CREDIT REPORTING & THE CONSUMER Bank of Jamaica 6 April 2017 Presenter: Sharon Johnson

Overview of Presentation Background on Credit Bureaus Benefits to the Consumer Jamaica’s Credit Reporting System Conclusion

BACKGROUND: Credit Bureaus A credit bureau: An agency that collects information on your credit history from institutions that provide credit to you. Provides that information in a report, for a fee, to the providers of credit.

BACKGROUND: What is a Credit Report A credit report represents your comprehensive credit profile which includes a history of your credit transactions, such as: Your total number of credit facilities; Your total balances; and Your payment history (including any default).

BACKGROUND: What is a Credit Score Many lenders, as well as credit bureaus themselves, use credit bureau information to generate credit scores. Credit scores are statistical estimates of the probability of how you might repay in the future based on characteristics available in the information provided to the credit bureau.

BENEFITS: To Consumers Develop your “reputational” collateral Faster processing of your loan applications Lowering your financing cost for borrowers with good credit history More disciplined use/management of credit Business expansion with new credit access

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: The Credit Reporting Act provides for: Entities that can submit your credit information to a credit bureau How and when your credit information may be used Who can request your credit report Security and confidentiality of your credit data Access to your own credit information Consumer complaints resolution Supervisory oversight by the BOJ

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: Eligible Credit Information Providers (CIPs) All licensed deposit taking institutions such as Banks & Building Societies Credit Unions Securities Dealers & Insurance Companies Hire Purchase Companies

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: Eligible Credit Information Providers… Cont’d Micro Finance Enterprises Utilities and Telecommunication companies Trade Creditors

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: Credit Information Under the law, a credit bureau can collect the following types of information on you: The amount and types of loans or other credit facilities granted to you The type of collateral taken in respect of your credit facilities

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: Credit Information cont’d History of your financial transactions An analysis of your information (e.g. in the form of a score) Limited personal information (e.g. name, address, taxpayer registration)

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: Disclosure of Credit Information A credit bureau may disclose your credit information to: A credit information provider (CIP) (with YOUR written consent) You the Consumer The Supervising Authority (i.e. BOJ) Under Court Order  

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: Uses of Credit Information A CIP Can Only Request a Credit Report for you if: A loan or other credit facility is being granted to you Dealing with any other financial or commercial transactions for you You may give written instructions to a credit bureau to provide a credit report for: Insurance underwriting Employment purposes

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: Consumer Protection

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: Consumer Protection You are entitled to: Receive a credit free report in each calendar year A full disclosure of your information in the credit bureau’s possession

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: Consumer Protection…cont’d Your free report should show: All information pertaining to you in the possession of the credit bureau The sources of the information The name and address of every person to whom your information has been sent in the last six months

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: Consumer Protection…cont’d A lender that has obtained your credit report is required to confirm to you the name and address of the credit bureau that provided the report. Where a benefit is denied or a liability is imposed on you based on credit information provided by a credit bureau, you must be informed of your right to request the name of the credit bureau.

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: Consumer Protection…cont’d If you have a dispute over the accuracy or completeness of your credit report, you may make a complaint in person or in writing to the credit bureau. If you are dissatisfied with the outcome after reporting it to the credit bureau, you may submit the complaint in writing to the Supervising Authority (i.e. Bank of Jamaica). The Supervising Authority investigates and makes a decision or issue a direction.

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: Consumer Protection…cont’d If either you or the credit bureau is dissatisfied with the result of the BOJ’s investigation, there is a right of appeal to an Appeals Tribunal. The Appeals Tribunal consists of at least 3 members appointed by the Minister of Finance, one of whom is an Attorney-at-law.

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: Consumer Protection…cont’d Once you make a complaint to a credit bureau, it should take steps to have the information corrected no later than fourteen days after you make the complaint. Whenever your credit information has been amended, a copy of the amended report is to be sent to every person to whom the inaccurate or incomplete information had been disclosed. You are also to be notified when the necessary changes have been made.

Supervising Authority for Jamaica’s Credit Reporting System The Bank of Jamaica Supervising Authority for Jamaica’s Credit Reporting System

KEY FEATURES OF JAMAICA’S CREDIT REPORTING FRAMEWORK: Role of the BOJ BOJ’s supervisory authority includes powers to: Review and recommend on licence applications; Conduct on-site examinations Require periodic reports from credit bureaus Issue supervisory guidance for credit bureaus’ operations Investigate and determine on your complaints Issue directions to CIPs

CONCLUSION: The credit reporting regime in Jamaica presents a significant opportunity for: Consumers seeking credit to benefit where they have a good repayment history; and Consumers to be more responsible in their borrowing habits The credit reporting system will also serve to ultimately enhance our financial sector and our economy

Thank You! Questions…