The Securities and Exchange Commission (SEC) has suspended 104 erring lending companies in the first four months of 2017, and will revoke the primary licenses of those on this list that fail to have their suspension orders lifted by May 22.
In a report to Finance Secretary Carlos Dominguez III, SEC Commissioner Emilio Aquino said the corporate watchdog is also expanding in this year’s second quarter its investigations of lending companies suspected of either violating the law or nom-compliance with SEC requirements.
Aquino, who is the SEC Supervising Commissioner for enforcement, informed Dominguez that the corporate watchdog will deploy enforcement teams in the regions through its extension offices in the cities of Baguio, Tarlac, Legazpi, Cebu, Cagayan de Oro, Iloilo, Zamboanga and Davao.
He said in his report that “in addition to the 84 lending companies whose primary licenses were suspended on March 7, 2017 for failure to obtain Certificate of Authority (CA), the Commission suspended the primary licenses of 20 more lending companies on April 6, 2017 for the same reason.”
“The Commission will revoke the primary license of the suspended lending companies once they fail to secure from the SEC an order lifting their suspension before May 22, 2017,” Aquino said.
In his report to Dominguez, Aquino also noted the almost 500 percent spike in the number of lending companies that were registered in the first four months of 2017.
“There has been a significant increase of 477 percent in registration of lending companies for the first four months of 2017. A total of 248 new lending companies were registered in the first four months of this year compared to only 43 last year,” Aquino said.
Aquino also reported that the SEC assisted 143 aggrieved borrowers from all over Central Luzon in filing a criminal case against the officers and board directors of a lending company in Nueva Ecija; and an aggrieved borrower in filing a criminal case against an illegal foreign lender based in Makati City.
In the Makati case, the SEC also assisted the complainant in filing a petition for deportation against the foreigner-lender before the Bureau of Immigration, Aquino said.
Aquino said the SEC will coordinate with the National Bureau of Investigation to effectively carry out its operations against illegal lending operators and will begin building up cases against these errant firms and individuals in several Metro Manila cities this second quarter of the year.
The SEC began its crackdown against loan sharks and other illegal lenders in October last year.
Over 200 informal lenders have already applied for registration at the Commission after it initiated the crackdown.
Two advisories have been issued by the SEC to inform the public about prohibited lending practices under the law and encourage informal lenders to register with the Commission, according to SEC chairperson Teresita Herbosa.
The first advisory, issued in October last year, cited provisions of Republic Act No. 9474, or the Lending Company Regulation Act, which makes it illegal for firms to act as lending companies or investors unless registered with the Commission as lending companies.
Herbosa said the SEC issued another advisory in November to encourage “five-six” lenders to register.
The advisory warned informal lenders facing complaints for violations of RA 9474 and/or those engaging in “fraudulent, oppressive and illegal practices in lending to borrowers including those violating the Truth in Lending Act,” that they will be investigated for possible prosecution.
