The Securities and Exchange Commission (SEC) has issued a cease and desist order (CDO) against Sana Credit, directing it to stop all lending activities conducted through its unrecorded online lending platform (OLP).

In an order dated July 28, the SEC instructed the company, its owners, and operators to immediately cease facilitating any lending without the required registration and approval from the Commission.

Sana Credit’s operation of an unregistered OLP violates two key regulations. The first is SEC Memorandum Circular (MC) No. 19, which mandates that lending companies must disclose all OLPs they operate.

The second is MC No. 10, which imposed a moratorium on the registration of new OLPs effective November 5, 2021. The Financial Products and Services Consumer Protection Act also supports the SEC’s action.

The SEC order stated that by running an unregistered platform, Sana Credit “effectively circumvents the Commission’s regulatory and supervisory authority”.

This, the order noted, exposes borrowers to potential risks such as “abusive and unfair debt collection practices, unjust interest rates, [and] violation of data privacy rights”.

The Commission found it necessary to issue the CDO to protect the public from further harm and to maintain the integrity of the country’s lending regulations.

The order was issued “in order to prevent further harm or prejudice to the public, and to safeguard the integrity of the regulatory framework governing lending companies”.

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