On 18 May 2015, the Monetary Authority of Singapore (the “MAS”) issued its Response to feedback received from its “Consultation Paper on Proposed Credit Bureau Regulatory Framework and Credit Bureau Bill”.
By way of background, the MAS had conducted a one-month consultation in August/September 2014 on the proposed credit bureau regulatory framework and Credit Bureau Bill (the “CBB”) to strengthen oversight of credit bureaus in Singapore.
Credit bureaus and their members
Credit bureaus are organisations that collect, use and disclose information relevant to the credit worthiness of borrowers (“credit data”). The credit data is used by its members, such as banks, finance companies and credit card companies, to facilitate their credit assessments and loan underwriting decisions.
In Singapore, there are currently two credit bureaus, Credit Bureau (Singapore) Pte Ltd and DP Credit Bureau Pte Ltd, that are recognised by the MAS under the Banking Act to collect and disclose credit data to their members.
Noting that credit bureaus are collecting more detailed borrower credit information from banks, the MAS proposes to subject them to formal oversight under the proposed CBB, so as to safeguard sensitive borrower credit information and protect consumers’ interests.
The proposed CBB covers the following areas:
- Licensing of credit bureaus.
- MAS supervisory powers over licensed credit bureaus (“LCBs”) and their members.
- Formalising obligations of LCBs and their members.
- Reinforcing consumers’ rights to access, review and dispute credit records. Notably, the MAS proposes to require LCB members that have approved or rejected a credit application by a consumer, to furnish to that consumer his credit report, free of charge and within a specified time frame.
The MAS has clarified as follows in its Response:
- Scope of the CBB: While the CBB will apply to credit bureaus that collect credit data from any licensed bank in Singapore, it will not apply to credit bureaus which do not collect any data from licensed banks.
- Obligations of LCBs: Under the proposed CBB, the MAS will have statutory powers to enforce the legal obligations of LCB members under the CBB and to investigate any breaches. The MAS will prescribe in regulations the turnaround time for various stages of dispute resolution, such as investigation, updating of erroneous data, and informing other members of the update of erroneous data. The requirements will apply to both LCBs and their members.
- Obligations of the members of LCB: LCBs and their members should institute appropriate processes to verify disputed data against relevant documentary evidence. In this regard, the MAS will work with the industry to educate consumers on the advantages of providing such documentation to facilitate the timely resolution of data disputes. Regarding the furnishing of free credit reports by LCBs, the MAS will amend the CBB to require LCBs to provide, upon request by the consumer, a free credit report within 30 days from the date of credit approval or rejection.
- Charging of reasonable fee for express service: While consumers are entitled to free credit reports, LCBs will not be restricted from charging fees for value-added services such as an express mail service for credit reports.
An article about the Consultation Paper was featured in a previous issue of the Allen & Gledhill Financial Services Bulletin (August 2014). To read the article entitled “MAS consults on proposed credit bureau regulatory framework and Credit Bureau legislation”, please click here.