THE SECURITIES and Exchange Commission (SEC) has fined Nittan Capital Finance, Inc. (NCFI) P88,500 for failing to fully disclose charges, interest rates, amortization schedules, and other fees before borrowers signed loan agreements.
In a statement on Monday, the SEC said its Financing and Lending Companies Department (FLCD) found that NCFI violated Republic Act No. 3765, or the Truth in Lending Act (TILA), in relation to SEC Memorandum Circular (MC) No. 7, Series of 2011.
Acting on a complaint, the FLCD identified several material deficiencies in NCFI鈥檚 borrower disclosures, including incomplete information on upfront charges and amortization schedules.
The company also failed to disclose key conditional charges in pre-consummation documents, taxes passed on to borrowers, and the effective interest rate, the SEC said.
TILA requires creditors to disclose the full cost of credit, including interest and fees, before borrowers sign loan agreements. SEC MC 7 enforces these requirements and sets graduated penalties for violations.
鈥淸D]isclosure must be furnished with sufficient clarity and lead time to allow the borrower to understand and evaluate the true cost of credit and to decide, in an informed manner, whether to proceed or refuse the transaction,鈥 the order read.
鈥淸B]ased on substantial evidence on record, the FLCD finds that [NCFI] failed to comply with the minimum statutory and regulatory disclosure requirements under the TILA and MC 07, and is administratively liable therefor,鈥 it added.
The SEC ordered Nittan Capital to pay an administrative fine of P88,500, consisting of P20,000 for the initial offense and P68,500 for 685 days of continued violation.
The regulator also directed NCFI to review and update its disclosure templates, amortization schedules, and loan information sheets to ensure full compliance with TILA and MC 7.
Nittan Capital Finance did not immediately reply to an e-mail seeking comment. 鈥 Alexandria Grace C. Magno
