Licensed moneylenders in Singapore are now allowed to disclose borrower information to a broader range of third parties, following recent amendments to the law. These changes enable licensed moneylenders to conduct more comprehensive credit checks on loan applicants. Specifically, they are now permitted to share borrower information with a prescribed list of credit bureaus, which in turn can provide additional insights on an applicant’s creditworthiness and level of indebtedness. This information is crucial for moneylenders to determine whether to approve a loan request.
Previously, licensed moneylenders were only permitted to share data with a designated credit bureau known as the Moneylenders Credit Bureau (MLCB). However, this restriction limited their ability to obtain comprehensive credit reports, as they were not allowed to disclose the borrower’s identification number. As a result, some individuals could over-borrow by deliberately withholding or inaccurately declaring their credit information.
To address this limitation, the recent amendments allow licensed moneylenders to share borrower information with specified parties for the purpose of applicant welfare and protection. In addition to credit bureaus, moneylenders can also disclose borrower details to third parties engaged in IT support or debt recovery. The intention is to ensure the welfare and protection of all involved parties.
Furthermore, the amendments empower licensed moneylenders to access records from public agencies to verify the accuracy of information submitted by loan applicants. This helps to maintain the integrity of the lending process and protect against fraudulent applications.
Moving forward, the Ministry of Law (MinLaw) plans to collaborate with social service agencies to aid borrowers in negotiating debt consolidation loans or restructuring plans with licensed moneylenders. By sharing loan information with these agencies, moneylenders can facilitate effective negotiations, ultimately benefiting borrowers in need.
These legislative changes promise to enhance credit assessment processes within the moneylending industry, offering a more robust framework for borrower evaluation while ensuring adequate protections are in place.
With the recent amendments to the Moneylenders Act, licensed moneylenders in Singapore can now share borrower information with a prescribed list of credit bureaus and other third-party service providers. This allows them to obtain additional information on an applicantβs creditworthiness and indebtedness to help them make an informed decision about granting a loan. Here’s what it means for borrowers:
Comprehensive credit checks: Licensed moneylenders can now conduct more comprehensive credit checks on borrowers with the help of various credit bureaus. This ensures that the borrower’s credit history is thoroughly evaluated before granting a loan.
- Disclosure of identification number: Moneylenders can now obtain credit reports from prescribed credit bureaus, which require the disclosure of the borrower’s identification number. This ensures that the borrower’s credit information is accurate and prevents over-borrowing by individuals who may withhold or inaccurately declare their credit information.
- Shared information limited to necessary details: The extent of the borrower information that can be shared will be limited to what is necessary. This means that moneylenders can only share borrower information with third parties engaged to provide IT support or to recover debts, or for purposes related to the welfare and protection of applicants, borrowers, and sureties.
- Accurate information verification: Licensed moneylenders can now obtain records from public agencies to verify the accuracy of information submitted by loan applicants. This ensures that the borrower’s information is legitimate and transparent, which is beneficial for both the moneylenders and borrowers.
- Protection and welfare of borrowers: The amendments also allow licensed moneylenders to share borrower information with any prescribed person for purposes related to the welfare and protection of applicants, borrowers, and sureties. This ensures that borrowers are protected and their welfare is taken into consideration during the loan application process.
In conclusion, the recent amendments to the Moneylenders Act bring about several benefits for borrowers. It allows moneylenders to conduct comprehensive credit checks, ensures accurate information verification, and provides protection and welfare for borrowers. However, it is crucial for borrowers to only borrow what they can afford to repay and to read and understand the loan terms before taking up any loan.
