Proposed Amendment to Meaning of "Credit" in Credit Reporting Act 2013

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Proposed Amendment to Meaning of Legislation presented to the Dáil last week proposes to amend the definition of "credit" in the Credit Reporting Act 2013 so that personal contract plans and hire purchase agreements fall within the ambit of that Act.

The Credit Reporting Act 2013 (the "Act") came into effect on 27 January 2014 and provides for the establishment, maintenance and operation by the Central Bank of a national database of credit information (Central Credit Register or CCR).

The Act imposes ongoing reporting obligations on relevant lenders to submit credit and personal information in relation to in scope credit applications and credit agreements to the CCR.

Definition of "credit"

Under the current definition of "credit" in the Act, personal contract plans (PCPs) hire purchase agreements and other similar arrangements are excluded from the ambit of the Act.

The government sponsored legislation presented to the Dáil on 10 April 2018 (the "Bill") proposes to refine the trade credit exclusion within the definition of "credit" under the Act to ensure PCPs, hire purchase agreements and similar arrangements fall within the definition of "credit" in the Act.

Broadly speaking, relevant credit will be trade credit if

  • both the person by whom (the "first-mentioned person") and the person to whom the relevant credit is provided is each acting in the course of his or her business, trade or profession;
  • the first mentioned person is not a regulated financial services provider;
  • the terms of the relevant credit provide for repayment of the whole of the credit by a date no later than six months after the date of its provision; and
  • the purpose of the relevant credit is to facilitate the purchase of goods or service from the person providing the relevant credit.

Impact of proposed change

If enacted as currently drafted, the narrower drawing of the trade credit exclusion within the definition of "credit" should bring hire purchase agreements, PCPs and leasing agreements (subject to their contractual terms) within the scope of the Act, the exclusion of which in the Act had been considered an inadvertent oversight. This proposed amendment to the Act has been anticipated for some time. The Bill is currently at the first stage of the legislative process and changes may be made to the text of the Bill as it passes through the various legislative stages.

Access the proposed legislation (Markets in Financial Instruments Bill 2018) here.

Other recent developments on the CCR

Regulations have been introduced setting out the fees payable, and exemptions from fees, for access to information held on the CCR. Individuals can access the first Credit Report in a given year for free.  Access to additional Credit Reports will be subject to a fee.

Fees payable by relevant lenders will apply from 31 December 2018.  

The Regulations can be accessed here.

By William Fry.