MANILA— The Securities and Exchange Commission on Friday issued a moratorium on the registration of new online lending platforms (OLPs) ahead of the release of new rules governing the sector to clamp down on predatory practices.
The moratorium took effect Friday, the SEC said in a statement.
With the rise of online lending platforms, fintech firms engaged in predatory lending have also increased during the COVID-19 pandemic, SEC Chairperson Emilio Aquino said.
“We are currently crafting new guidelines that will allow lending and financing companies to better address the needs of borrowers and, at the same time, plug loopholes that give rise to abusive and predatory practices,” Aquino said.
“The Commission will work toward stamping out these abusive financing and lending companies that do nothing but bury borrowers in even more debt," he added.
Lending firms that have registered prior to the moratorium will be allowed to operate but will be under strict monitoring, the agency said.
To date, the SEC said it has cancelled licenses of 35 financing or lending companies due to violations of existing rules and regulations.
It has also revoked the certificates of registration of 2,081 lending companies due to the failure to secure the requisite certificate of authority, it added.
Several borrowers have complained of harassment after some lending firms allegedly took control of their phone messages, cameras as well as use their phone directory to collect payments through their contacts.