The Securities and Exchange Commission (SEC) has ordered eight online lending operators to stop conducting lending activities without the necessary license as it continues its crackdown against illegal lenders.
In an order, the Commission En Banc directed CashWill, PesoBee, Peso T-Safe Online Cash, RushLoan, SkyMart, SpendCash, Tapa, and WithU, to immediately cease and desist from conducting any lending or financing related activities until they have incorporated and secured SEC authorization to pursue such activities.
The companies, their agents, representatives and promoters, as well as the owners and operators of their hosting sites, were further enjoined to cease from offering or advertising their lending business and related business through the internet or any other media, and to remove all materials involving such.
The SEC issued the order after finding that none of the groups were registered as a corporation with the Commission. Accordingly, they also lack the Certificate of Authority to Operate as a Lending/Financing Company (CA).
The Lending Company Regulation Act of 2007 (LCRA), requires persons or entities operating as lending companies to register as corporations and to secure from the SEC the necessary authority to operate.
“The Commission finds that the continued operation of the Online Lending Operators constitutes a clear violation of, and should be penalized pursuant to the (LCRA) because it engages in or carries out a lending business without the required license form the Commission,” the Commission En Banc held.
It added that, “The acts of the unregistered online lending operators in illegally offering and providing loans to the public, charging high interest rates, and subjecting its debtors to unfair treatment through abusive and even libelous language in collecting the loaned amount.”
Further, the Commission found that the online lending operators have been imposing onerous and unreasonable terms, charging high interest rates, and performing acts that violate the right to privacy of their borrowers.
The SEC regularly monitors lending and financing companies for their compliance with applicable laws, rules and regulations, as it seeks to protect borrowers from abusive, unethical, and illegal lenders.
To date, the Commission has canceled the licenses of 36 financing or lending companies due to various violations of applicable rules and regulations.
It has also revoked the certificate of registration of a total of 2,081 lending companies for their failure to secure the requisite certificate of authority, pursuant to the LCRA.
In total, 73 online lending applications have been ordered to cease operations for lack of authority to operate as a lending or financing company.