The Securities and Exchange Commission declared a moratorium on the registration of new online lending platforms as it drafts new rules to stamp out abusive online practices.
It said in a statement the new rules would govern the licensing and registration of the OLPs of financing and lending companies.
“We are currently crafting new guidelines that will allow lending and financing companies to better address the needs of borrowers and, at the same time, plug loopholes that give rise to abusive and predatory practices,” SEC chairperson Emilio Aquino said.
“We have seen the emergence of financial technology companies that engage in predatory lending, taking advantage of those struggling financially during the pandemic. The Commission will work toward stamping out these abusive financing and lending companies that do nothing but bury borrowers in even more debt ,” Aquino said.
OLPs, which were registered with the SEC prior to the moratorium, may continue to operate and be used for online lending or financing.
