Credit providers operating in the areas of hire purchase and finance leasing in Ireland will from 30 June 2019 have new obligations in relation to the Central Credit Register (“CCR”). From that date, hire purchase and finance lease credit providers may have to make recipients aware of their rights and obligations regarding the CCR and provide information on a monthly basis to the Central Bank of Ireland (“CBI”) relating to such credit agreements for inclusion on the CCR.
The Credit Reporting Act 2013 (the “Act”) provided for the establishment by the CBI of a central credit register to record certain information relating to credit applications and credit agreements. Loans or credit advancements are included on the Central Credit Register if the loan or credit advancement is for €500 or more and:
- the borrower or credit recipient resides in Ireland at the time of applying for such credit and / or;
- the credit agreement or loan application is governed by Irish law.
The definition of “credit” under the Act currently covers credit cards, mortgages, personal loans, overdrafts and business loans. As noted above, finance leases, hire purchase agreements and personal contract plans will also be in scope from 30 June 2019.
A “credit information provider” (“CIP”), who, as the name suggests, may have an obligation to provide information to the CBI under the Act is defined as (a) regulated financial services providers, (b) NAMA, (c) local authorities, or: “d) any person not within paragraphs (a) to (c) who provides credit…”.
Under the Act, a credit recipient is defined as the “credit information subject” (“CIS”).
Obligations on CIPs under the Act
In terms of information to be submitted, CIPs are required to submit personal and contract data to the CBI. At a high level, the personal data required in respect of corporate borrowers or credit recipients will include, among other things, name, nature of entity, sector, size, address, company number. In terms of the contract data required to be provided, it will differ depending on whether the credit agreement is regarded as an instalment contract, non-instalment contract or credit card, but will include the nature and term of credit, currency, amount, rate of interest, date of drawdown, maturity date, conditions about repayment and so forth.
The Act also requires a CIP to, amongst other things, keep records and to take reasonable steps to:
- verify the identity of CISs;
- verify the accuracy and completeness of information obtained from CISs; and
- ensure the accuracy of personal and credit information provided to the CCR.
Further information regarding these steps, and relevant forms, are set out on the CCR website.
A CIP is required to register with the CBI. In order to obtain a Provider Code and a Registration Code for this purpose, CIPs will need to complete an information request with the CBI. Once both codes are received from the CBI, CIPs then need to complete the registration process with the CBI. See the Lender FAQs sheet on the CCR website.
There is currently no cost to CIPs for registering with the CCR. However, the Act does provide for regulations to be introduced setting out a levy to be paid by CIPs, but no such Regulations have been made to date. Regulations have been introduced setting out the fees payable by CIPs for making enquiries on the CCR going forward. Beginning on 1 July 2019, the initial charge for lenders will be €3.50 per enquiry, which is subject to review by the CBI.
The Inclusion of Finance Leasing and Hire Purchase
The definition of 'credit' under the Act was expanded at the end of last year to capture hire purchase and finance leasing, including personal contract plans. This was enacted under the Markets in Financial Instruments Act 2018 signed into law by the President on 29 October 2018.
Due to this amendment, credit providers in the finance leasing and hire purchase sectors may from 30 June 2019 be required to review the CCR in respect of any person applying for credit. Further, they will have to, amongst other things (i) make credit recipients aware of their rights and obligations regarding the CCR, (ii) include on their credit application forms a notice stating that the provider is required to provide information relating to credit agreements and applications to the CBI for inclusion on the CCR and (iii) report information about such credit to the CBI on a monthly basis.
Please see our earlier update “Involved in credit? You will need to sign the Register” for more information on the Act.