The Securities and Exchange Commission revoked the registration of 836 lending companies as a part of the crackdown against “5-6” or moneylenders charging extremely high-interest rates on loans.
Data from the SEC’s corporate governance department showed that 836 lending firms had failed to obtain a certificate of authority to operate as a lending company under Republic Act 9474, or the Lending Company Regulation Act of 2007 despite the sufficient time allotted to them to comply.
Section 4 of RA 9474 states that a lending company should be established only as a corporation and that no lending company should conduct business unless granted a CA to operate by the SEC.
Section 5 of the said law also provides that the minimum paid-in capital of any lending company should be P1 million. The SEC required lending companies applying for a CA to submit a notarized bank certificate as a proof of deposit of their paid-in capital.
Among the lending companies whose certificate of registration were revoked by the SEC were 101 Lending Investor Inc., Agape Lending Corp., Country Lending Center Inc., Decade Lending Investors Inc., Golden Arches Lending Investor Inc., Happy Town Lending Corp., Kia Lending Corp., LLP Lending Inc., Ore Lending Corp., Panther Lending Corp., South Manila Lending Investors Inc., VM Lending Investor Inc. and Yellow Gold Sunshine Lending Corp.
The SEC in 2017 intensified its crackdown against usurious lenders with the filing of criminal charges against 153 individuals, 67 of whom were Indian nationals, citing falsification of documents, perjury and other violations of local lending regulations.
President Rodrigo Duterte, whose administration is pursuing inclusive growth and financial inclusion, earlier also made a call to rid the country of illegal and unregistered lenders who were allegedly bleeding the Filipino people to death.
The SEC in May also issued draft rules to penalize lending companies and financing firms who were resorting to unfair debt collection practices to collect unpaid loans.