THE Securities and Exchange Commission (SEC) is planning to lift a moratorium on the registration of new online lending platforms (OLPs) while introducing stricter rules aimed at protecting borrowers and promoting responsible lending.
In a draft memorandum circular issued for public comment on March 12, the regulator outlined proposed guidelines that would allow financing and lending companies to launch new OLPs under an enhanced regulatory framework.
The moratorium on new online lending platforms has been in place since November 2021 under Memorandum Circular 10, which was introduced to curb abusive practices in the digital lending sector.
Lifting the moratorium seeks to expand access to credit while ensuring that digital lending operations comply with consumer protection standards, prudential safeguards and market conduct rules.
The draft circular also introduces new minimum paid-up capital requirements for financing and lending companies depending on the number of platforms they operate.
Financing companies without OLPs will be required to maintain at least P20 million in paid-up capital while lending companies will need a minimum of P10 million.
Those with OLPs will need P30 million in capital for one platform, P60 million for two to five platforms and P100 million for up to 10 platforms.
Lending companies, meanwhile, will be required to maintain P20 million in capital for one OLP, P30 million for two to five platforms and P50 million for up to 10 platforms.
The SEC is also proposing to cap the number of OLPs operated by each financing or lending company at 10 in a bid to ensure better oversight and reduce potential systemic risks.
Existing companies will be given three years to comply with the new capital requirements through a capital compliance plan submitted to the commission.
The draft guidelines also adopt a “single certificate of authority” policy where each financing or lending company will be issued only one certificate covering its principal and branch offices, replacing the current system that requires separate approvals for each branch.
The SEC is also considering shifting to an asset-based annual licensing fee ranging from 0.10 percent to 0.35 percent of a company’s total assets.
The proposed rules also contain tighter consumer protection provisions, including a ban on accessing or scraping borrowers’ contact lists, social media contacts, or messaging records from mobile devices.
Online lenders will likewise be prohibited from using personal data to harass borrowers, pressure them publicly, or disclose their debts to third parties.
Automated or system-generated messages for debt collection will not be allowed, except for neutral payment reminders that do not contain threats or coercive language.
The SEC said financing and lending companies operating online platforms must register with the Credit Information Corp. and submit accurate credit data to support responsible lending decisions.
The public can submit comments on the proposed guidelines until March 25.
