SEC cracks down on illegal online lenders

Not content with closing down thousands of abusive lenders and haling to court a number of illegal firms, the Securities and Exchange Commission (SEC) is further stepping up its crackdown against violators of the Lending Company Regulation Law, especially those operating online, the Department of Finance (DOF) said.

Citing a recent report of SEC chair and chief executive Emilio Aquino to Finance Secretary Carlos Dominguez III, the DOF said the corporate regulator already canceled the registrations of 2,081 companies and secured the conviction of 76 individuals involved in eight cases of abusive and illegal lending.

Aquino said the SEC also slapped cease-and-desist orders against 73 online lending apps. The DOF-attached agency likewise revoked the licenses of 36 erring financing firms.

“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 told Dominguez.

But the DOF said Dominguez still pushed Aquino to “intensify [the SEC’s] crackdown against illegal and abusive lending companies, as these are proliferating with several of them charging very high interest rates.”

In response, Aquino said “the SEC will also focus its campaign on abusive lending companies following complaints received from consumers about the collection practices of these firms that involve threatening or insulting borrowers.”

In particular, “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,” Aquino said.

For instance, Aquino said the SEC this year shuttered Cashtrees Lending Corp. in coordination with the anticybercrime group of the Philippine National Police .

“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 enforced by the SEC. We are expecting more operations against illegal lenders to come,” he 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 the Lending Company Regulation Act. Our next step is to sustain this crackdown on unregistered and abusive collection practices of online lending apps,” the SEC chief added. INQ