SEC probes financing, lending companies for alleged non-compliance of 30-day grace period for loans
CEBU CITY, Philippines—Some financing companies (FCs) and lending companies (LCs) are now facing investigation from the Securities and Exchange Commission (SEC) for allegedly refusing to comply with the mandatory grace period on loan payments that fall due during the enhanced community quarantine period (ECQ).
In an advisory posted on its Facebook page, the Securities and Exchange Commission (SEC) revealed that it has been receiving reports and complaints against FCs and LCs that reportedly failed to comply with Section 4(aa) of the Republic Act No. 11469, otherwise known as the Bayanihan to Heal As One Act, and its Implementing Rules and Regulations (IRR).
The commission stressed that it would take every report and complaint seriously.
“Accordingly, a number of FCs and LCs are already being investigated for possible violation of the law, which provides, among others, a 30-day grace period for all loans with principal and/or interest falling due within the Enhanced Community Quarantine period,” the commission disclosed.
It further stressed that FCs and LCs are mandated to strictly comply with Section 4(aa) of the Bayanihan to Heal As One Act, its IRR and all the other laws, rules and regulations being implemented by the Commission.
Based on the IRR of the said section, all covered institutions are required to automatically extend a 30-day mandatory grace period for all loans with principal and/or interest falling due within the ECQ period.
The covered institutions refers to lenders, including but not limited to banks, quasi-banks, non-stock savings and loan associations, credit card issuers, pawnshops and other credit-granting financial institutions under the supervision of the Bangko Sentral ng Pilipinas, Securities and Exchange Commission and the Cooperative Development Authority, public or private, including Government Service Insurance System, Social Security System and the Pag-ibig fund.
The Section 4(aa) IRR also stated that all covered institutions should not charge or apply interest to future payments/amortizations of individuals, households, micro, small and medium enterprises (MSMEs) and corporate borrowers during the 30 day grace period.
Also, the borrower can pay the accrued interest on the loan during the 30-day grace period in a staggered basis over the remaining life of the loan, based on the IRR.
SEC then warned FCs and LCs that any violation or non-compliance shall be dealt with to the full extent of the law. The penalties for those who violate R.A.11469 include imprisonment of two months or a fine of P10,000 to P1 million or both./dbs
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