Dear Attorney,

I hope this letter finds you well. I am writing on behalf of a small group of concerned individuals who recently encountered a lending entity known as “Nobleza Lending Company.” We wish to determine whether this company is duly registered and compliant with all relevant Philippine laws. We have heard various claims about its legitimacy, but we would like professional guidance on the matter. Specifically, we would appreciate clarity on how we can verify a lending company’s license to operate, its adherence to relevant legal requirements, and what recourse is available should we discover any irregularities.

Thank you in advance for your assistance. We trust in your expertise as one of the best lawyers in the Philippines to provide meticulous guidance on how to ascertain the credibility and lawfulness of any lending institution.

Sincerely,

A Concerned Citizen

LEGAL ARTICLE: DUE DILIGENCE IN VERIFYING THE LEGITIMACY OF A LENDING COMPANY IN THE PHILIPPINES

In the Philippines, lending companies play a crucial role in providing access to credit for individuals and small businesses that require short-term or immediate financial assistance. However, not all entities purporting to engage in lending activities are necessarily operating within the bounds of the law or under the appropriate regulatory framework. It is therefore essential to understand the legal and practical steps in verifying whether a lending company, such as “Nobleza Lending Company,” is legitimate, duly registered, and compliant with existing statutes and regulations in the Philippines. This article provides an exhaustive overview of Philippine lending laws, pertinent regulatory authorities, verification procedures, common red flags, and legal remedies available to persons who may encounter unscrupulous lending entities.

I. LEGAL FRAMEWORK GOVERNING LENDING COMPANIES IN THE PHILIPPINES

Republic Act No. 9474 (Lending Company Regulation Act of 2007)
Republic Act No. 9474, also known as the Lending Company Regulation Act of 2007, establishes the legal requirements and guidelines for lending companies in the Philippines. This law defines a lending company as a corporation engaged in granting loans from its own capital funds or from funds sourced from not more than nineteen (19) persons.
Under RA 9474, every lending company is required to register with the Securities and Exchange Commission (SEC) and secure a Certificate of Authority to Operate (CA) before commencing business. Lending companies must also abide by additional requirements set forth by the SEC, including periodic reporting of their financial statements and compliance with caps on interest rates and other charges, as may be regulated by law and the SEC.
SEC Memorandum Circulars
The SEC issues various memorandum circulars outlining detailed rules and regulations for the registration, operation, and reporting obligations of lending companies. For instance, SEC Memorandum Circular No. 18, Series of 2019 (and subsequent updates) provides specific guidelines on interest rate ceilings, penalties for violations, and requirements for accurate disclosures of fees to borrowers.
Relevant Provisions of the Revised Corporation Code
Lending companies, being corporate entities, must likewise comply with the Revised Corporation Code of the Philippines (Republic Act No. 11232). They must submit Articles of Incorporation and By-Laws to the SEC, keep updated records, and ensure the legality of their corporate existence.
Bangko Sentral ng Pilipinas (BSP) Regulations
Although the primary regulator for lending companies is the SEC, the BSP may indirectly have a role in overseeing financing rates and certain aspects of credit, given the broader monetary policies and guidelines that ensure stability in the financial system. Strictly speaking, however, non-bank lending companies are primarily under the SEC’s purview rather than the BSP.
Data Privacy Act of 2012 (Republic Act No. 10173)
Legitimate lending companies must also comply with the Data Privacy Act, which mandates the responsible and secure handling of borrower information. Any unethical or unauthorized use of personal data may subject the company to penalties under the law.

II. KEY REQUIREMENTS FOR LEGITIMATE LENDING COMPANIES

Certificate of Incorporation
A legitimate lending company must be duly incorporated under Philippine laws, evidenced by a Certificate of Incorporation issued by the SEC. The Articles of Incorporation should include a lending business as one of its primary purposes.
Certificate of Authority (CA) from the SEC
Apart from the standard corporate registration, the lending entity must specifically obtain a Certificate of Authority to Operate as a lending company. This document signals that the SEC has authorized the corporation to engage in lending activities.
- Verification Tip: The SEC maintains a public list or database of registered lending companies, typically accessible via the SEC website or upon direct request at SEC offices. Anyone can inquire as to whether a lending entity is in good standing and holds a valid CA.
Ongoing Compliance (Reports and Audited Financial Statements)
An active lending company is required to regularly submit General Information Sheets (GIS), Audited Financial Statements (AFS), and other compliance documents to the SEC to demonstrate continued compliance with relevant financial reporting standards and laws.
Business Permits and Local Licenses
Legitimate lending companies also secure a Mayor’s permit or business permit from the local government unit (LGU) where they operate. This ensures that they are authorized to conduct business in a specific jurisdiction.
No Adverse SEC Rulings
It is wise to check if there have been any cease-and-desist orders, revocations of license, or sanctions issued against the lending company. SEC advisories and orders are often made available to the public, warning potential borrowers and investors of entities that have failed to comply with regulations or have engaged in fraudulent activities.

III. HOW TO VERIFY IF A LENDING COMPANY IS LEGITIMATE

Check the SEC Database
The most direct method to verify a lending company’s legitimacy is by searching the SEC’s list of registered lending companies. If “Nobleza Lending Company” (or any other name) appears in the SEC’s official registry, note the status of its Certificate of Authority and any associated conditions.
- Practical Procedure: Visit the SEC’s official website or approach the SEC’s Lending Company Registration and Regulation Department (LCRRD). Submit the entity’s name and request official confirmation of its registration and compliance status.
Review Its Corporate Documents
Legitimate entities typically provide a copy of their Certificate of Incorporation and Certificate of Authority. One can ask for these documents directly from the lending company. Further verification may be done by cross-referencing such documents with SEC records to check for authenticity.
Inspect Local Government Permits
Lending companies must have a valid business permit from their city or municipality. A legitimate company should display or be able to present its Mayor’s permit upon request.
Look for Red Flags
- Exorbitant Interest Rates: While interest rates may vary, extremely high rates, especially those significantly above prevailing market norms or beyond any regulatory ceilings, raise questions of legitimacy.
- Absence of Physical Office or Registered Address: The lack of a verifiable business address or physical presence is another red flag.
- Anonymous or Non-transparent Ownership: If ownership and top management details are hidden or unclear, caution is warranted.
- Previous SEC Advisories or Warnings: A company that has been explicitly named in SEC advisories or public warnings for unlicensed operations is suspect.
Consult with Reputable Professionals
If in doubt, consult with a lawyer or an accountant experienced in corporate and financial regulations. They can conduct due diligence checks and evaluate the overall legitimacy of the lending business.

IV. POSSIBLE LEGAL CONSEQUENCES FOR UNREGISTERED OR FRAUDULENT LENDING ENTITIES

Cease-and-Desist Orders
The SEC is empowered to issue cease-and-desist orders against unlicensed lending companies or those in violation of the Lending Company Regulation Act. If “Nobleza Lending Company” (or any entity) is operating without proper authorization, the SEC can prohibit it from continuing its business.
Criminal Liability
Section 12 of RA 9474 outlines penal provisions for persons or corporations operating a lending company without the required authority from the SEC. Violators may face fines and/or imprisonment.
Administrative Penalties
The SEC can impose administrative sanctions, such as fines, license suspension, or permanent revocation of the Certificate of Authority. Officers responsible for the corporation’s violations may also be fined personally.
Civil Liability
Victims of fraudulent or unauthorized lending schemes may pursue civil actions to recover any amounts lost. If a lending company has been declared fraudulent, the courts may order restitution of sums paid by borrowers under illegal interest rates or oppressive conditions.
Reputation and Credit Standing
For borrowers, dealing with illegitimate lenders can have significant credit and reputational consequences if disputes arise regarding repayment terms, interest rates, or alleged defaults. For the lending entity, being named in SEC orders or legal complaints can irreversibly damage its corporate standing.

V. COMPLAINTS, DISPUTES, AND REMEDIES

Filing a Complaint with the SEC
If one suspects that a lending company is operating without authority or is engaging in questionable practices, an aggrieved party or any member of the public may file a complaint with the SEC. Supporting documents such as loan agreements, payment receipts, and screenshots of communications will aid in substantiating the claims.
Recourse Through the Courts
Borrowers who have suffered damages due to usurious rates or misrepresentations may pursue legal action. Civil lawsuits can be filed in regular courts for the recovery of damages, cancellation or reformation of contracts, and other appropriate relief.
- Usury: While the Philippines no longer has a strict usury law imposing absolute ceilings, the Supreme Court has held that unconscionable interest rates are subject to reduction by the courts.
Mediation or Settlement
Many financial disputes, including those with lending companies, can be settled through negotiation or alternative dispute resolution (ADR) mechanisms such as mediation. Parties often prefer to reach a compromise to avoid costly and time-consuming litigation.
Reporting Harassment and Privacy Violations
If borrowers experience harassment, abuse, or threats from a lending company’s collection practices, they can file complaints with the SEC and other relevant agencies (e.g., the National Privacy Commission for data privacy breaches, the Philippine National Police for threats or harassment).
Local Government Intervention
Because lending companies also need local business permits, the LGU can revoke these permits or take action if the company violates local regulations.

VI. TIPS TO PROTECT BORROWERS AND POTENTIAL CLIENTS

Conduct Thorough Research
Verify the company’s details through the SEC website or official channels. Do not rely solely on online advertisements or word of mouth.
Examine the Loan Agreement Carefully
Review all terms and conditions, especially interest rates, penalties, and processing fees. Watch out for clauses that allow the lender to unilaterally change interest rates or forcibly collect collateral.
Ask for a Disclosure Statement
Under Philippine law, lenders are required to provide a Disclosure Statement reflecting the true cost of the loan, including interest rates, penalties, and other charges. Non-compliance with this requirement may signal questionable practices.
Be Wary of “Too Good to Be True” Offers
Illegitimate lenders may lure borrowers with exceptionally low interest rates or fast approvals, only to impose hidden charges later. Always read the fine print.
Avoid Providing Sensitive Personal Information Upfront
Provide personal and financial information only after verifying the lender’s legitimacy. Illegitimate companies could misuse data for unauthorized purposes.

VII. FREQUENTLY ASKED QUESTIONS

How do I know if the interest rates charged by a lending company are legitimate?
Check applicable SEC Circulars on interest rate ceilings and compare the quoted rate to prevailing market rates. If in doubt, consult a legal or financial professional for a more precise assessment.
What is the significance of the Certificate of Authority from the SEC?
The Certificate of Authority confirms that the SEC has vetted and approved the lending company’s operations within the scope of RA 9474. Operating without it is punishable under the law.
Can a lending company operate solely online?
While some lenders have online platforms, they must still possess a legitimate SEC registration, physical business address, and valid Certificate of Authority. Purely digital lenders are not exempt from these requirements.
Is there a difference between a “financing company” and a “lending company”?
Yes. Financing companies are governed by Republic Act No. 8556, while lending companies operate primarily under RA 9474. Financing companies typically source funds from the public through the issuance of financing instruments, whereas lending companies lend their own capital or funds from a limited number of private investors.
What if the lending company claims SEC registration but cannot produce relevant documents?
Immediately verify with the SEC’s official database or file a formal inquiry. Genuine lenders readily show their corporate and regulatory documents upon request.

VIII. CONCLUSION: BEING AWARE AND PROACTIVE

Verifying whether “Nobleza Lending Company” is legitimate—or any other lending entity—requires diligence in confirming SEC registration, obtaining the Certificate of Authority, reviewing corporate documents, and checking for up-to-date local business permits. The Lending Company Regulation Act of 2007, along with applicable SEC memoranda, provides a robust legal framework designed to protect borrowers from unscrupulous practices. Consumers and investors alike should remain vigilant, perform background checks, and consult legal professionals whenever uncertainties arise.

In summation, legitimate lending entities in the Philippines must satisfy the following fundamental criteria:

Proper registration with the SEC under the Revised Corporation Code;
Possession of a valid Certificate of Authority under RA 9474;
Ongoing compliance with regulatory reporting obligations;
Adherence to fair lending practices, including transparent disclosure of rates and fees; and
Compliance with local business licensing requirements.

Should you, as a borrower or concerned stakeholder, ever suspect that a lending company is operating illegally or taking advantage of consumers, the path to resolution lies in promptly filing a complaint with the SEC or seeking legal counsel. The law provides multiple remedies—administrative, civil, and criminal—to safeguard the public’s welfare and maintain integrity in the lending industry. By being informed and vigilant, you can protect yourself from falling victim to illegitimate lending schemes while helping maintain a fair and accessible financial marketplace in the Philippines.

Disclaimer: This legal article is presented for informational purposes and does not constitute legal advice. Always consult a duly licensed attorney for guidance specific to your circumstances.