A local credit information firm is warning that sensitive information about Barbadian credit union members could become available to people outside of their credit unions should Barbados adopt credit sharing legislation being enacted in the sub-regional Organisation of Eastern Caribbean States (OECS).
CreditInfo Barbados is worried that the authorities here will adopt wholesale, the Harmonized Credit Reporting Bill and Regulations being driven by the OECS monetary authority, the Eastern Caribbean Central Bank (ECCB), in collaboration with the International Finance Corporation.
The legislation will facilitate the establishment of a regulatory and supervisory framework to support an advanced credit reporting system in the ECCU member countries, namely, Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines.
CreditInfo Barbados Director Grady Clarke today said he was concerned the OECS legislation was “likely to also find its way regulating us here in Barbados in some form or fashion”.
At the same time Clarke told journalists on the fringes of an education seminar on the regulation that after a review of the OECS bill, a draft of a credit reporting code of conduct for the industry in Barbados had been developed and was now in circulation among stakeholders for review and feedback.
“I believe that while we need to adhere and incorporate best practices from aboard we need to be vigilant and do what is in our best interest in the information age. We need to be careful and analytical and pay attention to this,” he said, while pointing out that Barbados was already largely compliant when it came to information sharing and credit reporting.
Today’s seminar at Accra Beach Hotel in Rockley, Christ Church, was designed primarily to bring local collection, compliance and credit officers and other industry players up to date on the OECS regulation and “to advise people on the good, the bad and the ugly” of it, Clarke said.
According to the ECCU, the draft OECS Harmonized Credit Reporting Bill provides for “a fair and an accurate” credit reporting system within the financial system in order to assure objective credit decisions; enables credit information sharing and reporting; provides for the regulation of the conduct of credit reporting and credit reporting services; and provides safeguards for data protection for customers of credit providers and for related matters.
However, stressing that any legislation regarding credit information should be voluntary, Clarke said: “We believe that consumer rights should be respected, that Barbados should embrace best practices to make it the best place to do business.”
The draft legislation proposes that the ECCB will be the regulator, and it makes provision for credit information providers such as banks, money services business, credit unions and micro-finance institutions among others, to share information with the credit bureau.
“Credit unions are obliged, mandated to report a whole bunch of information. That is now going to be regulated by the central bank rather than the financial services commissions of the region that currently regulate them,” Clarke argued.
He insisted that with the implementation of several new global information exchange systems, including the common reporting standard, regional institutions could be caught in a trap where sensitive customer information could be shared.
“The international banks are well prepared to take advantage of the legislation and they have huge economies of scale that our indigenously owned financial institutions don’t have. This is extremely concerning. So, if the credit union sector does not pay attention to these issues and speak up, agitate and do something about it then we are to blame if the sector finds itself in problems,” he warned.
The credit information specialist said he had reached out to the current administration in order to set up meetings with the relevant Government ministers to discuss the issue and he was hopeful of a positive response. (MM)