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The Ministry of Economics has prepared amendments to the Regulations on information about payment obligations to be included in the credit information bureau database, which will reduce for borrowers the possibility of receiving loans that they will later be unable to repay. The Cabinet of Ministers will review the regulation on 21 October.
The Ministry of Economics states that the draft regulation has been developed to improve consumer protection and prevent situations where credit providers do not have access to all the essential information for assessing the consumer’s ability to repay the loan.
The regulation currently in force provides that the credit provider is obliged to submit information to the credit information bureau about the client and their obligations no later than 10 business days after the date the client’s (including the guarantor’s) contract enters into force.
The Ministry considers that ten business days is too long a period for including information on the conclusion of new credit agreements in the credit information bureau databases, because during this time the consumer can receive a new loan, while the new credit provider, when assessing the consumer’s ability to repay the loan, will not be informed about the loans already issued to the consumer.
This potentially creates a problem for preventing excessive borrowing, because in order to correctly assess a consumer’s ability to repay a loan and not issue a loan that they are likely to be unable to repay, the credit provider must be able to assess all of the consumer’s obligations.
The purpose of assessing the consumer’s ability to repay the loan is to ensure that the consumer is issued such a loan that they are likely to be able to repay without unduly burdening their ability to cover other existing expenses.
When assessing the consumer’s ability to repay the loan, credit providers have a mandatory obligation to provide and exchange information with credit information bureaus on the borrower’s obligations and their fulfilment, including payment delays. It is essential that in this process the credit provider has all the information needed to correctly assess the consumer’s ability to repay the loan.
Therefore, the draft Regulations provide for shortening the period within which credit providers must submit information on issued loans – information to the credit information bureau databases must be provided within three business days after the date the contract enters into force.
Any changes in future will also have to be updated within three business days after the date the respective changes enter into force. This deadline was set after discussions with the industry and taking into account their technical capabilities.
Originally published at https://inc-baltics.com/sasaurinas-logu-neapdomatu-kreditu-nemsanai/
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