SINGAPORE — The Monetary Authority of Singapore (MAS) yesterday proposed a new Credit Bureau Act (CBA) that would require credit bureaus in Singapore to be licensed and enhance the protection of consumers’ credit information.

Credit bureaus collect, use and disclose the credit information of borrowers to their members — banks, finance companies and credit card firms. These members use the information to facilitate credit assessments and loan underwriting decisions.

There are currently two credit bureaus in the Republic — Credit Bureau (Singapore) and DP Credit Bureau.

“As the credit bureaus collect increasing and more detailed borrower credit information, it would be prudent to subject them to more formal supervisory oversight by the MAS to ensure they take adequate measures to safeguard the confidentiality, security and integrity of sensitive borrower credit information and protect consumers’ interests,” said the central bank yesterday in the new Act’s consultation paper.

Under the proposed CBA, the MAS will be given the power to issue, renew or revoke credit bureaus’ licences, which will be valid for five years.

A framework will be put in place to detail the obligations on licensed credit bureaus to ensure data security and confidentiality as well as ease of data access.

One of the CBA’s key provisions is a requirement for these licensed credit bureaus to provide a consumer with a free credit report after approving or rejecting a credit application, said the MAS.

To ensure proper corporate governance, the Act will empower the MAS to approve the appointment and removal of board directors and the chief executive officer of a licensed credit bureau.

Credit Bureau (Singapore) welcomed the proposal, saying the regulatory oversight would boost consumer confidence in it.

The CBA’s consultation paper is available on the MAS website and the members of the public should email their comments to the MAS by Sept 12. Wong Wei Han