knowledge | 26 July 2018 |
Mandatory Credit Reporting Date Nears
“Consumer” credit (eg personal mortgages, car loans and credit cards) was included in “Phase 1” of the roll-out of the central credit register (“CCR”) and is already being reported to the CCR. “Non-consumer” credit (eg business loans, syndicated loans and shareholder loans) is included in “Phase 2” and reporting will be mandatory from 30 September 2018 (back-dated to include all credit in being as at 31 March 2018). The Central Bank of Ireland (“CBI”) has confirmed that hire-purchase and similar arrangements will also be included once a necessary legislative amendment has been made.
Who Needs to Report?
The reporting obligation is imposed on the credit-provider. While there are some limited exclusions, credit agreements governed by Irish law and most credit provided to an Irish-resident borrower will need to be reported to the CCR by the credit-provider. Please refer to our briefing from February 2018 (here) for further detail on the scope of affected credit.
What is Involved?
The first step for any credit-provider is to determine whether or not its business (or a particular transaction) includes reportable credit. If it does, then a series of obligations arise, including in respect of:
• verification of information (both relating to the borrower and the information to be provided to the CCR);
• provision of information to the borrower and any guarantor (including communicating statutory warning statements); and
• initial and on-going reporting obligations (reporting is required monthly and on the occurrence of certain events).
How to Address these Obligations?
For “Phase 2” credit-providers, particularly those who are not already subject to CBI regulation, assessing and addressing credit reporting obligations is a challenge. This exercise requires an analysis of the Credit Reporting Act 2013, its six implementing statutory instruments and, once registered, the CBI’s six guidance manuals (which run to more than 600 pages).
To assist credit-providers with this task, we have released a new Credit Reporting Compliance App. This provides a speedy and cost-effective way for credit-providers to assess whether they are in scope and, if so, the key matters that they need to consider with respect to compliance.
Further information on the App, including how to obtain access to it, is available here or from firstname.lastname@example.org. Alternatively, please feel free to get in touch with your usual McCann FitzGerald contact if you would like advice on the Credit Reporting Act.
This briefing is for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.