SEC Moves Toward Lifting Online Lending Moratorium With Tighter Rules
The Securities and Exchange Commission (SEC) is moving to lift its long‑standing moratorium on the registration of new online lending platforms (OLPs), while simultaneously introducing stricter safeguards aimed at curbing abusive practices and strengthening consumer protection in the digital lending sector.
In a notice issued for public comment on March 12, the SEC released a draft memorandum circular outlining the conditions under which the moratorium may be lifted, alongside new prudential, disclosure, and market‑conduct standards for financing and lending companies that operate online platforms.
The moratorium, which has been in place since Nov. 5, 2021, under SEC Memorandum Circular No. 10, Series of 2021, was imposed following a surge in complaints involving harassment, opaque loan terms, and abusive debt‑collection practices by certain digital lenders.
Balancing Innovation and Consumer Protection
According to the SEC, the proposed policy shift reflects a broader effort to reopen the digital lending market under a more disciplined regulatory framework.
“The proposed lifting of the moratorium recognizes the need to promote responsible innovation, stimulate economic activity among financing and lending companies, and ensure that the operation of online lending platforms is aligned with consumer protection, market integrity, prudential objectives, financial inclusion, ease of market access, and the global trend toward digitalization,” the SEC said.
However, regulators emphasized that lifting the moratorium will not amount to automatic approval of new platforms. All OLPs—whether existing or newly proposed—will remain subject to heightened supervision and compliance requirements under the draft rules.
Higher Capital Requirements Linked to Platform Scale
A central feature of the proposal is a tiered paid‑up capital framework, which ties minimum capital requirements to the number of online lending platforms operated by a company.
Under the draft rules:
• Financing companies without an OLP must maintain at least ₱20 million in paid‑up capital, while lending companies must hold ₱10 million.
• Financing firms operating one OLP will need ₱30 million, rising to ₱60 million for two to five platforms and ₱100 million for up to 10 platforms.
• Lending companies will be required to maintain ₱20 million for one OLP, ₱30 million for two to five platforms, and ₱50 million for the maximum of 10 platforms.
To prevent excessive fragmentation and ease supervision, the SEC is also proposing to cap the number of online lending platforms per company at 10.
Existing financing and lending companies will be given a three‑year transition period to meet the new capitalization thresholds through a capital compliance plan submitted to the Commission.
Structural Reforms in Licensing and Fees
The draft circular introduces a Single Certificate of Authority (CA) policy, under which each financing or lending company will receive one certificate covering its principal office and all branch locations. This replaces the current system that requires separate certificates for each branch. [business.i…quirer.net]
The SEC is also proposing to replace branch‑level annual fees with an asset‑based annual licensing fee, ranging from 0.10% to 0.35% of total assets, based on the company’s latest audited financial statements. The revised fee structure is expected to take effect beginning January 2027. [business.i…quirer.net]
Stronger Safeguards Against Abusive Practices
Consumer protection provisions figure prominently in the proposed rules. Online lenders would be explicitly barred from accessing or scraping borrowers’ contact lists, social media connections, or messaging records from mobile devices. The use of personal data to harass borrowers or disclose debts to third parties would also be prohibited. [newsbytes.ph], [fintechnews.ph]
In addition, the SEC intends to restrict debt‑collection communications. Automated or pre‑programmed messages may only be used for neutral payment reminders and must not contain threats, coercion, or shaming language.
The draft rules also require online lending operators to register with the Credit Information Corporation (CIC) and to use available credit data when evaluating borrowers prior to loan approval, reinforcing responsible underwriting standards.
Public Consultation Underway
The SEC said stakeholders and members of the public may submit comments and recommendations on the proposed guidelines until March 25, as part of the consultation process before the rules are finalized.
Once adopted, the new framework is expected to mark a significant shift in how online lending platforms are regulated in the Philippines, reopening the market while placing stronger guardrails around digital credit operations.
via Money News PH
