May 27, 2024

The Securities and Exchange Commission has revoked the license of Cashtrees Lending Corporation for launching and operating unregistered online lending platforms (OLP) amid the moratorium it imposed.
In an order dated March 16, the SEC Corporate Governance and Finance Department (CGFD) found that Cashtrees committed eight violations of SEC memorandum circular 10, s. 2021, which provides for the moratorium of new OLP.
Cashtrees also committed eight violations of SEC MC 19, s. 2019 which provides the disclosure requirements on advertisements of financing and lending companies and reporting of online lending platforms.
The findings were supported by the results of the joint operation of the SEC Enforcement and Investor Protection Department (EIPD) and the Philippine National Police Anti-Cybercrime Group on Feb. 12 for the implementation of a warrant to search, seize, and examine computer data against Cashtrees.
In its report following the operation, the EIPD found Cashtrees to have launched and operated eight unrecorded OLPs, namely Rush Loan, Easy Money, Good Pocket, Lucky Start, Swipe Cash, 365 Cash, Mega Loan, and Gold Peso, after the moratorium on new OLPs took effect on Nov. 2, 2021.
The SEC imposed the moratorium in response to the emergence of financial technology companies engaging in predatory lending, taking advantage of cash-strapped Filipinos in need of quick loans by charging high interest rates and imposing strict payment terms.
“To date, the SEC has not lifted the moratorium. Only OLPs previously approved by the SEC may operate,” the CGFD said in the order.
In launching and operating the eight OLPs, the CGFD said, Cashtrees also violated MC 19, which requires lending and financing companies to report their OLPs to the SEC prior to their launch and operation. Lending companies must also disclose in their advertisements and OLPs specific information, such as their corporate names, SEC Registration Numbers, and Certificates of Authority.
SEC MC 19 further requires companies to register their OLPs as business or trade names, and to report any OLP which they plan to develop, operate, or use no later than 10 days before their launch.
“To date, Cashtrees has not submitted any such report and, despite such failure, commenced operations of the said OLPs nonetheless,” the CGFD said.
The CGFD also discovered lapses in Cashtrees’ compliance with SEC MC 19 with regards to its three OLPs, namely Happylend, Credit Cash, and Cashmore.
The CGFD found that Happylend did not show the required disclosures under SEC MC 19, and the three OLPs were not recorded as business or trade names of the company, among other violations.
“Due to the multiple violations of SEC MC 19 and SEC MC 10 committed by Cashtrees in launching the eight unrecorded OLPs and due to the additional violations of SEC MC 19 committed by Cashtrees in its failure to comply with regard to its three recorded OLPs, Cashtrees showed wanton disregard of the Commission’s rules and regulations,” the revocation order read.
“As the online lending industry is strictly regulated, companies who are either unwilling or unable to comply with the rules imposed cannot be allowed to continue to operate,” it added.
The revocation of Cashtrees’ CA brings to 37 the total number of financing/lending companies with cancelled licenses due to various violations of SEC rules and regulations. – Press release