CREDIT INFORMATION SYSTEM ACT

Case Overview and Summary

Title: Credit Information System Act

Declaration of Policy (Section 2):
- Establish a centralized credit information system for collecting and disseminating credit information.
- Improve credit availability, make credit cost-effective, and reduce dependence on collateral.
- Provide credit information at least cost and ensure consumer protection and fair competition.
- Enable financial institutions to reduce credit risk and contribute to a stable financial system.

Definitions (Section 3):
- Defines key terms like "accessing entity", "basic credit data", "borrower", "credit facility", "credit rating", "credit report", "negative credit information", "positive credit information", "submitting entity", and others.

Establishment of Credit Information System (Section 4):
- Banks, quasi-banks, insurance companies, credit card companies, and other credit providers must submit basic credit data to the Corporation.
- The Corporation can include other credit providers for compulsory participation.
- Submitting entities must provide negative and positive credit information updates within 15-30 working days.
- The Corporation collects basic credit data quarterly and can access information from government offices and tribunals.
- Submitting entities must notify borrowers about data submission to the Corporation.
- The Corporation can release consolidated basic credit data subject to provisions.
- Negative information stays in the database for up to 3 years after rectification, and must be corrected within 15 days.
- Special accessing entities are accredited and can access consolidated basic credit data.
- Special accessing entities cannot release credit reports to non-accessing entities without borrower's consent, except for LGUs.
- Outsource entities cannot release data received from the Corporation.
- Accessing entities must keep credit information confidential.
- Borrowers have the right to know reasons for credit refusal, access their credit information, and dispute erroneous information.

Establishment of Credit Information Corporation (Section 5):
- Creates the Credit Information Corporation with authorized capital of ₱500 million.
- The National Government owns 60% common shares, and qualified investors own 40% common shares.
- The SEC Chairman is the Corporation's Board Chairman, with 15 board members appointed by the President.
- Directors must meet "fit and proper" qualifications set by the SEC and relevant agencies.
- The Corporation can use state-of-the-art technology and is exempt from customs duties and taxes on imported equipment.
- The National Government must dispose of at least 20% of its shares to qualified investors after 5 years.

Confidentiality of Credit Information (Section 6):
- The Corporation, submitting entities, accessing entities, outsource entities, and special accessing entities must maintain strict confidentiality of credit information.
- Credit information can only be released to authorized entities and borrowers, except by court order.
- Violators may have accreditation suspended or revoked, and be barred from accessing the system and penalized.

Educational Campaign (Section 7):
- The Corporation must conduct a nationwide educational campaign on the benefits of the credit information system, consumer rights, and procedures.

Rules and Regulations (Section 8):
- The SEC, in coordination with relevant agencies and stakeholders, shall issue implementing rules and regulations covering:
- Basic credit data form and content limitations
- Restrictions on credit information use and transfer
- Borrower rights to access and dispute credit information
- Requirements for establishing the Corporation
- Accreditation standards for submitting and accessing entities
- Sanctions for non-compliance, breaches, and violations
- Suspension or cancellation of access rights
- Regulation of access and fees by the SEC
- Limitation of credit data to information existing after the Act's enactment

Congressional Oversight Committee (Section 9):
- A 14-member Congressional Oversight Committee is created to approve the implementing rules and regulations.

Indemnity (Section 10):
- The Corporation, its officers, and employees are indemnified from liabilities unless found liable for willful violation, bad faith, malice, or gross negligence.

Penalties (Section 11):
- Willful violation of the Act or rules is punishable by a fine of ₱50,000 to ₱1 million, imprisonment of 1 to 5 years, or both.

Inviolable Nature of Bank Secrecy (Section 12):
- The Act does not impair the secrecy of bank deposits and client funds under existing laws.

Annual Report (Section 13):
- The SEC shall submit an annual report to Congress on the implementation status.

Principal Government Agency (Section 14):
- The SEC is the lead agency to implement and enforce the Act, in consultation with other relevant agencies.

Separability Clause (Section 15):
- If any provision is held invalid, the other provisions shall remain in effect.

Repealing Clause (Section 16):
- Presidential Decree No. 1941 is repealed, and inconsistent laws are amended or modified accordingly.

Effectivity Clause (Section 17):
- The Act takes effect 15 days after publication in the Official Gazette or two newspapers of general circulation.