The Chamber of Thrift Banks (CTB) considers the three-year rule insufficient to establish the creditworthiness of bank borrowers and has asked this be lengthened to five years at the very least.
According to CTB President Rommel Latinazo, who is also president at RCBC Savings Bank, allowing the various lenders to look into the credit history of borrowers and limiting the same to only three years is too short for purposes of establishing a reasonably credible credit history of potential borrowers.
He told the BusinessMirror the CTB is seeking a longer period beyond the three years allowed under current guidelines of the Credit Information Corp. (CIC) to help them evaluate the creditworthiness of borrowers.
“We’re trying to resolve this with the CIC. Three years is too short. It should be a little longer than five years. Each institution has its own preference. Definitely, three is short,” Latinazo said.
He said banks will contribute data to CIC to be able to obtain comprehensive information on potential borrowers.
If CIC is able to deliver what it promises to deliver, this should be favorable to the bank.
There may be apprehensions, Latinazo said, probably on the side of the borrowers.
“In terms of how much will it cost to access the information, that is something that we need to agree on,” he quickly added.
CIC President and CEO Jaime Garchitorena earlier said no fees will be charged against the borrower or the lender for the aggregation of credit data.
However, as practiced in all other countries, there are fees involved in the access of the data by both borrower and lender.
“Current discussions indicate that for lenders, a per-record access fee of P100 will be charged. This cost may be passed on to the borrower as part of the loan-processing fee, and the CIC will have no control of this and will be considered as part of the lending, marketing and or sales strategy to attract borrowers,” he told the BusinessMirror.
When fully operational, the borrower, also known as the data subject, will be able to access his data at least once a year, free of charge.
The borrower may access his once-a-year free data through the CIC or through an authorized credit bureau. At any other time outside the once-a-year free report context, the borrower may access his personal data for the same fee of P100.
The accreditation of credit bureaus is currently in progress.