In our February 2016 Credit Reporting Update, we summarised the Central Bank's plans to phase in credit reporting for its new Central Credit Register (the Register) based on the Feedback Statement published by the Central Bank on 11 February 2016. The Central Bank had indicated that Phase 1 of the reporting would address consumer credit and Phase 2 would address business credit. Since then, the Central Bank has been working with CRIF Ireland Limited (the operator of the Register) to develop the Register.
On 22 September 2016, the Central Bank published a series of regulations under the Credit Reporting Act 2013 (the Act) and confirmed that:
the collection of data from lenders relating to consumer credit will begin on 30 June 2017 (9 months later than originally expected); and
the Register should be capable of producing credit reports after 31 December 2017 (again, 9 months later than originally expected).
Lenders (other than moneylenders and local authorities) will have from 30 June 2017 to 31 December 2017 to provide consumer credit data to the Central Bank. Moneylenders and local authorities will havefrom30June2017to30September2018.
Inrelationtodataforbusinesscredit(Phase 2),lendersareexpectedtohaveuntil30 September 2018 to provide this information. TheCentralBankisnotexpectedtorequire theprovisionofguarantor-relateddatatobe completeduntilatleast30September2019.
Lenders in scope include regulated financial services providers (such as banks (including passported banks), credit unions and retail credit firms), NAMA, local authorities and other persons who provide credit (including unregulated lenders). Purchasers of loans from one of these entities are also in-scope. Central banks and pawnbrokers are out of scope. The Central Bank expects more than 500 lenders to fall within the credit reporting regime.
Loans, deferred payment arrangements and other forms of financial accommodation are all in scope with certain exceptions (such as the provision of employee-only credit by an employer, intra-group credit, interest-free charge-free credit and credit provided in connection with the continuing provision of utilities). Where loan books are closed, or have been sold, the related credit agreements remain in scope. For the Act to apply, the borrower must be resident in the State when the application is made, or the governing law of the credit agreement must be Irish.
Lenders will be subject to reporting obligations where the credit is at least 500. The information that they must report will differ depending on whether the obligor is an individual or a corporate, and whether it is a borrower or a guarantor. Where lenders receive a credit application for at least 2,000, they will also be obliged to check the Register prior to advancing credit.
Borrowers will be able to check their credit records. They will also be able to ask for their record to be amended if it is inaccurate, incomplete or out-of-date, and may submit explanatory statements of up to 200 words to the Central Bank for inclusion on the Register beside their information.
THE NEW REGULATIONS
The five new Regulations are summarised below. Where dates have been included in the Regulations, the Central Bank has generally reserved the right to specify a later date if necessary.
Click here to view table.
WHAT HAPPENS NEXT?
The Central Bank will:
- begin to notify lenders of their obligations under the new Regulations;
- give lenders access to technical and guidance manuals to assist them in performing their obligations under the new Regulations; and
- launch a customer awareness campaign before the Register becomes operational.
Lenders should now take steps to:
- put in place internal systems, policies and procedures to ensure compliance with the Regulations; and
- prepare appropriate customer communications the Central Bank has confirmed that lenders need to do this before the Register becomes operational foreign credit during the initial implementation phase in light of feedback it received that the requirement is not practical, overdepends on the honesty of borrowers and would produce data that could be difficult to keep up-to-date;
- regulations prescribing a levy to be paid by lenders to fund the Central Bank's expenses in performing its functions under the Act; and
- regulations prescribing fees to be paid for access to the Register.
We will continue to issue updates as the implementation date for Phase 1 approaches. In the meantime, if you would like to discuss the impact of the Act and the Register on your business, please contact Rob Cain or Orla O'Connor.
ARE FURTHER REGULATIONS EXPECTED?
The Central Bank is allowed, under the Act, to make further regulations covering the following areas. It remains to be seen if and when these will be published:
- regulations specifying what additional information, beyond that already listed in Section 7 of the Act, will constitute "credit information" in relation to a credit application or credit agreement;
- regulations specifying what information should be sought and provided in respect of foreign credit of more than 5,000. The Central Bank has already indicated that it does not propose to deal with the provision of information about