Brazil: CADE wants banks to detail plan for new credit bureau

Brazil’s antitrust watchdog Cade wants the nation’s five biggest commercial banks to detail better their plan to set up a credit research company to collect data on borrowers’ bill-paying history, on concern the deal could hamper competition.

Brasilia-based Cade wants the lenders to follow a list of procedures to determine what are the risks that their so-called credit bureau known as GIC benefit from access to information or be protected through market barriers, according to a post in the government’s official gazette on Monday.

In January, state-controlled Banco do Brasil SA and Caixa Econômica Federal teamed up with private-sector lenders Itaú Unibanco Holding SA, Banco Bradesco SA and Banco Santander Brasil SA to create GIC, in which each will take a 20 percent stake.

The Brazilian unit of Experian Plc and Boa Vista Serviços SA are the largest providers of borrower quality information in Latin America’s largest economy. They obtain from the country’s banks data on borrowers’ behavior, promptness patterns and also estimates on demand for both consumer and corporate credit.

The government set rules for the creation and operation of so-called positive credit bureaus early in 2012. The regulation aimed to help phase out Brazil’s current credit scoring system based on the blacklisting of defaulters, with no incentives for those who are up to date with their debts.

Full Content: Reuters

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