The Securities and Exchange Commission (SEC) has required financing and lending companies to register with Credit Information Corp. (CIC) and submit regulatory requirements after several entities have notably been using unfair debt-collecting practices.
In a notice issued by the regulator, it ordered financing and lending companies that operate online lending platforms and applications to submit the requirements under Republic Act (RA) No. 8556 or the Financing Company Act of 1998 and RA 9474 or the Lending Company Regulation Act of 2007.
“There is a need to improve differentiation among borrowers, and ensure that the creditworthiness of borrowers is the primary consideration for the pricing of the loan products offered,” the SEC said.
CIC is mandated to receive and consolidate basic credit data and act as a central registry for credit information. It provides access to credit history information and the financial condition of a borrower.
The SEC said that to date, about 146 lending and financing firms have registered and have reported their online lending platforms or applications.
The SEC order comes after several entities have been noted to use abusive or threatening debt-collecting practices to their debtors.
A joint operation between the SEC Task Force on Online Lending Application and the Philippine National Police Anti-Cybercrime Group executed on May 16 resulted in the arrest of eight individuals identified as operators, managers, employees, and agents of an entity in Pasig City.
Under the financing company law, entities engaged in abusive debt collection practices may now be criminally prosecuted for violating Section 8(d) of RA 8556. Financial service providers as well as their collection agents and representatives are prohibited from using abusive collection or debt recovery practices against their consumers.
Additionally, violators of the law will be penalized with a maximum fine of PHP 2 million or up to five years of imprisonment, or both. — Adrian H. Halili
This article originally appeared on bworldonline.com