Lenders seek to share credit data to assess loans
The financial industry wants banks and other lenders to be able to share positive credit data for property mortgage loans, under a proposal to broaden the scope of a code of practice on privacy.
But the amount of positive mortgage data shared would be limited to the number of outstanding mortgages a loan applicant has, something the privacy chief supports.
'We are acting from the perspective of data protection,' Privacy Commissioner Allan Chiang Yam-wang said. 'Minimum disclosure and minimum use would enhance privacy. That's our standpoint.
'Data privacy is important and I guess from reading the industry proposals that they would actually follow up with the applicants for the mortgage loans ... to ask about the details of those outstanding mortgages. Once they know there is an X number of outstanding mortgages, they can look further into the details from the [actual] applicants.'
The Office of the Privacy Commissioner for Personal Data is holding a five-week public consultation, ending on February 8, to explore the privacy implications of the proposed changes to the Code of Practice on Consumer Credit Data.
Chiang said they sought to get views on whether the changes were necessary or excessive in terms of safeguarding personal data privacy.
The proposals include sharing negative information for non- residential loans, such as commercial and industrial mortgages. Shell companies that hold mortgaged properties are included.
If the privacy office has no objections, work on implementing the proposals is expected to finish by the end of March. After that, lenders want to be able to access the additional data immediately for assessing loan applications and, after 24 months, to review the general credit portfolios of their applicants.
Positive residential mortgage data, unlike negative information such as defaults and late payments that reflect badly on a person's credit rating, is not included in Hong Kong's credit database. It was withdrawn by the banking industry during consultation with the privacy commissioner in 2002. Including such information in the scope of data sharing would allow lenders access to a wider range of data on a person's credit history, whether good or bad.
The existing centralised credit database, managed by an agency called TransUnion, collects personal details including names and addresses of bank account holders, in addition to credit account opening dates, repayment terms, approved loan terms and past-due credit. Authorised lenders such as banks can order a credit report to assess a person's financial health. In the US, some employers require job applicants to submit a personal credit report. The Hong Kong Association of Banks considered the proposals 'very minimal information compared with other positive mortgage data-sharing regimes such as the UK, US, Canada, mainland China and Singapore'.
