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Planned credit information bureau needs legislation |
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By Des Ferriols
The Philippine Star 01/11/2006 The proposed credit information bureau will have to wait for a Congressional legislation as the Bangko Sentral ng Pilipinas (BSP) said an interim measure would be too complicated to implement. The BSP has been sorting through the legalities of creating an interim body but without creating a new law, bank regulators said borrowers would have to waive their rights to secrecy of deposit. BSP Governor Amando M. Tetangco Jr. however said the proposed interim body, originally intended as an in-house body under the BSP, was proving to be more difficult than expected. "At this point, it looks legally and administratively too complicated to implement," Tetangco said. "We might have to wait for Congress to pass a law that would create an actual bureau with all the necessary mandate to do its job." The BSP has been pushing for the creation of a credit information body. After almost two years of sorting through legal impediments for the creation of a separate credit information bureau, BSP officials said they have accepted to the possibility of assuming the responsibility while Congress has not passed the relevant laws and amended existing laws. But even the interim body might not be possible, especially since it would require borrowers to sign the waiver and the industry has not worked out how to regulate the information that would be accumulated by the BSP. According to a BSP source, banks are not eager to even consider the possibility of risking any exchange that would give their competitors access to their client information. The bank secrecy law has been the major impediment for the creation of the bureau that was intended to function as a central database of borrower information to allow banks to assess the credit-worthiness of borrowers. Once established, the credit information bureau was supposed to allow banks to determine whether they were dealing with a reliable borrower or a high-risk one. The BSP official said that under existing rules, delinquent borrowers are able to go from bank to bank since financial institutions do not have access to the full record and borrowing history of individuals protected by the bank secrecy law. The official said the BSP preferred the creation of a separate agency but existing laws would not allow it unless the bank secrecy law has been amended. "The BSP is the only institution that banks would trust with this kind of information but we might have to wait for Congress to take action and create the independent bureau itself," the official said. |
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