Magazine of Normative & Developmental Law

PERSONS OR ENTITIES cannot engage in the business of lending company without a Certificate of Authority to Operate as such from the Securities and Exchange Commission (SEC).  In a Notice dated August 4, 2009, the SEC (Corporation and Finance Department) reminded the public that the one (1) year period granted under Republic Act No. 9474 (The Lending Company Regulation Act of 2007) for lending companies to secure a Certificate of Authority to Operate had already lapsed on June 12, 2008.

Further, according to the Notice, the public is advised NOT to transact any business with any lending company that has no Certificate of Authority to Operate from the SEC.

A lending company refers to any corporation engaged in granting loans from its own capital funds or from funds sourced from not more than nineteen (19) persons. It shall not be deemed to include banking institutions, investment houses, savings and loan associations, financing companies, pawnshops, insurance companies, cooperatives and other credit institutions already regulated by law. The term shall be synonymous with lending investors. [Sec. 3(a), RA 9474]

Any person who shall engage in the business of a lending company without the SEC Certificate of Authority to Operate shall be penalized with a fine of not less than Ten Thousand Pesos (P10,000.00) and not more than Fifty thousand pesos(P50,000.00) or imprisonment of not less than six months but not more than ten (10) years or both, at the discretion of the court.##

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