Submission to the Hong Kong Monetary Authority regarding Consultation on Revised Supervisory Policy Manual Module IC-6 “The Sharing and Use of Consumer Credit Data through a Credit Reference Agency”

1. The Consumer Council (the Council) welcomes the efforts made by the Hong Kong Monetary Authority (HKMA) and the industry to implement the Multiple Credit Reference Agencies (CRAs) Model.
2. Regarding the HKMA's revised SPM module IC-6 on "The Sharing and Use of Consumer Credit Data through a Credit Reference Agency" which sets out the HKMA's expectation for authorized institutions (AIs) to share consumer credit data to each and every CRA in the Multiple CRAs Model through the Multiple CRAs Platform to be introduced and operated, the Council sincerely invites the HKMA to take into consideration of the Council’s comments made in its submission to the Hong Kong Association of Banks on the Draft Code of Practice for the Multiple CRAs Model (the Code) in December 2020.
3. In the submission, the Council has identified a number of issues in relation to information disclosure and transparency, and suggested that the Code should have a dedicated section to clearly set out what and under what circumstances and timeframes, information was required for public disclosure; and a specific section in the Duties for Subscribed Members and Selected CRAs, to spell out their obligations on consumer education and quality of customer care.  The Council also suggested sets of clear and reasonable timeframe requirements on specific aspects should be devised and provided in the Code.
4. The Council suggests the HKMA to consider incorporation of appropriate changes in the revised module IC-6 as and when the Code is finalised, such as if sets of timeframes on data disposal, data update and notification of opt-out upon full repayment are devised, paragraphs 5.4.3, 5.5.6 and 6.4 in the revised module IC-6 might need to be amended.
5. As raised in the submission, the Council would also like the HKMA to consider requiring AI's compliance audit report (paragraph 5.7.2) be made available for public scrutiny so as to enhance public confidence in the credit data sharing system.
6. Furthermore, the Council notes the removal of paragraph 4.1.1 of the previous module IC-6 from the revised one, which reads as follows:      

“4.1.1  To ensure a level playing field and the comprehensiveness of the CRA database , the HKMA will, as and when appropriate, monitor through regular surveys and enquiries to ensure that AIs are seeking the prescribed consent of all relevant customers and do not do so only on a selective basis.”

7. The Council is of query the rationale for such removal and if other means or measures are available for the HKMA's monitoring and checking.  The Council considers that if AIs still need to obtain from the loan applicants prescribed consent for the uploading of their existing credit data to CRAs in case they have not already given such consent previously, it may be necessary to carry out certain monitoring measures to ensure the prescribed consent is obtained properly.
8. Whilst understanding that paragraph 5.5.5 is about the provision of free credit report on an individual in case the AI has rejected the individual’s credit application, the Council suggests that provisions should be incorporated in the module IC-6, where appropriate, to require AIs to notify customers (consumers) about their entitlement to request for a copy of free credit report from CRA(s) and details about the CRA(s) of which the AIs have been engaged in their credit facility documents.
9. The Council would appreciate feedbacks from the HKMA in response to the comments made in this document.