SEC gives lenders grace period for registration

THE SECURITIES and Exchange Commission (SEC) is giving lenders a grace period to complete their registration amid ongoing efforts to combat usury across the country.

The corporate regulator, in a media briefing in Pasay City on Thursday, announced a crackdown on illegal lending following the stance of President Rodrigo R. Duterte against such operations.

The SEC is initially looking into the compliance of companies, which registered to primarily engage in the business of lending but failed to secure a secondary license to extend loans to the public.

“We still have about 3,512 with the primary purpose of lending but failed to get a secondary license,” SEC Chairperson Teresita J. Herbosa said.

Republic Act No. 9474 otherwise known as the Lending Company Regulation Act of 2007 requires individuals or groups engaging in the business of lending to register their incorporation with the SEC and secure a secondary license.

When the measure was passed, the SEC initially required companies with the primary purpose of lending to obtain a certificate of authority. Some 900 have complied and more than 3,000 have received show-cause orders.

“So that’s also a violation but we think that because they’re already registered as corporations, they’re halfway through with the requirements,” Ms. Herbosa said. “We’re inclined on giving them a grace period to comply, so it’s not unfair that these people who have at least done some steps toward regularization will be the ones punished first.”

“I think we’ll... give them a period of six months to one year to comply with the requirements... [so] they could have the secondary license or certificate of authority.”

For lenders without primary registration, the SEC is investigating these firms for possible filing of criminal complaints, she said.