Reforms To The Bylaws For The Authorization And Operation Of The Private Credit Bureaus

Autor:Mr J. Humberto Medina Alva
Cargo del Autor:CENTRAL LAW Medina, Rosenthal & Asociados

The law that regulates and allows the operation of credit bureaus in Honduras dates back to 2005 and it has been created to allow an early warning of the credit risk of individuals and ideal entities.

Based on that alert decisions are made before a credit is extended.

Some articles of the "Bylaws for the authorization and operation of the private credit bureaus" have been modified by Resolution GE NO. 1010/07-06-2011, Official Gazette No. 32,535 of June 15th, 2011) recently.

The amendments are done to regulate the authorization and operation of private credit bureaus which are referred as Credit information Companies or Credit Bureaus. Therefore the financial institutions which provide information to credit bureaus about their clients credit's default have to manage different kind of controls to ensure that the information will not be incorrect or delayed.

The purpose of the credit bureau is to manage information from entities supervised by the CNBS as well as non-supervised and provide additional services to their core business to adequately identify the debtor, its level of debt as well as evaluating the level of its risk.

The credit bureaus are required to retain in their data bases the credit histories, data for personal identification and to evaluate the economic and financial capacity provided, following these rules:

Disclose credit information for a maximum of 5 years which will be reduced to 3 if the obligation is cancelled; Eliminate the credit information of the cancelled obligation after the above mentioned period; The elimination of credit history will not apply to off-loans when the balance is equal or more than fifteen thousand dollars and also if the debtor has been convicted of financial crime. The credit reference service should be provided based on the principles of Reliability, Availability, Quality and Integrity. The bureaus will be responsible for misuse and unauthorized data of the holder of information.

Regarding its incorporation the Credit Bureaus must be established as a fixed capital corporation, indicate its exclusive activity and request the authorization to operate to the CNBS.

The bureaus will be considered auxiliary credit companies, will be under the supervision of the CNBS (must send quarterly activity reports as well as monthly reports) and shall apply the provisions of the Financial System Law.

The bureaus can collect, store, connect, consolidate and process data concerning the bearer of the...

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