Wednesday, 11 December 2013
Credit Reporting Bill 2012: Second Stage
I welcome the Minister and thank him for his detailed explanation of the Bill which is an important step forward in improving the current arrangements for the recording of consumer credit information. We will support the Bill in the Seanad, as we did in the Dáil.
When will the new regime be up and running once the Bill is passed? There have been some reports that it will be as late as 2016.
Perhaps there could be clarification of when the Minister believes the new system will be up and running, as it is important it is done soon. It leads to much improved transparency for the customer, first and foremost, and it will ensure that decisions made by banks, particularly about individuals with a heavy debt burden, will be accessible. In the US, people are far more familiar with accessing their credit information and ratings on a regular basis but in Ireland it is something people generally do not do. By rolling out this new process under this Bill, we will have to engage in a consumer education and information programme. I welcome the Minister's statement that the individual will not be charged if an application for an update is made once every 12 months, as that is reasonable. A nominal charge could apply to cover expenses of the Central Bank for more frequent updates. I suggest that the levy applied to banks on credit information providers should not be passed to the consumer in a loan application. This has been done with other fees and it should be made clear to the banks that even if it is a nominal charge to cover the bureau's expenses, it should not be passed on to individual customers in full or in part when there is an application.
The limit is set at €2,000 and anything above that should be checked with the bureau. It is mentioned in section 15 that the limit can be lowered and there has been mention of €500. Money lenders, sub-prime lenders and particular short-term credit providers are prevalent in England and are becoming more prevalent here. These are lending amounts of €200, €300, €400 or €500. It might get some of these lenders out of a bind if they can say that under law, they do not have to check Darragh O'Brien's rating, for example, to see if I am up to my neck in debt. Powers have been provided so that institutions can look at amounts of less than €2,000 but I wonder why there has not been a stipulation that the bureau should be consulted on amounts more than €500.
The National Consumer Agency suggested that spouses, guarantors and executors would be allowed access individuals' information but I warn against that, as it is not appropriate. In his comments, the Minister indicated that should a borrower give consent to an individual, he or she may access the information but I wonder if the Minister is just referring to the institution. For example, if I give written permission to my wife allowing access to information, does that go to the bureau and is it put on its system? How will that work in practice? I welcome the fact that the Minister has not automatically given the right of access to credit scores to spouses, executors or guarantors.
I understand the Data Protection Commissioner has some concerns about personal public service, PPS, numbers appearing on loan applications, and it is intended that the credit bureau will hold such information. The commissioner makes a fair point in that a PPS number is not for the benefit of private or lending institutions so how will that information be protected? What discussions did the Department have with the Data Protection Commissioner, as the office seemed to strenuously oppose banks collecting individuals' PPS numbers?
I have already mentioned consumer education, which is important. I do not intend to delay the Minister as the Finance (No.2) Bill which we will discuss later has much more meat on it.