Latest Debt News
Data share initiative welcomed with caution
30/03/2006 16:04:00
The Finance and Leasing Association (FLA) has welcomed with caution a customer data sharing initiative, aimed at promoting responsible lending.
The scheme includes four high street banks and credit reference agency Credit Call collaborating to ensure customers do not borrow more money than they can reasonably pay back.
The caution surrounds the competitive nature of the initiative, which the FLA hopes will not be limited only to the four banks currently on board.
"Naturally we welcome any initiatives that help to prevent or reduce over-indebtedness. We recognise that, to get a project of this scope off the ground, initial participants need to be limited in number," said Martin Hall, director general of the FLA.
"We are partly reassured that the 'live pilot' scheme is open to other lenders. On a basis of strict reciprocity, lenders who submit data on income declared in loan applications will be able to share such data from other participants in the scheme, and thus have further evidence for judging whether the credit sought is affordable," adds Mr Hall.
The FLA would like to see the scheme eventually widened so that a more accurate assessment of how much should be lent can be made.
"We shall however continue to press for relevant current account data also to be shared with lenders who do not offer current accounts, strictly for responsible lending purposes and safeguards the banks are entitled to expect. This would give a far greater degree of certainty," concluded Mr Hall.
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