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Author Topic: RA 9474-An act governing the establishment, operation & regulation of Lending Co  (Read 9051 times)

TheAUDITor

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RA 9474 – An Act Governing the Establishment, Operation and Regulation of Lending Companies; for Entrepreneurs interested in establishing a lending companies; it is now a requirement to be a corporation, no more single proprietorship or partnership.



TheAUDITor
« Last Edit: November 10, 2009, 05:27:05 PM by TheAUDITor »
"Wise men say, only fools rush In" "Old Soldiers Never Die, They Just Get Better with Cal. 45""Stock Traders Never Give-up, They Just Lose Money""Let us learn caution from misfortune of others" JN8.12 "Whoever follows me will never walk in darkness, but will have the light of life"

trader202

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Nice trend here sir Auditor.

Tanong ko lang po, any idea for building a Credit Cooperative instead of Lending? Kasi masyadong mataas ang cash requirement ng Lending.

As mentioned (from other trend)... nag-ala bombay kami ngayon ng misis ko, para lng dati sa mga office-mate & production workers dito sa company namin. But, kala-onan.. dumami na sila ng dumami where I need more additional capital na, kasi nakakahiyang matanggihan mga "loyal client" mo eh.. I'm planning to set a cooperative instead in the future, but not know yet the proper way.

PLEASE ADVICE.. (advance thnks.)
Angat Pinoy!....

I'm not an expert but mY PSE bloG entries might help..
http://online-stocktrading.yolasite.com/home.php
http://online-stocktrading.yolasite.com/
Good luck kabayan.

TheAUDITor

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Nice trend here sir Auditor.

Tanong ko lang po, any idea for building a Credit Cooperative instead of Lending? Kasi masyadong mataas ang cash requirement ng Lending.

As mentioned (from other trend)... nag-ala bombay kami ngayon ng misis ko, para lng dati sa mga office-mate & production workers dito sa company namin. But, kala-onan.. dumami na sila ng dumami where I need more additional capital na, kasi nakakahiyang matanggihan mga "loyal client" mo eh.. I'm planning to set a cooperative instead in the future, but not know yet the proper way.

PLEASE ADVICE.. (advance thnks.)


Sir Trader 202:

Please read below the law some provision on Lending which provides the following:

1.  Lending shall be a corporation only; single proprietorship or partnersship not allowed;
2.  Paid-in capital shall be not lower than P1,000,000.00;
3.  Funds source shall be not more than 19 persons;
4.  A validity subsisting authority to operate from the SEC;
5.  All laws and regulation relative to lending companies were superseded by this RA 9474;
6.  Also, please refer to penalty clause of this law for those operating without proper authority from SEC (Securities & Exchange Commission).

Trader 202, the RA 9474 law was very clear, a lending company should be a corporation only. You may establish a lending company as long as it is a corporation; and funds source not more than 19 persons; with Paid-in capital of P1 Million. This lending corporation is exclusively regulated by the SEC.



TheAUDITor



Republic of the Philippines
Congress of the Philippines
Metro Manila
Thirteenth Congress
Third Special Session

[REPUBLIC ACT NO. 9474]

AN ACT GOVERNING THE ESTABLISHMENT, OPERATION AND REGULATION OF LENDING COMPANIES

Be it enacted by the Senate and House of Representatives of the Philippines in the Congress assembled:


Begun and held in Metro Manila, on Monday, the nineteenth day of February, two thousand seven.

Section 1. Title. – This Act shall be known as the “Lending Company Regulation Act of 2007”.

Section 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.
Section 3. Definitions of Terms – For purposes of implementing this Act, the following 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 that 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 institutions 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.
Section 4. Form of Organization. – A lending company shall be established only as a corporation: Provided, That existing lending investors organized as single proprietorships or partnership shall be disallowed from engaging in the business of granting loans to the public one year after the date of effectivity of this Act.

Section 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.

 
"Wise men say, only fools rush In" "Old Soldiers Never Die, They Just Get Better with Cal. 45""Stock Traders Never Give-up, They Just Lose Money""Let us learn caution from misfortune of others" JN8.12 "Whoever follows me will never walk in darkness, but will have the light of life"

TheAUDITor

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Continuation of RA 9474

Section 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 of voting stock in such corporations shall be the basis in the comp*tation 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.

Section 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.

Section 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 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 Account prescribed  by the BSP for lending investors shall continue to be adopted by lending companies for uniform recording and reporting their operations, until new Manual Accounts shall have been prescribed by the SEC.

Section 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 of this Act.
Section 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.

Section 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 7653: Provided, 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.

Section 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 validity subsisting authority to operate from the SEC.

2.   The president, treasurer and other offices of this 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 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.
Section 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.

Section 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.

Section 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.

Section 16. Effectivity. – This Act shall take effect fifteen (15) days after its publication in at least two national newspapers of general circulation.
"Wise men say, only fools rush In" "Old Soldiers Never Die, They Just Get Better with Cal. 45""Stock Traders Never Give-up, They Just Lose Money""Let us learn caution from misfortune of others" JN8.12 "Whoever follows me will never walk in darkness, but will have the light of life"

trader202

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Means, kahit pala cooperative ang group n'yo.. still need to comply at 1M capital? (ouch..) Balik bombay na lang ulit kami nito pala, but I already gather some member willing to share with me their fund.. Yun nga lang, commando pa rin kami.

Thanks po ulit... Sir Auditor.
 :D
Angat Pinoy!....

I'm not an expert but mY PSE bloG entries might help..
http://online-stocktrading.yolasite.com/home.php
http://online-stocktrading.yolasite.com/
Good luck kabayan.

TheAUDITor

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Sir Trader 202:

That's right, kahit cooperative ang group it needs to be a corporation and start Paid-in capital of P1 Million. All other forms of lending is hereby discouraged by this new Law, because of the severe penalty clause.

So, I suggest you start organizing a corporation for this lending activity. 



TheAUDITor
"Wise men say, only fools rush In" "Old Soldiers Never Die, They Just Get Better with Cal. 45""Stock Traders Never Give-up, They Just Lose Money""Let us learn caution from misfortune of others" JN8.12 "Whoever follows me will never walk in darkness, but will have the light of life"

trader202

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All other forms of lending is hereby discouraged by this new Law, because of the severe penalty clause.

So, I suggest you start organizing a corporation for this lending activity. 


Discourage indeed... an-lupit pa ng penalty, I felt.. it's very unfair, maraming mga kababayan natn dito na mga small scale business owners, specially sa palengke.. they need only 10~15K to start, pamuhunan sa umaga to purchase whole sale of fresh fish/meat/vegetables, then in the next day.. balik naman nila ang inutang with small interest.. and again & again in rotary cycle.. kumita sila, kumita din ako.

This kind of vendors, are not qualified sa Bank, dahil wala silang K! (docs/ collateral/ fixed income/ etc.).. Kami-kami lang nag-e-encourage sa kanila na mag-business! .. At pag sa other Lending establishment mangungutang, they charged them at-least30% interest.. kaya sa amin sila lumalapit. And no wonder why, malaki din ang mga patubo ng mga established lending corp. dahil na rin sa malupit na dinaanang requirements.

I just want to help my neighbors, marami sila ditong mga na lay-off since last month/s ago noong nag-ka-global recession tayo.. instead na umasang mag-a-apply kung saan-saan, I encourage them to set business for the meantime... pag-titinda sa palengke and to other crowded areas sa vicinity namin. Like fishballs/ barbeques/ kikiam/ siomai/ banana-que/ tinapa/ halo-halo etc... this business doesn't need much capital and luxury space, sa tapat lang bahay o sa tabi ng daan.. p'wede nah! Kailangan lang ng tiyaga at sipag.... Pag sa may mga experienced na, dapat sa palengke ka na pu-pwesto.

Angat Pinoy!....

I'm not an expert but mY PSE bloG entries might help..
http://online-stocktrading.yolasite.com/home.php
http://online-stocktrading.yolasite.com/
Good luck kabayan.

TheAUDITor

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Sir Trader 202,

Previously, I have this micro lending activity with started capital of P50K, but I stopped dahil sa new law na'to. Again, I am planning to set-up a corporation local town of Pangasinan but it needs a big Paid-in capital of P1 Million. This law is in favor of those big fish entrepreneurs, pero sa mga maliliit, suntok sa buwan.

Ang nakikita kung solution dito, is to invite a lot of investors, not more than 19 persons to set-up a corporation; and contribute funds.



TheAUDITor
 
"Wise men say, only fools rush In" "Old Soldiers Never Die, They Just Get Better with Cal. 45""Stock Traders Never Give-up, They Just Lose Money""Let us learn caution from misfortune of others" JN8.12 "Whoever follows me will never walk in darkness, but will have the light of life"

trader202

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Sir Auditor,

I thank you a lot for your wisdom, it enlightens me in many way. Your posting are all good reference to others also whom interested on this business venture.

More power sir.
Angat Pinoy!....

I'm not an expert but mY PSE bloG entries might help..
http://online-stocktrading.yolasite.com/home.php
http://online-stocktrading.yolasite.com/
Good luck kabayan.

tops 5450

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Sir Auditor,

I thank you a lot for your wisdom, it enlightens me in many way. Your posting are all good reference to others also whom interested on this business venture.

More power sir.

If ever you feel like to pursue or expand your business operation sir, feel free to count me in as one of your investor. Let us get started. What do you think?
Mag-ingat sa SCAMMER na ito: Michele Angelie Najarro Labay aka Angelita, endyel at iba pang aliases

trader202

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Sir Auditor,

I thank you a lot for your wisdom, it enlightens me in many way. Your posting are all good reference to others also whom interested on this business venture.

More power sir.

If ever you feel like to pursue or expand your business operation sir, feel free to count me in as one of your investor. Let us get started. What do you think?

Sir Tops5450, it's very nice to hear you back. I'm quite busy lately for my stock tradings/monitoring & other volunteer works for Typhoon Victims dito sa vicinity namin, kaya 'di ko na na-update multiply account ko last month.

I'm sending you a PM for further details. Thanks for being interested to do business again with me.
« Last Edit: November 14, 2009, 09:40:51 AM by trader202 »
Angat Pinoy!....

I'm not an expert but mY PSE bloG entries might help..
http://online-stocktrading.yolasite.com/home.php
http://online-stocktrading.yolasite.com/
Good luck kabayan.

TheAUDITor

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"Wise men say, only fools rush In" "Old Soldiers Never Die, They Just Get Better with Cal. 45""Stock Traders Never Give-up, They Just Lose Money""Let us learn caution from misfortune of others" JN8.12 "Whoever follows me will never walk in darkness, but will have the light of life"

alan soriano

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just asking .ano ba interest rate na mina mandate ng truth in lending act? can you give me  a range like how much interest for 30 days for say 10k?


trader202

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just asking .ano ba interest rate na mina mandate ng truth in lending act? can you give me  a range like how much interest for 30 days for say 10k?

Yup..good question.
'Di ko rin alam 'yan, or it all just depend on your area?
Angat Pinoy!....

I'm not an expert but mY PSE bloG entries might help..
http://online-stocktrading.yolasite.com/home.php
http://online-stocktrading.yolasite.com/
Good luck kabayan.

TheAUDITor

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just asking .ano ba interest rate na mina mandate ng truth in lending act? can you give me  a range like how much interest for 30 days for say 10k?

Interest rate mandate by Truth lending Act? I think it is none (NIL). The meaning of truth lending act is an act of disclusore, this law is an act requiring the disclosure of finance charges in connection with the extention of credit.

Act No. 9474 provides interest rate that maybe charged:
Section 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.

The law is silent in fixing the interest rate that maybe charged, but as long as there is a mutual agreement between the two parites; lending companies and the debtor; any interest rate is valid.



TheAUDITor
"Wise men say, only fools rush In" "Old Soldiers Never Die, They Just Get Better with Cal. 45""Stock Traders Never Give-up, They Just Lose Money""Let us learn caution from misfortune of others" JN8.12 "Whoever follows me will never walk in darkness, but will have the light of life"