SEC issues cease and desist order against Hinance Lending

​The Securities and Exchange Commission (SEC) has issued a cease and desist order (CDO) against Hinance Lending Investors Corp., doing business under the names HotCash, VI Peso, and KindCash, for its operation of an unregistered online lending platform (OLP).

In an order promulgated July 15, the SEC Financing and Lending Companies Department (FinLenD) directed Hinance Lending, including its owners, operators, promoters, representatives, agents, and all persons claiming and acting for and on its behalf, to immediately cease and desist from facilitating any lending activity or transaction.

The issuance of the CDO follows FinLenD’s finding that Hinance failed to disclose in its business plan that it owns and operates the OLP, Magic Peso.

This constitutes a violation of SEC Memorandum Circular No. 19, Series of 2019, which requires full disclosure and reporting requirements for financing and lending companies using OLPs. It also violates SEC Memorandum Circular No. 10, Series of 2021, which imposed a moratorium on new OLPs on November 5, 2021.

The issuance of the CDO is also in accordance with Republic Act No. 11765, otherwise known as the Financial Products and Services Consumer Protection Act, which authorizes the Commission to impose enforcement actions against financial service providers for noncompliance with the provisions of the law.

“On account of [Hinance Lending]’s continuing operation of Magic Peso, the Commission holds that the issuance of a CDO is warranted…not only to penalize the [company], but also to prevent fraud, injury, or harm to the public and financial consumers who are at the [company’s] mercy,” the order read.