- POSTED: 18 Aug 2014 22:01
- UPDATED: 18 Aug 2014 23:23
MAS is seeking feedback for its proposal to have such a bill in order to exercise greater regulatory oversight over credit bureaus in Singapore.
SINGAPORE: The proposal to enact a Credit Bureau Act is timely, according to industry players. That is because an increasing amount of consumer credit data is being collected.
The Monetary Authority of Singapore (MAS) is seeking feedback for its proposal to have such a bill in order to exercise greater regulatory oversight over credit bureaus in Singapore.
Early this year, angry customers in South Korea stormed banks after it emerged that some 20 million cardholders had their bank details stolen. An employee of Korea Credit Bureau had sold the data to phone marketing companies.
Against this backdrop, credit bureaus in Singapore said they welcome the proposals by MAS to enhance regulatory oversight. Credit Bureau (Singapore) said this will boost consumer confidence in its credit bureau, while DP Credit Bureau said it will encourage better decision-making for both lenders and consumers. Currently, these are the only two consumer credit bureaus in Singapore.
Mr Lincoln Teo, general manager of DP Credit Bureau, said: "In fact, we saw this coming, especially when the MAS released a consultation paper in Dec 2012, which spells out some of the additional information and changes pertaining to the unsecured and credit card lending rules itself."
With tighter rules on personal borrowing soon to come in force, credit bureaus need to collect more information to help banks enforce the stricter lending guidelines. According to Credit Bureau (Singapore), this additional information includes "aggregate credit limits and aggregate outstanding balances for secured and unsecured credit facilities". This information is shared among its 30 member banks and financial institutions for approved purposes to help improve lending practices and make informed decisions.
Come next June, banks will not grant further unsecured credit to a borrower if his interest-bearing unsecured aggregate debt across all banks exceeds his annual income for a consecutive period of three months or more.
The confidentiality and security of this information is being safeguarded by rules such as the Personal Data Protection Act (PDPA). Mr Tan Shong Ye, data protection leader at PwC Singapore, said: "Because of the information kept by the credit bureau, they have gone beyond the PDPA by proposing that there is a licensing regime, so MAS can more closely monitor and govern and also supervise the operations of the credit bureau."
The changes proposed by MAS will also allow it to have the power to conduct special audits or investigations of the licensed credit bureaus. The deadline to submit comments on the consultation paper is Sept 12 this year.