Metro Manila (CNN Philippines, February 3) — The Securities and Exchange Commission wants penalties slapped on lending and financing firms along with their online lending platforms (OLPs) not observing the assigned ceilings on interest rates and other fees.
The penalties are part of the regulator’s proposed guidelines operationalizing the ceilings announced by the Bangko Sentral ng Pilipinas last December. These caps cover loans ₱10,000 and below which can be settled within four months.
Under the draft circular, non-compliant financing companies will be fined ₱50,000 on their first offense while lending firms will be fined ₱25,000.
For the second offense, financing firms must pay ₱100,000 while a ₱50,000 fine is imposed on lending companies.
Once a lending or financing firm commits a third offense, the SEC provides a set of possible penalties subject to the facts, circumstances, and gravity of the offense it can impose at its discretion:
– a fine not less than twice the penalty of the second offense but not exceeding ₱1 million;
– suspension of financing or lending activities for 60 days; or
– revocation of certificate of authority to operate as a financing or lending company.
“Depending on the gravity of the offense, the Commission may also proceed with the suspension or revocation of the company’s primary registration,” read the proposed guidelines.
The guidelines also require financing and lending firms to submit an impact evaluation report on or before Jan. 15 every year using a form prescribed by the SEC.
If they fail to submit, financing companies must pay ₱10,000 plus ₱200 daily penalty on their first offense, while lending firms will be fined ₱10,000 aside from a ₱100 daily penalty.
The SEC will suspend an erring firm’s certificate of authority on its second offense, and revoke it on its third offense.
“The foregoing penalties shall be imposed without prejudice to any other penalties that may be imposed by the Commission pursuant to Presidential Decree No. 902-A, Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines, and all other relevant laws, rules, and regulations being implemented by the Commission,” the draft circular stated.
The SEC said these include the disqualification of the concerned company’s directors and officers, along with penalties that courts or other government agencies could impose in line with their respective mandates.
The Commission will likewise require the submission of business plans or such other forms from financing and lending firms, but noted OLPs will be subject to a separate circular on the matter.
Comments may be emailed to the SEC until Feb. 11 at cgfd_md@sec.gov.ph.
