Regulating Electronic Credit Information
VII. Credit Information Corporation
The Congress seeing the need to centralize the data gathering and dissemination created Credit Information Corporation. The corporation is tasked to consolidate the basic credit information which may either be positive or negative information compiled. This information will come from the borrower and different private-sectors and other financial institutions. The law provides that “the primary purpose of the corporation shall be to receive and consolidate basic credit data, to act as a central registry or central repository of credit information, and to provide access to reliable, standardized information on credit history and financial condition of borrowers.”1 Initially, this Corporation will be majority owned by the government under the chairmanship of the Securities and Exchange Commission (SEC) chairman. After five years the majority share of the government in the Corporation will be sold, when the ownership of the majority of the common voting shares of the Corporation passes to private investors, the stockholders shall cause the adoption and registration with the SEC of the amended articles of incorporation within three (3) months from such transfer of ownership.2
VIII. Sources of Basic Credit Information
The basic credit information of borrowers will come from the borrowers disclosures, banks, quasi-banks, life insurance companies, credit card companies, entities that provide credit facilities (CIBI, BAP-CB, CMAP, etc.), government offices (GSIS, SSS, BSP, etc.), judicial (MuTC, MuTCC, MuCTC, MeTC and RTC) and administrative tribunals (NLRC, HULRB, etc.), prosecutorial agencies (DOJ), pension plans administered by the government and other related offices. The collation of the credit information shall be done quarterly.
Prior to the enactment of the law, the credit information from different private-sectors comes from sources only within their association and jurisdiction.
IX. System of Updating and/or Correcting Credit Information
The negative and positive credit information that tends to update and/or correct the credit status of the borrowers shall be submitted to the Corporation. The negative information aspect of the law provides that “the negative information on the borrower as contained in the credit history files of borrowers should stay in the database of the Corporation unless sooner corrected, for not more than three (3) years from and after the date when the negative credit information was rectified through payment or liquidation of the debt, or through settlement of debts through compromise agreements or court decisions that exculpate the borrower from liability. Negative information shall be corrected and updated within fifteen (15) days from the time of payment, liquidation or settlement of debts.”3
Prior to the enactment of the law rectifications were made by just indicating in the electronic credit information that such was fully settled. No corrections were made by the private-sector to rectify the credit history of the borrower.
