SEC orders 3 online lending firms to stop operations

The Securities and Exchange Commission (SEC) on Thursday said it has ordered three online lending operators to stop operations, due to not having necessary authorization from the regulator.

In a statement, the SEC said that in an order issued April 26, it ordered Golden Cash, Help Cash, and Grace Cash “to immediately cease and desist from engaging in, carrying out, promoting and facilitating any lending activity/transaction until they have secured the necessary registration and license from the commission.”

“The owners, operators, promoters, representatives, and agents of the online lending operators were likewise directed to stop from engaging in unfair debt collection practices, as defined under SEC Memorandum Circular No. 18, Series of 2019 (MC 18),” the corporate regulator said.

The SEC added it also ordered the three online lending operators to stop offering and advertising their lending business through the internet or any other media, and to delete materials involving such.

The regulatory body said it issued the order after finding that Golden Cash, Help Cash, and Grace Cash are not registered as corporations with the SEC.

“As such, they cannot secure a Certificate of Authority to Operate as a Lending/Financing Company,” it said.

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.

“[T]he Commission finds that the continued operations of Golden Cash, Help Cash, and Grace Cash constitute a clear violation of, and should be penalized pursuant to the [LCRA] because it engages in or carries out a lending business without the required license from the Commission,” the SEC said.

Moreover, the regulatory body said that findings by its Enforcement and Investor Protection Department revealed that the three online lending operators have been employing unfair collection practices, prohibited under MC 18.

The EIPD noted that the online lending operators have been harassing, threatening, publicly humiliating their respective borrowers, and imposing hidden charges and excessive processing fees, the SEC said.

“The acts of these unregistered online lending operators in illegally offering and providing loans to the public, charging high interest rates, and subjecting its debtors to unfair treatment through abusive and even libelous language in collecting the loaned amount…have no place in a society that is governed by and faithfully adheres to positive laws,” it said.

GMA News Online is trying to reach the three online lending firms in question for comment. — BM, GMA News