SEC makes permanent CDOs vs 3 online lenders
The Securities and Exchange Commission (SEC) has ordered the permanent closure of three online lending operators found to be operating without the required licenses.
In separate resolutions dated July 26, the Commission en banc denied for lack of merit the respective motions filed by Skymart, Withu and Spendcash for the lifting of the cease and desist order against them issued in February.
The Commission En Banc issued the order after finding that the three entities had
engaged in lending and financing activities without securing the necessary licenses
from the SEC, and/or have violated relevant regulations. The regulations include the requirement for registered lending and financing companies to disclose and report their online
lending platforms to the SEC, and the prohibition on abusive debt collection practices.
Republic Act No. 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.
“The 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 they engage in or carry out lending business without the required license,” according to the CDO.
The SEC further found that the online lending operators have been imposing
onerous and unreasonable terms, and charging high interest rates.
