Recent Changes to Law Allow Moneylenders to Share Borrower Information
In a recent update to the law, licensed moneylenders in Singapore now have the freedom to run credit checks on loan applicants and share borrower information with third parties. These changes, passed by Parliament on Nov 22, aim to enhance comprehensive credit checks and assist moneylenders in making informed decisions on loan approvals.
Under the revised regulations, licensed moneylenders can now disclose borrower details to a prescribed list of credit bureaus. These bureaus will then provide additional information on an applicant’s creditworthiness and indebtedness, enabling moneylenders to determine whether to grant a loan. Additionally, licensed moneylenders can share borrower information with third parties engaged in IT support or debt recovery, further improving their loan assessment processes.
To ensure data privacy and limit the extent of information shared, licensed moneylenders will disclose only necessary details. For instance, when obtaining a credit report from a prescribed credit bureau, the loan applicant’s identification number will be required.
The amendments also empower licensed moneylenders to obtain records from public agencies to verify the accuracy of information provided by loan applicants. In terms of borrower welfare and protection, licensed moneylenders can now share information with prescribed entities, which initially include social service agencies that assist borrowers in debt consolidation or restructuring plans.
These changes to the law provide licensed moneylenders with a more comprehensive toolset for conducting credit checks and evaluating loan applications. By increasing data sharing capabilities with relevant parties, moneylenders can make informed decisions to ensure the welfare and protection of applicants, borrowers, and loan sureties.
If you are considering a loan, these recent developments will have a positive impact on providing better loan options tailored to your financial situation and needs.
As a borrower, understanding the implications of the recent changes to the Moneylenders Act is important. Here are some key takeaways:
Credit checks may become more comprehensive: Licensed moneylenders can now share information with a prescribed list of credit bureaus. This means that these bureaus can provide additional information on your creditworthiness and indebtedness to help moneylenders determine if they should lend to you.
Third parties may be involved: In addition to credit bureaus, licensed moneylenders can also share borrower information with third parties, such as IT support personnel or debt recovery agents. However, the sharing of borrower information will be limited to what is necessary for these third parties to carry out their tasks.
Protection of borrowers is a priority: The amendments to the Moneylenders Act also allow licensed moneylenders to share information with prescribed parties for the purpose of protecting the welfare and interests of applicants, borrowers, and sureties. This means that moneylenders can work with other entities to ensure that borrowers are not being put at risk.
Your identification number may be disclosed: To obtain a credit report from a prescribed credit bureau, licensed moneylenders will need to disclose your identification number. This information is necessary for the bureau to verify your credit history and provide an accurate report to the moneylender.
Accurate information is crucial: Licensed moneylenders can now obtain records from public agencies to verify the accuracy of information provided by loan applicants. This means that it is important for borrowers to be truthful and accurate when submitting their information to moneylenders.
Overall, it is important for borrowers to be aware of these changes to the Moneylenders Act. While the amendments may allow for more comprehensive credit checks, the protection of borrowers and the accuracy of information provided remains a priority. As always, borrowers should exercise caution and responsibility when taking out loans from moneylenders.