Credit Bureau ReportReport of the credit bureau
In addition, the judges argue that the CFPB should keep making customer complains publicly available and refer to Mulvaney's recent comments that the databank will soon be inactive. The report states that within six month of the notification of privacy breaches - allegedly affecting 143 million US citizens - CFPB obtained over 20,000 claims against the group.
Among the 20,000 consumer claims cited are ( i) "misuse of a post-injury credit report"; (ii) "false information about the credit report"; (iii) "[Company]'s insufficient support in solving post-injury problems"; and (iv) "[Company]'s credit surveillance service, scam warnings, safety screenings, and other ID card antitheft products".
This report also refers to special narrative from customer complaints available through the CFPB Consumers ClaimsBase.
Analyze critically the exchange of credit information under Nigeria's Credit Reporting Act 2017
Loan is the elixir of life of the economy and difficulties in access to credit were the downfall for many companies in Nigeria. A major reason for the reluctance of banks to lend to companies is the absence of credit information. Therefore, an effective credit report system is indispensable for the operation of a sound system.
One of the main objectives of a credit report system is to facilitate an exact and dependable exchange of credit information. The exchange of credit information allows creditors to correctly evaluate the borrower's ability or non-performance in credit operations before making a decision. As a result, credit is more responsibly granted and borrowed, better credit availability and reduced operating expenses as well as the risks of non-payment and frauds.
Yemi Osinbajo, Nigeria's current Chairman, Yemi Osinbajo, on 30 May 2017 undersigned the Credit Reporting Act 2017 (CRA). Among the CRA' s aims outlined in Section 1 are to promote accessibility of precise, equitable and trustworthy credit information while respecting the private nature of the information, to promote a equitable and compete credit report system and to facilitate the exchange of credit information.
The Central Bank of Nigeria (CBN) published guidelines for the licence, operation and regulation of credit bureaux and credit bureau-related transactions before the credit rating agency on 14 November 2013 in accordance with Section 57 of the CBN Act 2007. Before the Guidelines, the Credit Reporting Management System (CRMS), a publicly accessible repository for banks to record or verify N1 million loans, was set up under Section 28 and Section 52 of the CBN Act 1991.
It is interesting to note that the Credit Reporting Management System is referred to in Section 4(1) without being identical to CRMS. Paragraph 12(f) refers to'paragraphs (viii) and (ix) of the definitions of credit information service providers'. Pursuant to 13 (5), a credit information service must forward corrected credit information to the "credit information provider" and the person concerned.
"Subject ", a buzzword, is used 32 time in the CRA but is not specified in Section 27. The exchange of information in credit report schemes is launched, with credit information suppliers providing information to credit bureaus. A credit information provider may provide credit information from individuals to credit bureaus without the previous agreement of the individuals concerned in accordance with § 9(2)(a) of the credit rating agency.
Obtaining agreement would potentially and needlessly hamper the exchange of information. Article 1 of the 2013 Guidelines stipulates that individuals must be notified before their credit information can be passed on to credit bureaus. The non-compliance of a person concerned shall not preclude the exchange of information. Rationalisation of the lack of a prior approval obligation can be made on the grounds that credit bureaus are not end-users of credit information.
CROs do not depend on the information when making transactions related to the individuals concerned. In addition, credit information is sensitive and cannot be shared with credit information recipients without information sharing arrangements or the approval of the individuals concerned. Restricted exemptions, where publication may take place without the approval of the persons concerned, are the publication of CBN in accordance with judicial orders or statutes under section 9(3).
Undoubtedly, these exemptions support a case for informing individuals before passing on their credit information to credit bureaus. Paragraph 2 of Section 4 allows credit bureaus to obtain credit information from the Czech Credit Management System (CRMS) and other publicly accessible registers. This information may be passed on to credit information-user. Pursuant to 3 (1), credit bureaus are obliged to obtain, collect and compose credit information and to prepare credit statements.
This responsibility comes in on top of receiving credit information from credit information vendors. The credit bureau may provide the credit information of a person concerned to a credit information user provided that the requirements of Section 9(2)(b)(i) and 9(2)(b)(ii) are met. 9 (2)(b)(i) states that the credit information user must have a credit bureau arrangement and that publication must be for an authorised use.
9 (2)(b)(ii) provides that the credit information recipient must obtain the person concerned's prior agreement in written form. Paragraph 9(c) addresses the disclosure of information by credit information providers to third party disclosures - a very different area. According to 3 par. 3 letter e) credit bureaus are not entitled to pass on credit information to credit information seekers with whom they have no credit information contracts, unless the persons concerned agree in writing.
In addition, 12(e) requires credit information user to conclude credit bureau contracts in order to obtain credit information. Paragraph 12(e) also provides that where there is no contract for exchanging information, credit information may be retrieved with the prior informed person's prior informed consent. Neither Section 3(3)(e) nor Section 12(e) would contradict a subjunctive interpretation of the terms in Section 9(2)(b), since Section 3(3)(e) and Section 12(e) make the informed person's acceptance an option to a database sharing arrangement.
One of the 2013 Guidelines requires all banking and other types of institution to have information sharing arrangements with at least two licenced credit bureaus. That seems to contradict the CRA' s Articles 3(3)(e), 9(2)(b) and 12(e), which state that a credit information holder can obtain credit information if the person concerned agrees, notwithstanding the lack of a credit bureau interchange contract.
In addition, Section 12(f) of the CRA requests that credit information holders obtain credit information from at least one credit bureau before credit is granted, Section 5.4. Article 2 of the 2013 Guidelines obliges all banking and other intermediaries to obtain credit reporting from at least two licenced credit bureaus before providing a credit line.
On the other hand, 27 Rating agency defined credit information user as comprising electric power enterprises, telecommunications enterprises, lease enterprises, cooperatives and providers of goods or provision of goods or not. In addition, 12(g) of the CRA stipulates that credit information holders must comply with all other requirements in accordance with other laws and CBN rules and policies.
6 par. 1 no. b) instructs the credit bureaus to use credit information exclusively for admissible purpose. In addition, 7 para. 1 obliges the user of credit information to obtain credit information from credit bureaus only for admissible ends. CROs are not entitled to disclose or receive information about the racial or ethnic origin, skin color, religious or religious beliefs or membership in politics of the persons concerned pursuant to § 3 (3) (d).
However, this is justified in view of the fact that they are not relevant to the creditworthiness of the persons concerned. If a credit bureau's license is withdrawn or the company is liquidated or wound up, 26 demands that the credit bureau immediately transfer its complete bank file to the CBN. Upon receiving the credit information of a concerned individual from a credit bureau, Section 9(2)(c) of the ECAI requests that credit information holders do not share the information with a concerned individual and do not use it for any purposes other than an authorised one.
Sections 12(a) and (b) strengthen Section 9(2)(c) by requiring credit information holders to safeguard the privacy and security of information received about individuals and to use credit bureaus credit reporting only for lawful ends. Persons using credit information may provide credit information to third persons or use it for any purpose other than the permitted purpose if the persons concerned give their written consent: § 9 par. 2 letter c).
Effective exchange of credit information is critical to the overall performance of any credit report system. In order to maximum the CRA' s possible usefulness, all parties must be fully obliged to fulfil their information exchange commitments in a religious way.