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Bank Fosters International
Public – Private Dialogue on Credit Reporting
Beijing conference draws
nearly 300, highlights include discussion of new credit reporting
standards, participation of sitting legislators and viewing of
a Colombian soap opera
By Margaret J. Miller,
FSE
Nearly 300 delegates from more
than 50 countries participated in the international conference,
“Public Policy for Credit Reporting Systems: Strengthening Public
– Private Dialogue and Partnership” which was held in Beijing,
China from September 28 to 30. The event was co-hosted by the
People’s Bank of China and organized jointly with the bi-annual
international private consumer credit reporting conference.
One of the key public – private
issues in many countries, including China, is the relative roles
to be assumed by public and private credit registries. In one
of the conference’s first sessions, these relative roles were
discussed in the context of the Chilean experience, where the
public credit registry worked in combination with private credit
bureaus to develop large positive files and broad-based credit
reporting. The value of public credit registry data for banking
supervision was also explored. Recent Bank research has shown
that public registry data can help to provide a type of ratings
framework for developing appropriate norms, regulations and risk-based
capital and provisioning levels in line with Basel II. Credit
reporting mechanisms and applications to improve access to finance
for SMEs and microfinance clients were also presented.
The conference was unique in focusing
on the importance of consumer outreach and education throughout
the two day event, by showing examples of TV videos produced in
China, Colombia and the U.S., to educate consumers on their credit
reports. In the case of Colombia, a private credit registry, Datacredito,
paid to include the issue of credit reporting in the story line
of Francisco el Matemático – a popular Colombian soap opera. Datacredito’s
goal was to educate a broad segment of the Colombian society,
including lower-income consumers, about the role of a credit report
in credit decisions and to show them how to request copies of
their reports, and challenge and remove errors.
Additional sessions looked at
the legal and normative foundations needed for safe and proper
treatment of credit data. A panel of sitting legislators from
Mexico, Nicaragua, Thailand and China provided insights into the
legislative process, based on a variety of experiences. For example,
Mexico passed comprehensive legislation for credit reporting in
2002 which has provided a much needed legal and regulatory framework
for this activity. In Thailand, a law for credit reporting which
became effective in 2003 provided for such severe criminal penalties
in cases of data errors that both private bureaus suspended operations
for several months until modified regulations could be issued.
The legislators as well as public
and private sector participants also contributed to a spirited
discussion on a new Report on the Observance of Standards and
Codes (ROSC) for credit reporting, which is being developed jointly
by FSE and the Bank’s Legal Department. These principles and guidelines
received wide praise and will be helpful in systematizing reviews
of credit reporting in future Bank and IMF financial sector missions,
as well as provide needed guidance to policy makers on this topic.
The materials presented at the
“Public Policy for Credit Reporting Systems: Strengthening Public
– Private Dialogue and Partnership” conference can be accessed
through the following links, or at www.creditreporting2004.com.
Presentations
Reporting Around the World
Margaret Miller
Credit Registers: a Tool
for Improved Bank Risk Regulation and Supervision
Gerard Caprio
Using Credit Register Data
in the supervisory Process
Paulo Marullo
Credit Information System
– SCR
Cornelio Farias
Pimentel
The Development of Credit
Reporting in Public and Private Sector in Chile
Gustavo Arriagada
The Belgian public credit
registers
Jean Hilgers
Equifax/Chile Public Private
Partnership
William R. Phinney
New Battlegrounds for Credit
Reporting Regulation in the United States
Peggy Twohig
Impact of Bank Secrecy
Laws on the Development of Credit Reporting
David Medine
History of the credit bureaus
in Thailand
Paiboon Upatising
Small Business Scoring
Cheri St. John
International Experiences
with Business Credit Information
David Emery
Credit Reporting and Financing
Constraints for Small Firms
Nataliya Mylenko
Micro Finance and Credit
Information Sharing: Emerging Trends & Key Issues
Lisa Taber
Study about the utility
of sharing information between the different financing providers
in Nicaragua
Lilian Simbaqueba
Credit Reporting by Micro
Lending Institutions in South Africa
Frank Lensia
Microfinance Information
Sharing Initiatives in West and North Africa
Sarah Tsien
Building an Affordable
Homeownership Market: The United States Experience
Jim Carr
Reaching the customer and
the public Making new opportunities work 2001-2004
Ignacio Duran
Breakouts
Work Group A: Motivating
Lenders to Share Their Data
Work Group B: Including
Data From Beyond the Regulated Financial Sectors in Credit Reports
Work Group C: Preventing
Abuses
Work Group D: Private Linkage
in Credit Reporting - Can public/private interact in ways mutually
beneficial?
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