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Lenders warned: Implement grace period or face penalties

The Securities and Exchange Commission – Davao Extension Office (SEC-DEO) has reminded lending and financing companies to follow the order on deferring the collection of payments and charging of penalties during the extended community quarantine (ECQ) or else they will be penalized.

Lawyer Katrina Ponco-Estares, SEC-DEO acting head, bared that they have received 40 inquiries and complaints in the last 20 days and 20% out of those were about financing or lending companies and their loans.

One of those is about a lending company which, although implementing the grace period, informed its borrowers they are required to pay the full amount of the loan after the lifting of the grace period.

According to the Section 3.01 of the IRR issued by the Department of Finance, “all covered institutions shall implement a 30-day grace period for all loans with principal and/or interest falling due within the ECQ Period without incurring interest on interest, penalties, fees and other charges.”

The initial grace period shall automatically be extended if the ECQ period is extended by the President in pursuant to his emergency powers under the Bayanihan to Heal as One Act.

The IRR covers 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 and Cooperative Development Authority, whether public or private, including the Government Service Insurance System, Social Security System and Pag-IBIG Fund.

“As the primary regulator of lending and financing companies, the extension office has urged these complainants to file formal complaints so that their cases can be investigated. By filing formal complaints, we assure the aggrieved parties that we will do everything in our power to protect borrowers from harassment and abusive lending practices,” Ponco-Estares said.

It was previously reported that under Republic Act no. 11469 or The Bayanihan to Heal as One Act, erring companies shall be penalized with two months imprisonment, a P10,000 to P1,000,000 fine, or both, upon discretion of the court.

The public may file a complaint to SEC by filling in the complaint form available in the SEC website, and attach evidence of their complaint and a valid ID.

Complaints may be sent via email to cgfd_md@sec.gov.ph with a subject title: FULL NAME_COMPANY COMPLAINED OF_SUBJECT OF COMPLAINT (ex:
JUAN DELA CRUZ_ABC LENDING_DISCLOSURE STATEMENT
VIOLATION).

People may also check the validity of the financing or lending company they transacted with on the SEC website http://www.sec.gov.ph/lending-companies-and-financing-companies/list-of-lending-companies/.

“We want to send a strong message to lending and financing companies to strictly adhere to the Implementing Rules and Regulations (IRR) of the Republic Act No. 11469, or the Bayanihan to Heal as One Act. Any violation or non-compliance shall be dealt with to the full extent of the law,” Ponco-Estares said.

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