses of 36 financing or lending companies for various violations of the Lending Company Regulation Act and other applicable rules and regulations.
“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 in his report.
Dominguez asked Aquino to stopped the proliferation of illegal and abusive lending companies/
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.
He said the SEC 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.
The SEC began its crackdown against illegal lenders with its successful operation against Cashtrees Lending Corp. Aquino said the SEC conducted the crackdown in coordination with the Philippine National Police Anti-Cybercrime Group.
He said the SEC and PNP were able to secure a warrant to search, seize and examine Cashtrees’ computer data in its offices in Pasay City.
The digital forensic examination done on Cashtrees revealed that a majority of the
online lending apps handled by the company such as Goodpocket, Easymoney, 365 Cash and Rushloan were unregistered with the SEC.
“Forty-six employees, including the manager of Cashtrees Lending, were arrested for violating the Cybercrime Prevention Act and the Lending Company Regulation Act or the LCRA enforced by the SEC. We are expecting more operations [against illegal lenders] to come,” Aquino said.
“To date, we revoked over 2,000 certificates of registration of lending companies that failed to secure their requisite Certificate of Authority, pursuant to LCRA. Our next step is to sustain this crackdown on unregistered and abusive collection practices of OLAs [online lending apps],” he said.