by Tim Waghorn , James Griffin January-14-2025 in Banking & Financial Services
The Central Bank of Ireland (“CBI”) has announced that, in circumstances where a qualifying credit agreement and supporting guarantee is entered into on or after 1 February 2025, relevant credit providers will be required to submit personal and credit information on both the guarantor(s) and their guarantee(s) (including, but not limited to, all sums guarantees) to the Central Credit Register (“CCR”).
This requirement is introduced under the Credit Reporting Act 2013 (“CRA”) and The Credit Reporting Act 2013 (Section 11) (Provision of Information for Central Credit Register) Regulations 2016 (“Section 11 Regulations”) which grant the CBI the power to phase in the implementation of reporting requirements under the CRA. This phased power was used to introduce the reporting of personal and credit information for consumer and non-consumer loans/credit from 2017 and 2018 respectively. Pursuant to the Section 11 Regulations the CBI is now implementing reporting obligations in respect of applicable guarantees and guarantors.
Background
The CRA implemented the CCR which is operated by the CBI and is a database that stores personal and credit information on credit agreements of value exceeding €500. The CRA aims to, amongst other things, increase financial stability by assisting creditors in making lending decisions and protecting borrowers and guarantors from incurring excessive debt.
The CRA has a very broad scope and applies to an extensive range of individuals and entities. Its definition of credit includes a loan, deferred payment or other form of financial accommodation. It defines a credit applicant, borrower or guarantor as a “credit information subject” (“CIS”) and relevant credit providers as “credit information providers” (“CIP”).
Reporting requirements
As from 1 February 2025 CIPs must now report the same subject information for the guarantor of a qualifying credit agreement as they would for the borrower of that agreement. In the event that the guarantor is not an existing customer of that CIP, the CIP must create a unique customer number for them in order to report to the CCR. In addition, the CIP must report on the type of guarantee to the CCR.
CIPs should also be aware that the requirements extend to a further onus on the relevant CIP to report to the CCR when a guarantee has been called in/relied upon. However, there is no mandatory reporting obligation if a CIP issues legal proceedings against a guarantor.
The reportable information must be in accordance with the CBI guidelines, the latest version of which have been updated by the CBI to clarify guarantee and guarantor reporting and can be accessed at https://www.centralcreditregister.ie/media/1783/ccr_guidance_v26.pdf
Access to information on guarantees and guarantors
In accordance with S.15 of the CRA, a CIP has the power, but not a duty, to access information from the CCR in respect of a guarantor in circumstances where the guarantor offers to provide a guarantee in connection with a qualifying credit application of value exceeding €500. This power extends to circumstances where there is a request to change the nature of the guarantee or where the guarantor has breached the terms under the guarantee. The CRA imposes limits on how the information provided may be used.
Impact of changes
CIPs will need to bear in mind their obligations are being extended and take account of the additional admin requirements/responsibilities from 1 February 2025.
From a documentary perspective the requirement under the CRA to keep CISs aware of their rights now extends to guarantors and therefore warning notices will need to be updated/included on guarantees informing them that relevant information may be reported to the CCR.
Guarantors will need to be aware that relevant credit providers will have the ability to obtain information on in scope guarantees which have been entered into with other third party credit providers to assess their creditworthiness.
Back to Full News
Share this article:
About the Authors
Tim Waghorn
Tim is a Partner in the Banking and Financial Services team at Hayes solicitors. Tim has extensive experience advising both borrowers and lenders across a wide range of financing transactions including corporate debt facilities, complex cross-border financings, export-credit backed lending and leveraged/acquisition finance.
James Griffin
James is a solicitor in the Banking and Financial Services team at Hayes solicitors. James advises a variety of domestic and international corporates, lending institutions, SME’s and high net worth individuals on a range of finance transactions including acquisition finance, development finance, real estate investment finance and receivables finance.