The Credit Reporting Act 2013 (the 2013 Act) will establish, for the first time in Ireland, a central credit register operating on a statutory basis. The register will be administered by the Central Bank of Ireland (the CBI). The register will replace the Irish Credit Bureau – a scheme currently operated by banks but which has no statutory basis. The new register will establish a mandatory reporting system. The CBI will use it to collect statistical information about consumer and business credit in Ireland. Establishing the register was one of the requirements of the so-called Troika (the International Monetary Fund, the European Central Bank and the European Commission) when Ireland's bail-out programme began in 2010.
The 2013 Act will require most consumer and commercial lenders to register information concerning credit granted above €500 (approximately $562), and basic information about the borrower and any guarantors. It is understood that the legislation will impact some 500 lending institutions in Ireland – banks, credit unions, other lenders and loan book purchasers.
Lending institutions will have access to the register. Individual borrowers and guarantors will be allowed access to their own personal information. Lenders will have to check the register before providing credit in excess of €2,000. The 2013 Act will apply to all credit provided to Ireland-based borrowers, and all credit governed by Irish law. It also obliges an applicant for credit to disclose to the lender if the applicant has in excess of €5,000 of foreign debt.
The CBI has outsourced the operation of the register following a tender process. It is understood that the CBI is currently in discussions with the Data Protection Commissioner to finalise the content of borrower information to appear on the register. Much of the detail concerning how the register will work will be contained in regulations to be made by the CBI. It is expected that when the scheme becomes operational it will contain consumer credit information, with commercial credit information following at a later date.
The register will provide a systematic basis for lenders to check the credit history of a potential borrower. It is in keeping with the drive, to encourage responsible lending, particularly for consumer credit. However, it will impose additional regulatory burdens on banks who will, among other things, be required to update credit information over the lifetime of the credit agreement. It seems inevitable that the additional cost of compliance will be passed on to borrowers.
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