FLA greets banks’ data sharing announcement with caution

30 March 2006

FLA gave a qualified welcome to the announcement by four of the high street banks that they will share certain data about customers’ income with Callcredit, a credit reference agency. Director General of the Finance & Leasing Association (FLA), Martin Hall, said:

“Naturally we welcome any initiatives that help to prevent or reduce over-indebtedness. We recognise that, to get a project of this scope off the ground, initial participants need to be limited in number. We are partly reassured that the “live pilot” scheme is open to other lenders. On a basis of strict reciprocity, lenders who submit data on income declared in loan applications will be able to share such data from other participants in the scheme, and thus have further evidence for judging whether the credit sought is affordable.

We shall however continue to press for relevant current account data also to be shared with lenders who do not offer current accounts, strictly for responsible lending purposes and safeguards the banks are entitled to expect. This would give a far greater degree of certainty. Our members do not see preventing over-indebtedness as a competitive issue.”