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Friday, March 29, 2024

SEC orders three lending firms to stop loan offers

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The Securities and Exchange Commission ordered three lending firms—Peso Tree, Pesoalo and Pinoy Cash Loan—to stop offering loans to the public through online platforms without the necessary licenses.

The SEC in an order issued on January 21 directed the owners, operators, promoters, representatives, and agents of the three companies to immediately cease and desist, under pain of contempt, from engaging in, promoting and facilitating unauthorized lending activities.

The SEC also ordered Peso Tree, Pesoalo and Pinoy Cash Loan to stop from offering and advertising their lending business through the internet and delete or remove promotional presentations, including the lending applications they operate.

“Considering that the online lending operators are not incorporated entities and have no Certificate of Authority to Operate as Lending Companies or Financing Companies, the lending activities and transaction are illegal and have to be stopped immediately by this Commission,” the order read.

“Finally, the Commission cannot turn a blind eye on the fact that the online lending operator’s violation in the instant case was aggravated by the fact that they conducted their business in an unscrupulous manner with evident bad faith, by charging their borrowers unconscionable interest rates, subjecting them to inhumane treatment using abusive and degrading language, and similar other harassment strategies in order to collect debts. This has to stop immediately,” it added.

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Section 4 of Republic Act No. 9474, or the Lending Company Regulation Act of 2007, states that a lending company can be established only as a corporation. It further provides that “no lending company shall conduct business unless granted an authority to operate by the SEC.”

Any person who engages in the business of lending without a validly subsisting authority to operate from the SEC may face a fine ranging from P10,000 to P50,000, or imprisonment of six months to 10 years or both, under Section 12 of the Lending Company Regulation Act. 

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