Minister for Trade and Industry and deputy chairman of the Monetary Authority of Singapore (MAS), Lim Hng Kiang, has moved the Credit Bureau Bill for first reading in the Singapore parliament. MAS is introducing a new legislation to enable the regulator to license and supervise credit bureaus that collect customer credit information from banks and other financial institutions in Singapore, which looks to be following precedents in the US and Australia which are designed to protect consumer data and interests.
The bill has been some time in coming; MAS conducted a public consultation on the proposed regulatory framework for credit bureaus and the draft Bill in August 2014. Members of credit bureaus are usually lenders, such as banks, that use the information to facilitate their credit assessments and loan approval decisions. The two MAS-recognised credit bureaus are Credit Bureau (Singapore) Pte Ltd and DP Credit Bureau Pte Ltd. (Experian).
Among a long list of elements, the bill will establish a licensing framework for MAS to issue, suspend and revoke licenses to carry on consumer and corporate credit reporting business. In addition, the Bill will enable MAS to set admission criteria for LCBs (Licensing and Conduct of Business), as well as ongoing requirements for LCBs to continue to be licensed.
It will specify the circumstances under which LCBs can collect, use and disclose customer credit information and LCBs will be required to safeguard the confidentiality, security and integrity of customer information. However, they will have to provide MAS with regular reports and ensure that customers can access their credit information. MAS also wants to require LCBs to be subjected to annual audits by MAS-approved auditors.
The bill will empower MAS to approve a financial institution to become an approved member of an LCB. To reduce the administrative burden on existing members of credit bureaus, all existing members of credit bureaus will be deemed to be approved members of the LCBs which they are currently members of. It will also provide the regulator with powers to approve changes in controlling shareholdings in LCBs and approve the appointments of chief executive officers and directors of LCBs, and to disqualify or remove CEOs and directors who are no longer fit and proper to discharge their responsibilities.
Source: FTSE Global Markets