SEC revokes Cashtrees license after violations

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The Securities and Exchange Commission (SEC) revoked the license of Cashtrees Lending Corp. for launching and operating unregistered online lending platforms under a commission-imposed moratorium.

In an order dated March 16, the SEC found that Cashtrees Lending had committed eight violations regarding the moratorium on new online lending platforms.

The loan company also committed eight other violations of disclosure requirements for finance company and loan company advertisements and reporting by online lending platforms.

“The findings were supported by the results of the joint operation by the SEC’s Enforcement and Investor Protection Department (EIPD) and the Philippine National Police’s Cybercrime Unit on February 12 to the execution of a search, seizure and examination warrant for computer data against Cashtrees Lending,” the SEC said in a press release.

In its report following the transaction, Cashtrees Lending was acknowledged to have launched and operated eight unregistered Online Lending Platforms (OLPs) after the moratorium came into effect on November 2, namely: Rush Loan, Easy Money, Good Pocket, Lucky Start, Swipe Cash, 365 Cash, Mega Loan and Gold Peso.

The SEC said it imposed the moratorium in response to “the emergence of fintech companies engaging in predatory lending, taking advantage of cash-strapped Filipinos who need quick loans by charging high interest rates and by imposing strict payment terms”.

Cashtrees Lending also failed to comply with the requirement that loan and finance companies report their PLOs to the commission before they were launched and operated.

Loan companies must also disclose in their advertisements and PLO-specific information, such as their corporate names, SEC registration numbers, and certificates of authority.

“Because of the multiple violations committed by [Cashtrees Lending] in the launch of the eight unregistered PLOs and due to the additional violations… [Cashtrees Lending] has shown complete disregard for the rules and regulations of the commission,” reads the dismissal order.

“As the online lending industry is tightly regulated, businesses that are unwilling or unable to comply with the imposed rules cannot be allowed to continue operating,” he added.

The revocation of Cashtrees Lendings brings to 37 the total number of finance and lending companies whose licenses have been revoked due to various violations.

To date, the SEC has also revoked the primary registration of a total of 2,082 loan companies for their failure to obtain the required secondary licenses.

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