The Securities and Exchange Commission (SEC) continued its crackdown against illegal lending after ordering eight online lending operators to stop conducting lending activities without the necessary license.
In an order issued February 8, the agency directed CashWill, PesoBee, Peso T-Safe Online Cash, RushLoan, SkyMart, SpendCash, Tapa, and WithU, to immediately cease and desist from operating lending businesses until they have incorporated and secured from the SEC authorization to pursue such activities.
The companies were further enjoined to cease from offering and advertising their lending business and related business through the Internet or any other media.
The SEC issued the order after finding that none of the groups were registered as a corporation with the agency. Accordingly, they also lack the certificate of authority to operate as a lending or financing company (CA).
Republic Act 9474, or the Lending Company Regulation Act of 2007 (LCRA), requires persons or entities operating as lending companies to register as corporations and to secure from the SEC the necessary authority to operate.
“(T)he Commission finds that the continued operation of the online lending operators constitutes a clear violation of, and should be penalized pursuant to the (LCRA) because it engages in or carries out a lending business without the required license form the Commission,” the commission said.
“The acts of the unregistered online lending operators in illegally offering and providing loans to the public, charging high interest rates, and subjecting its debtors to unfair treatment through abusive and even libelous language in collecting the loaned amount,” it said.
Further, the SEC found that the online lending operators have been imposing onerous and unreasonable terms, charging high interest rates, and performing acts that violate the right to privacy of their borrowers.
To date, the commission has canceled the licenses of 36 financing and lending companies due to various violations of applicable rules and regulations. It has also revoked the certificate of registration of a total of 2,081 lending companies for their failure to secure the requisite certificate of authority, pursuant to the LCRA.
In total, 73 online lending applications have been ordered to cease operations for lack of authority to operate as a lending or financing company.