Republic of the Philippines
Congress of the Philippines
Metro Manila
Thirteenth Congress
Third Special Session
Begun and
held in Metro Manila, on Monday, the nineteenth day of February, two thousand
seven.
REPUBLIC ACT NO. 9474 May 22, 2007
AN ACT GOVERNING THE ESTABLISHMENT, OPERATION AND
REGULATION OF LENDING COMPANIES
Be it
enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:
Section
1. Title. - This
Act shall be known as the ""Lending Company Regulation Act of
2007"".cralawredlawlibrary
Sec. 2. Declaration
of Policy. - It is
hereby declared the policy of the State to regulate the establishment of
lending companies and to place their operation on a sound, efficient and stable
condition to derive the optimum advantages from them as an additional source of
credit; to prevent and mitigate, as far as practicable, practices prejudicial
to public interest; and to lay down the minimum requirements and standards
under which they may be established and do business.cralawlibrary
Sec. 3. Definition
of Terms. - For
purposes of implementing this Act, the following definitions shall apply:
(a) Lending Company shall refer to a corporation
engaged in granting loans from its own capital funds or from funds sourced from
not more than nineteen (19) persons. It shall not be deemed to include banking
institutions, investment houses, savings and loan associations, financing
companies,
pawnshops, insurance companies, cooperatives and other credit institutions
already regulated by law. The term shall be synonymous with lending investors.
(b) Debtor shall refer to a borrower or person
granted a loan by the lending company.
(c) Quasi-Bank shall refer
to a non-bank financial institution authorized by the BSP to engage in quasi-banking
functions and to borrow funds from more than nineteen (19) lenders through the
issuance, endorsement or assignment with recourse or acceptance of deposit
substitutes as defined in Section 95 of Republic Act No. 7653 (the ":New
Central Bank Act":) for purposes of relending or purchasing of receivables
and other obligations.
(d) Subsidiary shall refer to a corporation more
than fifty percent (50%) of the voting stock of which is owned by a bank or
quasi-bank.
(e) Affiliate shall refer to a corporation, the
voting stock of which, to the extent of fifty percent (50%) or less, is owned
by a bank or quasi-bank which is related or linked to such institution through
common stockholders or such other factors as may be determined by the Monetary
Board of the BSP.
(f) SEC shall refer to the Securities and Exchange
Commission.
(g) BSP shall refer to the Bangko Sentral ng
Pilipinas.
Sec. 4. Form
of Organization. - A
lending company shall be established only as a corporation: Provided
That existing lending investors organized as single proprietorships or
partnerships shall be disallowed from engaging in the business of granting
loans to the public one year after the date of effectivity of this Act.
No
lending company shall conduct business unless granted an authority to operate
by the SEC.
Sec. 5. Capital. - The minimum paid in capital of
any lending company which may be established after the effectivity of this Act
shall be One million pesos (P1,000,000.00): Provided, however,
That lending companies established and in operation prior thereto shall comply
with the minimum capitalization required under the provisions of this Section
within such time as may be prescribed by the SEC which time shall, in no case,
be less than three years from the date of effectivity of this Act and: Provided,
further, That the SEC may prescribe a higher minimum capitalization if
warranted by circumstances.
Sec. 6. Citizenship
Requirements. - Upon
the effectivity of this Act, at least a majority of the voting capital stock
shall be owned by citizens of the Philippines.
The
percentage of foreign-owned voting stock in any lending company existing prior
to the effectivity of this Act, if such percentage is in excess of forty-nine
percent (49%) of the voting stock, shall not be increased but may be reduced
and, once reduced, shall not be increased thereafter beyond forty-nine percent
(49%) of the voting stock of the lending company. The percentage of
foreign-owned voting stocks in any lending company shall be determined by the
citizenship of the individual stockholders. In the case of corporations owning
shares in a lending company, the citizenship of the individual owners of voting
stock in such corporations shall be the basis in the computation of the
percentage.
No
foreign national may be allowed to own stock unless the country of which he is
a national accords reciprocal rights to Filipinos.
Sec. 7. Amount
and Charges on Loans. - A lending company may grant loans in such amounts and reasonable
interest rates and charges as may be agreed upon between the lending company
and the debtor: Provided, That the agreement shall be in compliance with
the provisions of Republic Act No. 3765, otherwise known as the "Truth in
Lending Act" and Republic Act 7394, otherwise known as the "Consumer
Act of the Philippines": Provided, further, That the
Monetary Board, in consultation with the SEC and the industry, may prescribe
such interest rate as may be warranted by prevailing economic and social
conditions.
Sec. 8. Maintenance
of Books of Accounts and Records. - Every lending company shall maintain books of
accounts and records as may be required by the SEC and prescribed by the Bureau
of Internal Revenue and other government agencies. In case a lending company
engages in other businesses, it shall maintain separate books of accounts for
these businesses.
The
Manual of Accounts prescribed by the BSP for lending investors shall continue
to be adopted by lending companies for uniform recording and reporting of their
operations, until a new Manual of Accounts shall have been prescribed by the
SEC.
It shall
issue the appropriate instruments and documents to the parties concerned to
evidence its lending and borrowing transactions.
Sec. 9. Authority
of the SEC. - The
SEC is hereby authorized to:
(a) Create a new division or bureau within its
control to regulate and supervise the operations and activities of lending
companies in the country;
(b) Issue rules and regulations to implement the
provisions contained herein;
(c) Issue rules and regulations on, among other
things, minimum capitalization, uses of funds received, method of marketing and
distribution, maturity of funds received, restrictions or outright prohibition
of purchases or sales of receivables with or without recourse basis;
(d) Require from lending companies reports of
condition and such other reports necessary to determine compliance with the
provisions of this Act;
(e) Exercise visitorial powers whenever deemed
necessary; and
(f) Impose such administrative sanctions including
suspension or revocation of the lending company's authority to operate and the
imposition of fines for violations of this Act and regulations issued by the
SEC in pursuance thereto.
Sec. 10. Implementing
Rules and Regulations. – Within three months after the approval of this Act, the SEC shall
promulgate the necessary rules and regulations implementing the provisions of
this Act.
Sec. 11. Delineation
of Authority between SEC and the BSP. - Lending companies shall be under the supervision
and regulation of the SEC: Provided, however, That lending
companies which are subsidiaries and affiliates of banks and quasi-banks shall
be subject to BSP supervision and examination in accordance with Republic Act
No. 7653: Provider further, That the Monetary Board, after being satisfied that
there is reasonable ground to believe that a lending company is being used as a
conduit by a bank, quasi-bank or their subsidiary/affiliate to circumvent or
violate BSP rules and regulations, may order an examination of the lending
company's books and accounts.
Sec. 12. Penalty. - A fine of not less than Ten
Thousand Pesos (P10,000.00) and not more than Fifty thousand pesos(P50,000.00)
or imprisonment of not less than six months but not more than ten (10) years or
both, at the discretion of the court, shall be imposed upon:
1. Any person who shall engage in the business of a
lending company without a validly subsisting authority to operate from the SEC.
2. The president, treasurer and other officers of
the corporation, including the managing officer thereof, who shall knowingly
and willingly:
a. Engage in the business of a lending company
without a validly subsisting authority to operate from the SEC;
b. Hold themselves out to be a lending company,
either through advertisement in whatever form, whether in its stationery,
commercial paper, or other document, or through other representations without
authority;
c. Make use of a trade or firm name containing the
words "lending company" or "lending investor" or any other designation
that would give the public the impression that it is engaged in the business of
a lending company as defined in this Act without authority; and
d. Violate the provisions of this Act.
3. Any officer, employee, or agent of a lending
company who shall:
a. Knowingly and willingly make any statement in
any application, report, or document required to be filed under this Act, which
statement is false or misleading with respect to any material fact; and
b. Overvalue or aid in overvaluing any security for
the purpose of influencing in any way the action of the company in any loan, or
discounting line.
4. Any officer, employee or examiner of the SEC
directly charged with the implementation of this Act or of other government
agencies who shall commit, connive, aid, or assist in the commission of acts
enumerated under Subsections 1 and 2 of this Section.
Sec. 13. Matters
not Covered by this Act. – The provisions of Republic Act No. 3765,
otherwise known as the "Truth in Lending Act", Republic Act No. 7394
or the "Consumer Act of the Philippines" and other existing laws,
insofar as they are not in conflict with any provision of this Act, shall apply
in matters not otherwise specifically provided in this Act.
Sec. 14. Repealing
Clause. - All
laws, executive orders, letters of instruction, rules and regulations, or
provisions thereof which are inconsistent with the provisions of this Act are
hereby repealed, amended or modified accordingly.
Sec. 15. Separability
Clause. - If any
portion hereof shall be held invalid or unconstitutional, such invalidity or
unconstitutionality shall not affect the other provisions which shall remain in
full force and effect.
Sec. 16. Effectivity. - This Act shall take effect
fifteen (15) days after its publication in at least two national newspapers of
general circulation.
Approved:
|
MANNY VILLAR |
JOSE DE VENECIA JR. |
This Act
which is a consolidation of Senate Bill No. 1949 and House Bill No. 6073 was
finally passed by the Senate and the House of Representatives on December 19,
2006 and February 20, 2007, respectively.
|
OSCAR G G. YABES |
ROBERTO P. NAZARENO |
Approved:
May 22, 2007
GLORIA MACAPAGAL-ARROYO
President of the Philippines
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