6th District's Provincial Board member Glenn Anthony Soco. (PNA file photo by John Rey Saavedra) CEBU CITY - A member of the Cebu Provincial Board (PB) on Monday filed a proposed ordinance that will regulate interest rates and fees of small-time lending companies offering loans but eventually pushed household owners and small-scale entrepreneurs into "debt traps". Glenn Anthony Soco, Cebu's 6th district PB member and chair of the committee on commerce, wanted a ceiling on nominal interest rates at 6 percent per month of 0.2 percent per day, and an effective interest rate of 15 percent per month or 0.5 percent per day for late payment and for failure to pay. Apart from the interest limit, Soco said a cap on penalties for late payment or non-payment at 5 percent per month on outstanding scheduled amount due should be put in place, as well as a total cost cap of 100 percent of total amount borrowed regardless of time the loan has been outstanding. Soco said the province's law-making body is informed about lending companies offering loans imposing sky-high interest rates and unreasonable terms through "5-6" schemes, daily payment of interests, confiscation of automated teller machine (ATM) cards for payroll and even pension cards. "These practices are not sanctioned by law and are thus illegal," Soco said in his proposed measure filed on Monday for first reading. Citing the effect of the coronavirus disease 2019 (Covid-19) pandemic and the Typhoon Odette, Soco said Cebuanos are now struggling due to loss of jobs while lending firms are taking advantage of the situation. "Aside from that, inflation and skyrocketing prices of oil caused citizens to hold on to offers for immediate cash in order to address the significant increase on prices of goods and services," he said. Soco said the circulars issued by the Securities and Exchange Commission (SEC) implementing Bangko Sentral ng Pilipinas (BSP) Circular No. 1133, series of 2021 that imposes a ceiling on interest rates and other fees charged by lending companies, financing companies, and other online lending platforms. The SEC exercises regulatory and supervisory authority over financial companies and lending companies, pursuant to Republic Act No. 8556, or the Financing Company Act of 1998, and Republic Act 9474, or the Lending Company Regulation Act of 2007. However, SEC's authority is only limited to duly-registered financial companies and lending companies as defined in their specific special laws, thus Soco's measure to authorize the provincial government, through PB, to regulate the imposition of interest rates and other fees against unregistered entities or persons extending loans. Soco said the people should be protected against "unscrupulous transactions and opportunistic individuals preying on desperate and unsuspecting Cebuanos". "The practice of these lending facilities/individuals, especially those considered as "fly-by-night" must be stopped in order to protect Cebuanos from these illegal, onerous, oppressive and unscrupulous financial activities designed by exploitative individuals/businesses preying on innocent and desperate citizens," he added. (PNA) }