A major overhaul of current EU data protection rules was voted by the EU Civil Liberties Committee this week. The new rules are to replace the current “patchwork of national laws” and the EU Civil Liberties Committee is pushing for a fast track ratification by member states.
The new rules are supposed to put people in control of their personal data. Any person would have the right to have their personal data erased if he/she requests it. Explicit consent is a must, there are limits on profiling, and companies seeking transfer of personal data to non-EU countries must seek authorization from the national data protection authority before transferring any data.
How the new regulations will work in the financial services and the credit information industry has yet to be seen. Right to erasure goes against the financial stability norms established by Basel II and III guidelines concerning the credit history of a person or a business. The rules may put people back in control over their data, however they will no longer be in control over access to finance. Modern credit information solutions have helped to remove the subjectivity in lending. Having less information or no information as the result of erasure may put the EU back into the ‘dark ages’ of subjective lending.
Source: BIIA Editorial Comment