THE Securities and Exchange Commission (SEC) has released for a second round of public comments the draft guidelines that seek to lift the moratorium on the registration of online lending platforms and raise the capital requirements of financing and lending companies in a bid to improve regulatory oversight over the sector and boost consumer protection policies.
The proposed guidelines is expected to provide stronger safeguards against abusive and unfair debt collection practices.
Under the draft rules, the SEC is set to impose a uniform minimum paid-up capital for a new company. Existing online lenders would be required an amount of paid-up capital based on the number of platforms they operate.
The proposed minimum paid-up capital for new financing and lending companies is P15 million and P5 million, respectively.
The SEC is also imposing a cap on the number of platform or company may own and operate to just up to five to ensure effective supervision, adequate governance and manageable consumer risk exposure.
The proposed minimum paid-up capital for financing companies with one platform is P20 million, P60 million for three platforms and P100 million for five platforms
Meanwhile, lending companies are proposed to have a P10 million minimum paid-up capital for one platform, P30 million for three and P50 million for five.
The proposed guidelines also adopt a Single Certificate of Authority policy, wherein each firm will only be issued one certificate covering its principal office, all branch offices and platforms.
Among others, the proposed guidelines prohibit lending firms from disbursing loan proceeds, whether automated or system-initiated, without a borrower’s explicit and informed confirmation of the final loan terms.
In payment collection, the firms should ensure that collection communications, whether made directly or through any third-party service provider, shall clearly and reasonably identify the registered name of the company, the specific platform or other information as deemed necessary by the SEC.
Under the proposed rule, lending and financing companies that violate MC 18 will be directed to pay P50,000 and P100,000 for the first offense, respectively. For the third and succeeding offenses, the SEC may impose a fine of up to P1 million, suspend the activities of the lending firm, or revoke their certificate of authority.
The public may submit comments and recommendations on the proposed guidelines on or before June 15.