SEC warns lending firms against not giving grace period to borrowers

Published April 24, 2020, 12:00 AM

by manilabulletin_admin

By Armando Fenequito Jr.

DAVAO CITY – The Securities and Exchange Commission – Davao Extension Office (SEC-Davao) has warned all lending and financing companies to be penalized if they will not provide grace period to borrowers during the extended Enhanced Community Quarantine (ECQ).

SEC-Davao Director lawyer Katrina Ponco-Estares said the warning issued after their office received calls from some borrowers, who were wary over not being able to pay the full amount of loans, amortizations, or interests after the grace period because of the ECQ.

“As the primary regulator of lending and financing companies, the extension office has urged these complainants to file formal complaints so that their cases can be investigated. By filing formal complaints, we assure the aggrieved parties that we will do everything in our power to protect borrowers from harassment and abusive lending practices,” she said.

“We want to send a strong message to lending and financing companies to strictly adhere to the Implementing Rules and Regulations (IRR) of the Republic Act No. 11469, or the Bayanihan to Heal as One Act. Any violation or non-compliance shall be dealt with to the full extent of the law,” Estares added.

She said under section 6 of the said law violators will be penalized up to two months imprisonment or a maximum fine of P1 million or even both and will also face penalties from other existing laws.

Estares said under section 3.01 of the IRR issued by the Department of Finance, all covered institutions shall implement a 30-day grace period for all loans with principal and interest falling due within the ECQ period without incurring interest on interest, penalties, fees and other charges.

She said the initial 30-day grace period shall automatically be extended if the President will further extend the ECQ pursuant to his emergency powers under the law.

Estares said the IRR also covers banks, quasi-banks, non-stock savings and loan associations, credit card issuers, pawnshops and other credit granting financial institutions under the supervision of the Bangko Sentral ng Pilipinas.

This law also included government and private cooperatives supervised by the Cooperative Development Authority as well as the Government Service Insurance System, Social Security System and Pag-IBIG Fund.

 
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