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Brazil: CADE approves formation of credit bureau

By  |  November 15, 2016
Brazil: CADE approves formation of credit bureau

Competition regulator agency CADE has approved, with some restrictions, a plan presented by the five main commercial banks, which seek to create a private credit research bureau with the capability of compiling and presenting credit information pertaining to citizens and bank customers.

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    CADE remarked that its tentative approval of the Gestora de Inteligencia de Crédito (GIC) will depend on the banks’ commitment to avoid concentrating too much authority on the organism. The agency is wary of the risk that the banks will benefit from access to their customer’s information, or that this may become a barrier to entry for new competing banks.

    Banco do Brasil and Caixa Económica Federal came together last January alongside three private institutions, including Itaú, Banco Bradesco and Banco Santander Brasil in order to form the GIC. Each bank will control 20% of the company.

    CADE’s ruling also frees the way for so-called ‘Positive Offices’ in Brazil – a system designed to replace the current system of punitive credit penalties with a set of credit incentives for people who keep up with debt payments.

    Full Content: Reuters

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