This article discusses the Philippine regulatory and practical verification framework for lending companies. It is not legal advice.

1) What “SEC verification” means in lending-company practice

In the Philippines, the Securities and Exchange Commission (SEC) is the primary regulator of lending companies. “Verification” commonly arises in two settings:

Regulatory verification by the SEC (before and during operations): The SEC checks that an applicant is properly organized, sufficiently capitalized, qualified, and compliant before issuing authority to operate—and later monitors ongoing compliance.
Public/transactional verification (by borrowers, counterparties, investors, landlords, payment partners, etc.): Stakeholders verify whether an entity is (a) a real SEC-registered corporation and (b) authorized to operate as a lending company—especially important for online lending.

A crucial point: SEC registration is not the same as SEC authority to lend. A corporation may exist on paper, yet still be unauthorized to engage in lending.

2) The legal and regulatory framework (Philippine context)

A. Primary law: Revised Penal Code? No—special corporate and lending laws

The key framework is:

Revised Corporation Code (RCC): governs incorporation, corporate existence, filings, and corporate compliance.
Lending Company Regulation Act of 2007 (R.A. 9474): governs what a lending company is, the need for SEC authority, supervision, and penalties for unlawful operations.
SEC rules and memorandum circulars: implement licensing standards, reporting, compliance, and (notably) additional requirements for online lending platforms.

B. Other laws that frequently intersect with lending verification

Even if a company is SEC-licensed, its products and operations may be constrained by:

Truth in Lending Act (R.A. 3765): disclosure rules for credit terms, finance charges, and effective costs.
Civil Code: loan contracts, obligations, assignments, surety/guaranty, damages.
Data Privacy Act (R.A. 10173): consent, lawful processing, proportionality, and restrictions on collection practices that misuse personal data.
Consumer and unfair practices principles (depending on the transaction structure and marketing).
Anti-money laundering rules (as applicable to the institution and transaction type under AMLC regulations).

Verification should therefore look beyond “may I lend?” and also ask: “Are my lending and collection methods lawful?”

3) Baseline requirement: A lending company must be (1) a corporation and (2) SEC-authorized

A. Corporate existence (primary registration)

A legitimate lending company starts with SEC registration as a corporation (not merely a trade name registration). The SEC issues corporate registration documents (e.g., certificate of incorporation/registration) and recognizes the corporation as a juridical entity.

B. Authority to operate (secondary license)

Under the lending regulatory framework, the corporation generally needs an SEC authority/permit/certificate to operate as a lending company—often treated as a secondary license. This is distinct from corporate registration.

Practical implication: A corporation that says “we are registered with the SEC” may still be operating illegally as a lender if it lacks the SEC authority to operate as a lending company.

4) The SEC’s internal verification process (when licensing a lending company)

While the SEC’s specific forms and sequencing vary over time, the verification logic is stable. The SEC typically evaluates:

Step 1: Corporate eligibility and purpose

The SEC checks that the applicant is properly organized and that its constitutional documents (Articles of Incorporation and related corporate actions):

allow engagement in lending as a business purpose,
identify the correct principal office,
list qualified directors/officers,
comply with nationality and ownership restrictions (if any apply to the specific business structure),
and are not attempting to mask a prohibited scheme.

Step 2: Capitalization and financial capacity

A core verification point is whether the applicant has at least the minimum capitalization required by law/regulation and can prove it (commonly through treasurer’s affidavits, bank certifications, and/or proof of subscription and paid-up capital consistent with SEC requirements).

The policy reason is straightforward: a lender should have adequate capital and net worth to operate responsibly and meet obligations.

Step 3: Fit-and-proper screening (integrity/qualification checks)

As part of risk control and enforcement against abusive and fraudulent lenders, the SEC may verify whether directors, officers, incorporators, and beneficial owners have:

disqualifying criminal history or adverse findings,
previous involvement in entities with revoked licenses or enforcement actions,
or indicators of nominee arrangements designed to evade regulation.

Step 4: Business model verification (especially for online lending)

For online and app-based lenders, the SEC’s verification often expands to include:

the platform’s public-facing disclosures (company identity, authority details, contact channels),
consumer-facing documentation (loan agreements, disclosure statements, privacy notices),
operational controls (complaints handling, collection policies),
and whether the platform structure matches what is being licensed (i.e., the actual operator is the licensed entity, not a hidden affiliate).

Step 5: Documentary completeness and corporate authority to apply

The SEC typically verifies that the application is supported by proper corporate actions, such as:

board resolutions authorizing the application and designating signatories,
updated corporate filings that show who the legitimate officers are,
and organizational documents consistent with the applicant’s representations.

Step 6: Issuance of authority, conditions, and continuing obligations

If satisfied, the SEC issues authority to operate and may impose conditions such as:

reporting requirements,
restrictions on advertising representations,
compliance with disclosure and fair-collection standards,
and ongoing submission of corporate and regulatory reports.

5) Ongoing SEC verification and monitoring after licensing

The SEC does not “verify once and forget.” Ongoing verification typically occurs through:

A. Periodic filings and compliance checks

Lending companies are generally expected to submit and maintain updated filings such as:

Annual audited financial statements (AFS) (as required by corporate compliance rules),
General Information Sheet (GIS) and related disclosures on directors/officers,
and other SEC-required regulatory reports specific to lending companies.

Failure to file can lead to delinquency consequences (including penalties, possible suspension/revocation processes depending on the severity and persistence).

B. Complaints-driven verification and investigations

A large share of SEC enforcement activity in lending arises from:

borrower complaints,
reports of abusive collection,
data privacy-related misconduct (including harvesting contacts or shaming tactics),
misleading advertising (“SEC-approved,” “guaranteed,” hidden charges),
and unlicensed operations using “front” corporations.

The SEC may verify authenticity of licenses, require explanations, issue show-cause orders, and impose sanctions where warranted.

C. Enforcement verification tools

Regulatory verification becomes enforcement when red flags are confirmed. Typical measures include:

orders to explain,
cease-and-desist or suspension directives,
revocation of authority to operate,
administrative penalties/fines,
and referrals for prosecution under applicable penal provisions.

6) Public verification: how to verify a lending company is legitimate and authorized (practical checklist)

When verifying a lender, treat it as a two-layer check: corporate existence and authority to lend.

Layer 1: Verify corporate existence (SEC registration)

Ask for, and examine, the following:

Exact corporate name (including “Inc.” / “Corporation” and spelling). Many scams use look-alike names.
SEC corporate registration details The company should be able to produce its SEC corporate registration documentation. Cross-check that:
- the name matches exactly,
- the principal office address is plausible and consistent,
- the corporation is not presenting a sole proprietorship registration as if it were corporate authority.
Who you’re dealing with If a representative signs documents, ask for proof of authority:

secretary’s certificate or board resolution authorizing signatories, or
special power of attorney (if applicable).

Layer 2: Verify authority to operate as a lending company (SEC secondary license)

Request a copy of the lender’s SEC-issued authority/certificate to operate as a lending company and confirm:

it identifies the same corporation name,
it is not expired/voided (where relevant under the issuing terms),
and it was not issued to a different entity in a corporate group.

For online/app lenders: Expect that the platform clearly identifies the licensed corporation and displays regulatory identifiers consistently across:

website/app,
loan contract,
disclosure statements,
and privacy policy.

Layer 3: Verify “good standing” and compliance signals

Because an entity can be authorized yet noncompliant, add these checks:

Proof of current filings (e.g., updated GIS and recent AFS submission evidence). Persistent non-filing is a governance red flag.
Consistency of addresses and contact channels A licensed lender should have traceable and stable contact information.
Contract and disclosure quality A legitimate lender should provide clear, written disclosures of:
- principal, interest, fees, penalties,
- effective cost of credit, and
- payment schedule and consequences of default (consistent with truth-in-lending principles).

Layer 4: Red flags that often indicate unlicensed or abusive operations

Be cautious if you see:

“SEC registered” claims without showing authority to operate as a lending company.
refusal to provide corporate documents, or providing documents with mismatched names.
a platform that hides the operating entity behind a “brand” with no legal name.
collection tactics involving:
- threats, shaming, contacting employers/co-workers without legal basis,
- mass messaging to phone contacts,
- publishing personal data—high data privacy risk.
“investment” language (guaranteed returns, passive income) used by a supposed lender—may indicate a different regulated activity or a potential fraud scheme.

7) Online lending platforms: verification issues unique to apps and digital lenders

Online lending increases the need for verification because the borrower may never see a physical office or meet authorized officers.

Key verification points:

A. Identify the legal entity behind the app/website

The app brand may differ from the corporation’s legal name. The verification task is to determine:

the exact SEC-registered corporation operating the lending business, and
whether that entity has SEC authority to operate as a lending company.

B. Confirm that the operator is the licensed entity—not merely a service vendor

Some models involve third-party tech providers. The regulated activity remains with the entity actually granting the loans and collecting. If the operator is not the licensed entity, that is a major compliance problem.

C. Data privacy and collection conduct are part of “real-world legitimacy”

In practice, abusive online lending has often involved unlawful data access and coercive collection. Verification should include:

whether permissions requested by the app are proportionate to lending,
whether the privacy notice explains data use clearly,
whether collection rules prohibit harassment and unauthorized disclosure.

Even a licensed lender can face regulatory action if it violates these rules.

8) What happens if a company lends without SEC authority (legal consequences)

Operating a lending business without SEC authority generally exposes the operator to:

regulatory enforcement (shutdown orders, revocation actions against related entities, administrative penalties),
penal exposure under the lending regulatory law’s penal provisions (depending on the violation),
and civil litigation risk (including challenges to charges, allegations of abusive practices, and consumer/data privacy claims).

A common misconception is that “unlicensed = loan automatically void.” Philippine outcomes are typically more nuanced:

the operator may be penalized and stopped,
and certain charges or practices may be struck down (e.g., unconscionable interest, unlawful penalties, abusive collection), but the enforceability of the underlying obligation depends on the facts and applicable doctrines.

9) Verification from the lender’s perspective: how to avoid licensing and compliance failures

For corporations applying for or maintaining authority, the SEC’s verification logic implies a compliance roadmap:

Align corporate purpose and governance with the intended lending activity.
Maintain required capital and financial reporting discipline.
Implement documented consumer disclosures consistent with truth-in-lending principles.
Adopt fair collection policies (no harassment, no unlawful disclosure, no coercive shaming).
Build data privacy compliance into the product (data minimization, lawful basis, clear notices).
Ensure the online platform is transparently tied to the licensed entity in all public and contractual materials.
Keep SEC filings current (AFS, GIS, and any industry-specific reports).

Regulators increasingly treat operational behavior (especially in digital lending) as inseparable from licensing legitimacy.

10) Bottom line

The SEC verification process for lending companies is best understood as a layered framework:

Layer 1: Is the entity a real SEC-registered corporation with lawful corporate existence?
Layer 2: Does it have SEC authority to operate as a lending company (the key “license to lend” requirement)?
Layer 3: Is it compliant in practice—financially, operationally, and in consumer-facing conduct—particularly in disclosures, data privacy, and collections?

A reliable verification approach confirms all three layers, because corporate registration alone is not proof of lawful lending operations, and authority alone does not guarantee compliant behavior.