Senator Sherwin "Win" Gatchalian has urged the Securities and Exchange Commission (SEC) to expedite the creation of a new office to deal with regulation and monitoring of financing and lending firms.
Gatchalian on Friday also called for the crackdown on abusive and illegal lenders.
His call came ahead of the impending passage of the proposed Financial Products and Services Consumer Protection Act, which Gatchalian co-authored. The proposed statute aims to provide prompt action to victims' complaints of unfair debt collection.
"Even in the absence of a law that will give more teeth to the powers of financial regulators to enable them to perform acts necessary for the protection of financial consumers, preparatory works are already being put in place as in the case of the SEC," Gatchalian said, referring to the possible creation of the Financing and Lending Companies Division within the SEC.
Gatchalian attested to the number of complaints against various online companies and lending apps when his office received over 20,000 complaints in 2021 from those subjected to grave threats, intimidation, public-shaming and other unfair and abusive debt collection practices.
" come to my knowledge that there are victims of online lending companies who have been able to commit suicide with shame and severe mental stress caused by the threat to their lives because of their growing debt," he lamented.
According to him, these incidents "clearly necessitate legislative intervention".
The reelection senator said existing laws "would not suffice in bringing justice or at least provide immediate and efficient avenues for redress to consumers".
Aside from administrative sanctions, imprisonment of one year to five years or a fine of P50,000 up to P2 million or both will be slapped against any person who violates the provisions of the bill or any related rules, regulators, orders or instructions issued by the financial regulators.
The proposed penalties are more stringent than what is being imposed by the SEC under Memorandum Circular 18 series of 2019, which sets fine ranging from P25,000 to P1 million and suspension or revocation of the certificate of authority to operate.