A credit consultant is warning authorities and companies offering lines of credit, to start putting systems in place in order to comply with new pending requirements for credit reporting regulations.
Chief Executive Officer of the Caribbean Credit Bureau Canada, Grady Clarke, said it was a matter of time before Barbados would be required to enact credit reporting legislation, which he said could impact negatively on institutions that offer a line of credit if they were unable to comply.
Clarke said, he was especially concerned about credit unions and other small credit providers and credit information providers being able to meet the costs associated with licensing as well as penalties that might occur.
“Be aware of the new credit reporting legislation that is being enacted in different parts of the Caribbean. And instead of waiting for it to be legislated, start acting as if we are already legislated,” said Clarke in an interview with the media on the sidelines of an Effective Credit Management and Debt Recovery seminar at the Savannah Beach Hotel in Barbados.
So far, Jamaica and Guyana have enacted Credit Reporting legislation and most recently the Bahamas produced a draft bill. The International Finance Corporation (IFC) and the Eastern Caribbean Central Bank (ECCB) are collaborating to finalize a draft Harmonized Credit Reporting Bill and regulations, as they seek to establish the regulatory and supervisory framework to support, and advance credit reporting system in the Eastern Caribbean Currency Union (ECCU). “So don’t wait until the laws are here. Let’s start working with the regulators so that you can take advantage of the credit reporting legislation,” urged Clarke.
The regulations speak to a number of issues ranging from application for license forms, subscriber agreement, licenses fees, penalties, data protection and credit information sharing, among others.
He said, because businesses operate in a global trading environment, financial institutions should expect to be subjected to regulations from abroad.
“So let’s not wait, and we might as well prepare ourselves for what we are going to have to deal with. At the same time, if we want to be a part of the global community, and be able to trade with corresponding banks, then it is extremely important for us to comply and start operating to the higher levels that are now going to be required of us,” he said, adding that it was important that all stakeholders were involved in the discussions.
Pointing out that he was not against legislation within the region, Clarke said institutions should ensure however, that client information was always protected. “This is an urgent plea for us to really do our due diligence to see what the playing field is really like, and what we need to do to protect the high value jobs… we don’t have oil and bauxite. [But] for us in Barbados and the OECS in particular… there are still many industries that we can protect and make sure we can be competitive in the global environment,” said Clarke.