New law will not impact employment negatively, says Straughn

The Barbados Government has rebuffed a warning from the Caribbean Credit Bureau Limited (CCBL), that this country’s Fair Credit Reporting Act, is likely to cause job losses and the leakage of Barbadians’ financial data outside the region.

The bureau said in a press release issued Monday that the legislation – which has created a regulatory environment to promote the development of a fair credit reporting system; regulation of the use of such data; and the secure keeping of the private data of persons collected by a credit bureau – was not necessary and has the potential to do more harm than good.

“There is no need to regulate the business of credit bureaus as we currently have a system in place that has been proven to work for players in this sector and by extension our stakeholders,” the CCBL said.

But today, Minister in the Ministry of Finance Ryan Straughn dismissed the position of the bureau that the existing act would have a negative impact on Barbadians’ way of life.

“Many Barbadians, both as individuals and businesses, pay their bills habitually [online], and the proper recording of that is actually going to unlock further access to capital, which naturally will lead to more investment, certainly at the business level and then even within the investor class. Therefore I don’t share the pessimistic view that the introduction of the regulations around how credit bureaus are regulated, will have that negative impact on persons,” Straughn told Barbados TODAY.

The minister recalled that when he led the debate on the bill in Parliament, he was at pains to indicate that during the pandemic, a significant number of people’s credit was affected because of COVID-19.

“I don’t see the notion of people being unemployed as a consequence of the fact that persons’ credit history in total, would be taken into consideration in respect of their credit worthiness. I don’t share the view that the act and the accompanying regulations would lead to unemployment in Barbados. I think is would be the complete opposite,” the Cabinet minister stressed.

The minister also responded specifically to the credit bureau’s claim that the provisions of the legislation would result in the financial data of Barbadians being leaked outside of the region.

“Barbadians like most people in the world do e-commerce on various platforms – pay for goods and services on various platforms, have accounts on various platforms, departments stores and so on – even have access to some extent to credit and debit cards. The use of those facilities is backed by global entities such as Master Card, Visa, American Express, Pay Pal. All of these are international companies which are all external companies to Barbados,” the senior economist pointed out.

“Therefore the use of one’s data on any platform, supported by these payment service providers, have been the reality of Barbadians for more than 20 years now. The exposure of persons’ data is no more at risk with the introduction of the Fair Credit Reporting system and therefore within the context of when persons are desirous of inquiring about credit, they are the ones that can determine who will access their credit file, for one specific purpose, and for that specific purpose only.

“Whether external companies or local companies, every company, every business, every financial institution would have fiduciary responsibility to make sure that the data they have, is captured and stored only for the purposes for which they were intended, and therefore, once that is done, it does not expose people in the way that maybe is suggested,” Straughn contended.

But the minister insisted that while malicious people across the world would still seek ways to hack computer systems, such behaviour would not deter the government from pursuing that modernisation which would “unlock access to credit” for thousands of small Barbadian companies, to be able to do business locally and also expand their operations outside of Barbados.

Straughn said it is important that those messages are clearly understood by the public, rather than living in fear and not making significant progress regarding the development of the economy and the country.

Also responding to the Credit Bureau’s assertions was secretary of the Central Bank of Barbados Elson Gaskin.

Gaskin, who is also co-chair of the working group that advised on the drafting of the Bill, assured that the Act will in no way disadvantage any credit bureau currently operating in Barbados.

He explained that the legislation was introduced to standardize credit reporting activity in Barbados and to provide greater transparency for consumers.

The Caribbean Credit Bureau however declared: “Should Government refuse to reconsider this Act’s passage, we run the risk of seeing our unemployment numbers rise if local credit bureaus are unable to satisfy the requirements in the Act, the potential loss of foreign exchange, people’s data being exported and utilised by organisations and persons unknown to us who by their very actions can undermine our already broken financial system.”

The Fair Credit Reporting Act was passed in December 2021 and proclaimed last month.
emmanueljoseph@barbadostoday.bb