CEBU CITY – The Bangko Sentral ng Pilipinas (BSP) said on Friday, Sept. 20, that it is working closely with the Securities and Exchange Commission (SEC) in crafting a regulatory policy against unscrupulous online lenders who are offering loans to the public.
Elmore Capule, senior assistant governor and general counsel of BSP, said the Monetary Board has received complaints against online lending companies offering loans and shaming their debtors who fail to meet their obligations.
“We need to have a memorandum of agreement as to where our jurisdiction starts and up to what is their (SEC) jurisdiction,” Capule said on the sidelines of the regional information campaign on the amendments of the BSP charter at the Marco Polo Hotel here.
Under the Lending Company Regulations Act, investors or entities that offer money for lending as a business need to incorporate and register with the SEC, he pointed out. “If they don’t incorporate or register as a lending company, they are criminally and administratively liable,” he stressed.
Capule said the BSP has jurisdiction over lending firms because of their power to supervise activities like “credit granting,” which is essentially lending. “We are looking at credit-granting entities which may have an impact on the entire economy,” he explained.
Capule also said the National Privacy Commission (NPC) needs to be part of the agencies who will regulate the lending firms as the privacy rights of the debtors are often violated.
The BSP official, however, clarified that only the court can declare illegal the “excessive and unconscionable” interest rates from loans from online lending companies because the Usury Law has already been repealed in the country. — John Rey Saavedra (PNA)