21 August, 2014
MAS has issued a consultation paper proposing to establish a new licensing and regulatory regime for credit bureaus. This will be effected by means of a new Credit Bureau Act.
The proposed Act will define a credit bureau as any entity that carries on a credit reporting business. A credit reporting business refers to the business of preparing, providing or maintaining, for profit or gain, credit reports that would include information concerning a person’s eligibility for credit, his credit history, his capacity to repay credit or any other information relating to his credit worthiness. If a person provides credit reports on a routine, non-profit basis as an ancillary part of a business carried on for profit or gain, that would also be considered to be a credit reporting business. The credit report is a communication (in any form) that is prepared using data provided by at least one bank and which is used to assess the credit worthiness of a person.
The MAS decision to subject credit bureaus to a more elaborate regulatory framework has come in the wake of increased collection of credit data by credit bureaus (of which there are presently two in Singapore). Such credit data would include a vast amount of sensitive personal information. With the recent coming into force of Singapore’s privacy law (in the shape of the Personal Data Protection Act), this move by MAS is timely.
The proposed Act will provide for a licensing framework, where credit bureaus must hold a licence from MAS. Each licence will be valid for an initial period of five years. MAS will have the usual regulatory discretion to issue, renew, suspend or revoke a licence.
Licensed credit bureaus will be required to comply with ongoing compliance requirements. MAS will thus be able to enforce a minimum standard in the quality of credit reporting and ensure that credit bureau have appropriate measures to safeguard the confidentiality, security and integrity of credit data and respect consumer rights to access and/or correct credit data relating to themselves.
The proposed Act will also regulate the behaviour of members of a licensed credit bureau. Members of a licensed credit bureau would be subject to similar obligations to maintain confidentiality, security and integrity of credit data, and to facilitate consumers’ access to and correction of credit data.
The MAS consultation closes on 12 September 2014.
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