Madam, this Bill will allow licensed moneylenders access to relevant credit information before deciding to grant a loan. The Bill will also require licensed moneylenders to take additional steps to protect information and records kept.
These amendments will support the MLCB’s work in encouraging financially prudent borrowing. I have three points of clarification.
My first clarification is on a licensee’s discretion to obtain a credit report on a surety of the application before deciding whether to grant a loan. The new section 66A(4) permits but does not require a licensee to obtain a credit report on a surety. Can the Senior Parliamentary Secretary share if any guidance will be provided to a licensee on situations where a licensee is recommended to obtain a credit report on a surety? Can the Senior Parliamentary Secretary clarify how it will ensure that licensees do not request credit reports for purposes other than to assess the creditworthiness of a surety?
I understand licensees face a fine or imprisonment for misrepresenting the purpose of a credit pull. Can the Senior Parliamentary Secretary explain how such misrepresentations will be detected and policed? After all, when licensees make credit pulls, they are not obligated to inform those targeted about it.
My second clarification is on providing notice to the surety if the surety’s information is submitted to MLCB or other parties. There is a requirement under section 66(4)(b) that the licensee must inform the applicant in writing that certain information from the applicant will be submitted to MLCB to obtain a credit report. The licensee must also inform the applicant that the information may be disclosed to other parties.
However, section 66A(7) provides that a licensee is not required to seek the surety’s consent before requesting a credit report on them. Can the Senior Parliamentary Secretary clarify why a licensee must inform an applicant that it is submitting the applicant’s information to MLCB to obtain a credit report and that the information may be disclosed to other parties but it does not have to inform a surety when the surety’s information is actually submitted to obtain a credit report?
My third and final clarification is on the safeguards for borrower information disclosed. Under the new section 69(3A), a licensee may disclose borrower information, including information in a credit report to certain third parties. These third parties include an assistant of the licensee to collect debt, a contractor or agent to maintain the information system and any public agency to obtain any public record.
Additionally, the licensee can disclose information to MLCB and any prescribed persons for purposes related to the welfare and protection of applicants.
Firstly, can the Senior Parliamentary Secretary share what it considers to be purposes “related to the welfare and protection of applicants”? Can the Senior Parliamentary Secretary also share who the prescribed persons are intended to be?
Secondly, there are requirements on how long a licensee can retain information and on safeguards that a licensee must have to protect information.
A licensee must dispose of a credit report five years after the date the loan is fully repaid or the contract is terminated. If the loan is not granted, the credit report must be disposed of within one business day that MLCB is informed of the reasons for declining the loan.
The licensee is also required to make reasonable security arrangements to protect the information, including information in a credit report. Can the Senior Parliamentary Secretary share how these safeguards are extended to information provided to other third parties, such as assistants, contractors or agents? What steps will a licensee have to take to ensure that the information provided to third parties is kept secured, not used for other purposes and properly disposed of? Madam, notwithstanding these clarifications, I stand in support of the Bill.
Watch the speech here.