SEC stops lending operations of Sana Credit

​The Securities and Exchange Commission (SEC) has issued a cease and desist order (CDO) against Sana Credit for operating an unrecorded online lending platform (OLP).

In an order dated July 28, the SEC Financing and Lending Companies Department directed Sana Credit, 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, both online and offline, without registration and approval from the Commission.

Sana Credit’s operation of an unregistered OLP violates SEC Memorandum Circular (MC) No. 19, Series of 2019, which requires financing and lending companies to fully disclose and report the OLPs they operate. It also violates SEC MC No. 10, Series of 2021, which imposed a moratorium on new OLPs on November 5, 2021.

The Commission’s issuance of the CDO is also in line with Republic Act No. 11765, or the Financial Products and Services Consumer Protection Act, which empowers the SEC to conduct enforcement actions against financial service providers for noncompliance with the provisions of the law.

“By operating an unregistered and undisclosed online lending platform, [Sana Credit] effectively circumvents the Commission’s regulatory and supervisory authority. Consequently, the general public, particularly borrowers, are exposed to potential risks, including abusive and unfair debt collection practices, unjust interest rates, [and] violation of data privacy rights,” the order read.

“In light of [Sana Credit’s] continued unauthorized operation of its OLP, the Commission finds it necessary to issue this [CDO] in order to prevent further harm or prejudice to the public, and to safeguard the integrity of the regulatory framework governing lending companies,” it added.