The Securities and Exchange Commission (SEC) has imposed a moratorium on the registration of new online lending platforms, as some engage in abusive and predatory practices.
SEC said it stopped accepting applications from lending platforms as it crafts new guidelines to protect borrowers and plug loopholes.
Some online lending apps shame borrowers who cannot pay on time by texting and calling their friends and relatives.
The National Privacy Commission earlier charged executives of online lending apps for extracting sensitive information like phonebook contacts on borrowers’ smartphones.
“We have seen the emergence of financial technology companies that engage in predatory lending, taking advantage of those struggling financially during the pandemic. The Commission will work toward stamping out these abusive financing and lending companies that do nothing but bury borrowers in even more debt,” said SEC chairperson Emilio Aquino.
Online lending platforms that have been recorded by the SEC prior to the moratorium may continue to operate, but will be subject to existing strict monitoring and audit to ensure compliance.
To date, the SEC has cancelled licenses of 35 lending companies due to various regulations, while some 2,081 firms had their licenses revoked for failing to get the necessary documents.
Check the list of licensed lending and financing companies here. – Rappler.com