The Securities and Exchange Commission suspended the registration certificates of 84 lending companies as a part of a crackdown against the so-called ‘5-6’ money lenders that charge exorbitant interest rates on loans.
An advisory posted on its website showed the corporate regulator suspended the certificates of registration of 66 lending corporations and 18 lending partnerships.
The SEC also advised the public to inform the agency about persons and entities that were still engaged in illegal lending activities.
Among the suspended lending corporations were All State Loans Corp., Cambridge Credit Corp., First Binondo Credit Corp., Fortunate Star Lending Corp., Monarch Loans and Credit Corp., Le Maison Lending Inc., Planters Lending Corp., Sinag Araw Credit Corp., RSB Lending Invsetors Inc., Hedwig Lending Corp., Harrods Credit Corp. Uni -Loans Lending Co. and Goodway Lending Corp.
The SEC said in October it would go after money lenders that were not registered and had no license to operate from the corporate regulator.
It said it would penalize money lenders who were violating the law by failing or refusing to incorporate and obtain a license from the SEC to engage in lending activities.
The SEC said Republic Act No. 9474 or the Lending Company Regulation Act required lending companies with certificate of registration to also secure certificate of authorit.
It said while 900 lending companies had complied with the requirement, it issued show cause letters to about 3,000 lending firms with a warning that their primary registration would be cancelled if they failed to obtain CA.
The SEC also relaxed the documentary requirements for applications for CA to encourage lending companies to comply.
The regulator said going after informal lending companies was in line with the current administration’s tough stance against the proliferation of ‘5-6’ lending firms that were charging exorbitant interest rates on loans extended to borrowers.
The practice of ‘5-6’ simply means that the amount a person borrowed should be returned with 20-percent interest added.
Meanwhile, the SEC said it was also studying ways to help ‘5-6’ borrowers who were mostly Filipinos victimized by informal lenders.
The SEC said it was ready to impose fines and imprisonment against informal lenders while tbe foreign informal lenders would be referred to the Bureau of Immigration.
The SEC estimated that there were more P3 billion worth of loans from informal lenders circulating around the economy.