Credit registry stalls over unique identity and system operator
Published 21/09/2011 | 05:00
EFFORTS to create a new credit registry have hit significantly stumbling blocks after the Government proposed using mobile phone numbers to identify people in the database and the Central Bank expressed reservations about taking ownership of the new system.
The news comes ahead of the September 30 deadline for the Department of Finance to produce "proposals to enhance the quality and availability of credit information" through a credit registry that will provide a comprehensive view of individuals' borrowings across various lenders.
The deadline was imposed by the EU, ECB and IMF which hoped the new registry would empower lenders to make better credit decisions and would give the Central Bank a better overview of the credit environment.
It is understood that significant difficulties have emerged as a working group teases out the logistics of creating a blueprint for the registry.
Initial hopes that PPS/social security numbers could be used to "uniquely identify" individuals in the system were frustrated after the Government said this would breach data protection laws.
Sources also point out that there are millions more PPS numbers than there are individuals, so the numbers would not be a reliable marker. The Government is understood to have suggested using mobile phone numbers as a "unique identifier".
The suggestion is understood to have been dismissed by some parties as farcical, since many people have multiple phone numbers.
Another model under consideration would see Ireland follow the French and German model of using postcodes in a unique identifier system. Ireland does not presently have postcodes.
Sources said postcodes may be in place before the credit registry comes into being, since the agreement with the bailout troika gives the Government until September 2012 to bring legislation for the credit registry to the Oireachtas.
Difficulties have also emerged over who will actually operate the system. It was originally expected that the Central Bank would operate it, since it already receives extensive information from the banks.
Operating the system would also allow the Central Bank to use the data for "macro prudential supervision", since regulators would have a bird's eye view of credit trends.
However, the Central Bank is understood to have expressed reservations about taking ownership of the new system and the working assumption is that it will be farmed out to a third-party provider.
Although the Central Bank will still be able to draw on the data, sources said the process would be smoother if the Central Bank operated the registry.
A spokesman for the Department of Finance said he couldn't comment on plans for the registry, beyond saying that the department was "confident of meeting" the September 30 deadline. The Central Bank also declined to comment.
The Department of Finance also declined to give guidance on when the system might be operating.
Several banks, credit unions and other lenders already pool information through the Irish Credit Bureau, but the service is limited since data is limited to borrowings with members.