QuestionsQuestions (Republic Act No. 9510)
To establish a comprehensive and centralized credit information system that collects and disseminates fair and accurate credit information to provide reliable data on borrowers’ credit standing and track record, improve availability and cost-effectiveness of credit (especially for MSMEs), reduce excessive dependence on collateral, protect consumer rights, ensure fair competition, and help financial institutions reduce credit risk for a healthier and more stable financial system.
Basic Credit Data includes positive and negative credit information provided in connection with credit applications/availment, and other relevant factual and objective information in the submitting entity’s files or other sources. Without a duly accomplished written waiver, basic credit data must exclude confidential information on bank deposits and/or clients’ funds protected under RA 1405, RA 6426, RA 8791, and their amendatory laws.
A Borrower is a natural or juridical person, including an LGU (and its subsidiaries and affiliates), who applies for and/or avails of a Credit Facility.
Banks, quasi-banks, their subsidiaries and affiliates, life insurance companies, credit card companies, and other entities that provide credit facilities are required to submit basic credit data and updates regularly to the CIC.
The CIC fixes the submission interval, but it cannot be less than fifteen (15) working days nor more than thirty (30) working days.
Negative information should stay unless sooner corrected for not more than three (3) years from the date when the negative credit information was rectified (e.g., payment or liquidation, settlement through compromise, or court decisions exculpating the borrower). Once rectified, it must be corrected and updated within fifteen (15) days from payment/liquidation/settlement.
The borrower has the right to know the causes of refusal of credit applications/services where basic credit data is used as basis; the right, for a reasonable fee, to ready and immediate access to credit information pertinent to the borrower; and the right to dispute erroneous/incomplete/outdated/misleading credit information before the CIC. The CIC must investigate within five (5) working days, delete unverified inaccurate information, and inform the borrower and accessing entities within five (5) working days. Denial without justifiable reason entitles the borrower to indemnity.
All covered entities (CIC, submitting entities, accessing entities, outsource entities, special accessing entities, and duly authorized non-accessing entities) must hold credit information under strict confidentiality and use it only for the declared purpose of establishing borrowers’ creditworthiness. Outsource entities are absolutely prohibited from releasing basic credit data other than to the CIC. Violations may lead to suspension/revocation and penalties.
The CIC may release consolidated basic credit data only to Accessing Entities, Special Accessing Entities, Outsource Entities, and Borrowers. Credit information cannot be released to entities other than those enumerated except upon order of the court.
Special Accessing Entities are prohibited from releasing basic credit data received from the CIC for credit reports/credit ratings derived from that data to non-accessing entities unless written consent/authorization is obtained from the borrower. An exception applies for LGUs (or their subsidiaries/affiliates) where a constituent of the concerned LGU may request and pay reasonable fees.
Its primary purpose is to receive and consolidate basic credit data, act as a central registry/repository of credit information, and provide access to reliable standardized information on credit history and financial condition of borrowers. It is authorized to adopt a seal, enter contracts, acquire property, sue and be sued, and perform acts necessary to carry out the Act’s purposes.
The National Government owns and holds 60% of the common shares; qualified private investors (limited to industry associations of banks/quasi-banks and other credit-related associations including associations of consumers) own 40%, with no single qualified investor represented by an association having more than 10% each of the total common shares issued.
The board has fifteen (15) members. Government-share directors are appointed by the President. The directors and principal officers must comply with “fit and proper” rule for bank directors/officers, and SEC (with relevant agencies) reviews qualifications/disqualifications. Directors must be Filipino citizens, at least 30 years old, of good moral character and unquestionable integrity/probity, and have competence in law/finance/economics/computer science/IT.
Section 12 states that nothing in RA 9510 impairs the secrecy of bank deposits and/or client funds and investments in government securities or funds, pursuant to RA 1405, RA 6426, RA 8791, RA 9160, and their amendatory laws.
Upon conviction, the offender may be fined not less than Php50,000 nor more than Php1,000,000 and/or imprisoned not less than 1 year nor more than 5 years, or both, at the discretion of the court.