MANILA - The government is taking severe measures against the proliferation of “informal money lenders” who usually charge exorbitant interest rates or victimize borrowers through fraud, falsification and harassment.
In a press briefing, Securities and Exchange Commission (SEC) chairperson Teresita Herbosa warned that a fine or imprisonment, or both, await persons who engage in lending without primary registration of incorporation and secondary license to extend loans to the public.
Under Section 12 of the Lending Company Regulation Act of 2007, or Republic Act 9474, those who fail, or refuse to incorporate and obtain a license from the SEC to engage in lending, face a fine of Php 10,000 to Php 50,000, or imprisonment of six months to 10 years, or both.
Herbosa said SEC record found that there were 3,000 lending companies which had not gone through the full registration, thus issued with show-cause letters with the warning that their primary registration with the SEC will be revoked if they fail to obtain a CA and may be held liable for fines and penalties.
She noted that President Rodrigo Duterte was concerned about the proliferation of the so-called “5-6” lending system by certain nationals and underscored the need to take drastic measures to address this problem.
To this end, the SEC has initiated investigation into the activities of suspected informal lenders for possible filing of criminal complaints.
Apart from charging them with violation of R.A. 9474, the SEC is likely to include the charge of violation of the Truth in Lending Act which also imposes fine and/or imprisonment. Foreign informal lenders will be referred to the Bureau of Immigration.
Herbosa said that among the leads being investigated by SEC are online advertisements of lending, the distribution of flyers, sending text messages and overt lending and collection activities in public places like markets.
The SEC is coordinating with the local government units and law enforcement agencies in the conduct of surveillance and entrapment operations.
SEC Extension Office nationwide will spearhead these investigations in their respective territorial jurisdiction.
The Commission is also studying how to help borrowers who have been victimized by informal lenders into making it appear that instead of a simple loan, they have purchased an appliance through credit.
Upon default, these borrowers are charged criminally for estafa, which is a circumvention of the prohibition against imprisonment for non-payment of debt.
The SEC is willing to give registered lending companies, but who have failed to secure a CA, a grace period of six months to one year from notice within which to apply for a CA and comply with all requirements of the SEC.*PNA
back to top