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The Credit Reporting Act 2013 - Important provisions have begun
Essential regulations of the Credit Reporting Act 2013 (CRA) entered into force on 30 June 2017. The majority of creditors will then start transmitting information to the new credit centre (the cash register) of the Irish National Bank (the National Bank). CRAs shall establish a single credit information repository enabling the CB to produce a full credit report for pertinent creditors.
The Commission will also increase the amount of information available to creditors in order to help them examine credit requests. While the CRA was adopted in 2013, it was not until the end of 2016 that detailed regulations on the nature and scope of the information to be collected by the registry were made public. According to the legal provisions, both regular and non-regular creditors are obliged to make available to the central bank information relating specifically to their creditors (individuals and companies) and to those granting guarantee or compensation for such credit.
"Credit " is a broad term in the credit rating agency and covers revolving credits, deferrals and other types of support. Please be aware that the credit rating agency applies only if a debtor is domiciled in the State at the date of the credit request or arrangement or if the credit facility is or will be governed by the laws of Ireland.
Which information is stored in the register? Any information provided to the central bank by creditors shall be made available through the register. This register also contains supplementary information, such as information on the borrower's creditworthiness over a given horizon and information on the borrower's failure to pay. There will be restrictions on how much information can be accessed, and the amount of information available will vary depending on who requests the register and for what use.
The information in the register may only be used for certain specified purpose, e.g. to check information in the context of a credit request. CRAs impose a number of liabilities on creditors. Report obligations: Creditors are required by law to make available specified data relating to persons and credit for credits over EUR 500.
Mandatory consulting of the Registry: Creditors must refer to the register before applying for a loan of 2,000 euros. This is not an immediate request, however, and it is anticipated that the Registry will start preparing credit reporting for credit to consumers after 30 September 2018. Creditors may also occasionally make use of the information recorded in the register, e.g. if a credit request is less than 2,000 or if a debtor has applied for a modification of the type or duration of the credit contract, surety or compensation.
CRAs require creditors to take'all appropriate steps' to check the identities of a creditor and of persons offering a guaranty or compensation. They also require creditors to check the correctness and integrity of the credit information provided by a debtor. A set of rules has been promulgated which define how a creditor can check this information.
To a large extent, this is similar to checking identities in the fight against organised crime (e.g. creditors should present a current ID card or driver's license to check their identity). Creditors must make sure that creditors and guarantees are made fully aware both of their obligations and of their credit rating agency privileges, and must notify them if the creditor has reason to believe that the creditor or guarantee has been imitated.
Eligible credit claim documents shall contain a mandatory notification that the credit rating agency requests the central bank to provide certain information. Borrower will also ask for their credit information from the Register and will require corrections of imprecisions. This first survey will cover credit for consumers and will cover credit requests and credit contracts in effect from 30 June 2017.
Creditors must also disclose information on current back-book clients if the credit arrangements fulfil certain conditions and are still open at the date of the report. Creditors shall have until 31 December 2017 to supply the information necessary for the granting of credit to consumers. The central bank will then gradually impose regular mandatory reports.
Credit rating agency needs raise operational and regulatory questions for creditors. Regulatory obligations relate to the nature of the information to be made available to the central bank and creditors may need to upgrade schemes to make sure that all necessary information is collected and reproducible. Creditors should also take into account the information requirement established by the credit rating agency, such as the requirement to make a special notification on their credit claim form.
It requires creditors to make sure that their customer-oriented documentation is kept up to date. Creditors should consider whether they are eligible for any of the credit rating agency's derogations; for example, the credit rating agency does not cover credit granted in the context of the facilitation of the acquisition of goods or a service from the individual from whom the credit is granted.