The Securities and Exchange Commission (SEC) has suspended the operations of 104 lending companies in the first four months of 2017, after they were found to be operating without a Certificate of Authority.
“The Commission will revoke the primary license of the suspended lending companies once they fail to secure from the SEC an order lifting their suspension before May 22, 2017,” said SEC Commissioner Emilio Aquino on Friday, May 19.
Republic Act No. 9474 or the Lending Company Regulation Act makes it illegal for firms to act as lending companies or investors unless registered with the Commission as lending companies.
In November 2016, the SEC issued an advisory to encourage “five-six” lenders to register.
It warned informal lenders facing complaints that they may be violating RA 9474 and/or those engaging in “fraudulent, oppressive and illegal practices in lending to borrowers including those violating the Truth in Lending Act” and as such would be investigated for possible prosecution.
Aquino also reported to Finance Secretary Carlos Dominguez III that it was expanding its investigation against lending companies which have not been operating in accordance with other SEC regulations.
At the same time, however, Aquino also noted an almost 500 percent spike in the number of lending companies that have been registered with the SEC in the first four months of 2017.