Banks ar­gue there was no con­sul­ta­tion

Fiji Sun - - Big Story - By Kevin McCarthy The fol­low­ing is state­ment from the As­so­ci­a­tion of Banks chair­man Kevin McCarthy’s in re­sponse to the re­cent Fair Re­port­ing of Credit Act.

The As­so­ci­a­tion of Banks in Fiji have ex­pressed their dis­may and dis­ap­point­ment in re­gard to the rushed pas­sage of The Fair Re­port­ing of Credit Act through Par­lia­ment on April 27, 2016. This Act has been passed with zero con­sul­ta­tion with any of the stake­hold­ers. This in­cludes the Data Bureau it­self, com­mer­cial banks, fi­nance com­pa­nies, hire pur­chase and credit providers and also con­cern­ingly with what ap­pears to be no con­sul­ta­tion with the pro­posed reg­u­la­tor, Re­serve Bank of Fiji.

While this bill “clears the slate” for many peo­ple, it also clears the very good credit records of those vast ma­jor­ity of re­spon­si­ble bor­row­ers. The in­abil­ity now to be able to search a per­son’s credit his­tory will greatly in­crease the risk lev­els within the per­sonal lend­ing mar­ket. Lenders will have lit­tle op­tion but to in­crease in­ter­est rates to com­pen­sate for this in­creased risk. Banks have al­ready been con­tacted by bor­row­ers in ar­rears stat­ing that if there is no Data Bureau, they see no need to pay back their loans. Banks will have no op­tion but to pur­sue legal ac­tion through to bank­ruptcy to en­force pay­ment of these loans. Pro­cess­ing times for loan ap­provals will now in­crease as banks ask bor­row­ers to pro­vide ev­i­dence of hav­ing paid off loans in the past. The in­dus­try was of the un­der­stand­ing that dis­cus­sions were to com­mence on ‘pos­i­tive’ credit re­port­ing so that those who had suc­cess­fully paid off loans would have this in their credit his­tory. At this time when those af­fected by Cy­clone Win­ston may be look­ing to bor­row funds to re­build, loans will be more dif­fi­cult to ob­tain and in­ter­est rates higher. Feed­back: jy­otip@fi­jisun.com.fj

Act re­quires re­port­ing agen­cies to meet cer­tain cri­te­rias

Fi­jians need to un­der­stand that the in­tro­duc­tion of the Fair Re­port­ing of Credit Act al­lows for Credit Re­port­ing Agen­cies to be formed pro­vided that they meet the cri­te­ria set out in the Act and its Reg­u­la­tions. The Act is not stop­ping credit re­port­ing but reg­u­lates credit re­port­ing so that it is done in a trans­par­ent man­ner.

Giv­ing ordinary Fi­jians a clean slate

What’s wrong in start­ing on a clean slate? What’s wrong in giv­ing the ordinary Fi­jian a chance? Jus­tice? And fair play? What’s wrong in hav­ing reg­u­lated fair cred­it­ing of credit busi­ness?

If in­ter­est rates as they claim will go up be­cause of a reg­u­lated data bureau or be­cause of hand­ing over of in­for­ma­tion of the data bureau than can they tell us if in­ter­est rates went down when data bureau started? Ob­vi­ously it didn’t go down. It went be­cause of other fac­tors. Rather than moan­ing about it they should get on with it. Are they fright­ened that if it is well reg­u­lated that it will al­low more pro­fes­sional op­er­a­tors to come into the mar­ket from Aus­tralia and New Zealand? Feed­back: jy­otip@fi­jisun.com.fj

While this bill “clears the slate” for many peo­ple, it also clears the very good credit records of those vast ma­jor­ity of re­spon­si­ble bor­row­ers

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