The Securities and Exchange Commission (SEC) has taken decisive regulatory action against two online lending companies for violating key consumer protection and registration requirements, underscoring the agency’s heightened scrutiny of the fast-growing digital lending sector.
The SEC’s Financing and Lending Companies Division (FinLenD) issued a cease and desist order against Hupan Lending Technology Inc., directing the company to immediately halt operations of its unregistered online lending platform (OLP), Magic Peso, along with four other platforms Cashme, Sukiloan, Pesopoly, and Loan Tayo.
The SEC said Hupan Lending’s operation of Magic Peso is in direct violation of the ongoing moratorium on new OLPs, implemented to safeguard the public from unregulated digital lenders. The regulator emphasized the CDO was necessary to “prevent fraud, injury, or harm to the public and financial consumers” using the company’s digital platforms.
The regulator’s enforcement action signals tighter oversight over unlicensed fintech operations amid rising consumer complaints and data privacy concerns in the sector.
In a separate order, FinLenD revoked the lending license and corporate registration of Hi-Fin Lending Inc., operator of the online platforms Peso Wallet and Credit Cash, citing non-compliance with mandatory disclosure requirements.
The SEC found that Hi-Fin Lending failed to declare WeWill Tech Corp. as a third-party service provider, in violation of a FinLenD directive issued 8 June 2023. That order requires all financing and lending firms to disclose third-party service providers as part of compliance with Republic Act No. 11765, also known as the Financial Products and Services Consumer Protection Act.
The SEC’s twin enforcement actions reflect a broader policy push to curb illegal lending operations and ensure that digital financial services adhere to the law’s transparency and consumer protection standards.
“These actions are a clear message that we will not tolerate non-compliance, especially when it risks harming the public,” an SEC official said, stressing that the Commission will continue to monitor and act against unauthorized financial entities operating in the digital space.
