The Law on Credit Histories contains all the basic provisions regarding the functioning of bureaus specializing in loans, financial catalogs, special government agencies and many other elements that make up the credit system. The content of the Federal Law on Credit Histories will be discussed in detail in this article.
Objectives of the Federal Law
218- βOn credit historiesβ enshrines the concept and composition of credit history, the process of its formation, use and storage. The main objectives of the Law are to maintain the efficient operation of credit-type organizations, as well as to increase the level of protection of borrowers and lenders by reducing credit risks. Among other things, Federal Law No. 218- "On Credit Histories" calls the creation and development of conditions for the analysis and storage of credit histories provided by specialized bureaus as goals.
What relations does the Federal Law on Credit Histories govern? Here it is worth highlighting:
- relations between borrowers and lenders;
- relations between executive authorities and the state credit bureau;
- relations between individuals and the Central Credit Directory.
We should also talk about the concepts used in this normative act.
The concepts
The first and probably the most important concept is credit history. Federal law characterizes it as special information, the content of which is determined by special rules and which is stored in a special bureau.
The following concept is a loan agreement. The law in this case states a document containing the conditions of the loan. Here it is worth highlighting the concept of a credit report - a document containing information about the credit history stored in the bureau.
Sources of the formation of credit histories are creditor organizations, which, under a loan agreement, have the right to deduct money from debtors for improper performance of their duties. The subject of credit histories is always an individual or legal entity acting as a borrower, guarantor or principal.
The credit bureau is a legal entity of a commercial type. It is able to provide services for building and processing credit histories and, among other things, providing loan reports. The credit directory is the unit that maintains a database for searching credit bureaus.
What conclusion can be drawn here? All the concepts presented speak about one thing: the credit system is an incredibly wide and voluminous sphere containing a huge number of different branches and areas.
About credit history
The most important element in the credit system is the credit history. According to the Federal Law No. 218, this is a document consisting of the title part, information block and conclusion. Credit history contains all the basic information about the subject of history. This is a surname and first name, passport details, TIN, insurance data, etc.
The Law on Credit Histories enshrines the complete process of submitting information to the appropriate bureau. The concept of subject code is introduced. The procedure for the transfer and identification of this code is strictly regulated in Article 5 of the Federal Law "On Credit Histories". The responsibilities of the credit bureau include the storage of all necessary information for 10 years.
Rights of subjects of history
The law establishes the fundamental rights of subjects of credit histories. The subject, for example, has the right to receive information in the Central Catalog about where his loan history is located. In any bureau where the story is located, the subject is able to receive credit reports. In whole or in part, the subject is able to dispute the information contained in the loan history.
To do this, you must submit the appropriate application to credit bureaus. The bureau itself must provide an answer after a monthly audit. What can contain the answer? There are two options: either updating the story, or canceling it. Moreover, the bureau itself is not obliged to conduct further checks of the disputed information. The subject is able to appeal against the actions of the bureau in a judicial proceeding.
Bureau Rights
What are the legal possibilities of credit bureaus?
The Law on Credit Histories enshrines the following provisions in Section 9:
- The right to provide reporting services in the manner prescribed by law.
- The ability to engage in the provision of services related to the development of evaluation methods for calculating the ratings of principals and their use. Development should be based on information contained in the credit history.
- The right to create associations and unions to protect the rights and interests of its members. Coordination of activities, satisfaction of scientific, informational, professional and any other interests - all this can be effectively implemented as part of the association.
- The right to request special information from state authorities, local authorities, the Russian Bank, various kinds of extra-budgetary funds, etc.
And what responsibilities does the bureau have? This will be described later.
Credit Bureau Responsibilities
According to the Federal Law "On Credit Histories", the state bureau is obliged to qualitatively carry out the following types of functions:
- Providing information from the front pages of credit histories to the Central Catalog.
- Notification to the Central Catalog of information about the cancellation of a particular credit history - in accordance with the procedure and forms established by the Bank of Russia.
- Providing free of charge to the source of the history of the opportunity to amend the information contained in the credit history.
- Obligation to have and periodically use a license for technical protection of confidential information.
- Issuing a credit report to each holder of a credit history.
- Inclusion of the amended information in the credit history of the respective entity.
Thus, any credit bureau has a fairly wide range of powers and responsibilities.
Bureau reorganization and liquidation processes
The process of removing a particular credit institution is enshrined in Article 11 of the Federal Law "On Credit Histories". The bureau, according to this article, can only be liquidated in the manner prescribed by law. For the entire period of liquidation work, the organization ceases to receive and process information from relevant sources and entities. Within three days from the receipt of the notice of the need for liquidation, the bureau notifies all credit sources about this, places the relevant information in print media - national and local (at the location of the liquidation).
In the situation with the reorganization, all necessary work processes will be absolutely identical. The only difference is that upon liquidation, the bureau has the right to conduct wide tenders related to the sale of existing property.
About the central catalog
Finally, it is worth talking about the functioning of the Central Credit Catalog of the Russian Federation. This instance is being created by the Bank of Russia. The purpose of the catalog is to collect, store and provide information to the credit history entities and users of the relevant credit history bureaus.
The catalog is engaged in the storage of information that makes up the title parts of each credit history maintained by credit bureaus. The most important function of the Central Catalog is to provide information on credit bureaus. Information can be requested by notaries, users and subjects of credit history, lawyers, auditors and some other groups of persons.
About state supervision
07/23/2013 amendments were made to the law on credit histories. Thus, Article 14 of the bill under consideration now states that the state supervision and control over the activities of credit bureaus is carried out by the Bank of Russia in strict accordance with the laws.
What functions does the Bank of Russia perform? This is what the law enshrines:
- work with the state registry of credit bureaus in the manner established by the Bank of Russia;
- establishing requirements for the financial position and professional reputation of all participants in credit bureaus;
- conducting checks to ensure that the relevant bureaus comply with federal law requirements;
- sending instructions to the bureau to eliminate violations in a particular area;
- the implementation of other functions and duties stipulated by the legislation of the Russian Federation.
The law prescribes a rule according to which any decision of the Bank of Russia can be appealed in court.