Section 4October 31, 2008, Sec./Art. 4

Establishment of the Credit Information System. - In furtherance of the policy set forth in Section 2 of this Act, a credit information system is hereby established.

(a) Banks, quasi-banks, their subsidiaries and affiliates, life insurance companies, credit card companies and other entities that provide credit facilities are required to submit basic credit data and updates thereon on a regular basis to the Corporation.

(b) The Corporation may include other credit providers to be subject to compulsory participation: Provided, That all other entities qualified to be submitting entities may participate subject to their acceptance by the Corporation: Provided, further, That, in all cases, participation under the system shall be in accordance with such standards and rules that the SEC in coordination with the relevant government agencies my prescribe.

(c) Participating submitting entities are required to submit to the Corporation any negative and positive credit information that tends to update and/or correct the credit status of borrowers. The Corporation shall fix the time interval for such submission: Provided, That such interval shall not be less than fifteen (15) working days but not more than thirty (30) working days.

(d) The Corporation should regularly collect basic credit data of borrowers at least on a quarterly basis to correct/update the basic credit data of said borrowers.

(e) The Corporation may also access credit and other relevant information from government offices, judicial and administrative tribunals, prosecutorial agencies and other related offices, as well as pension plans administered by the government.

(f) Each submitting entity shall notify its borrowers of the formers obligation to submit basic credit data to the Corporation and the disclosure thereof to the Corporation, subject to the provisions of this Act and the implementing rules and regulations.

(g) The Corporation is in turn authorized to release consolidated basic credit data on the borrower, subject to the provisions of Section 6 of this Act.

(h) The negative information on the borrower as contained in the credit history files of borrowers should stay in the database of the Corporation unless sooner corrected, for not more than three (3) years from and after the date when the negative credit information was rectified through payment or liquidation of the debt, or through settlement of debts through compromise agreements or court decisions that exculpate the borrower from liability. Negative information shall be corrected and updated within fifteen (15) days from the time of payment, liquidation or settlement of debts.

(i) Special Accessing Entities shall be accredited by the Corporation in accordance with such standards and rules as the SEC in coordination with the relevant government agencies, may prescribe.

(j) Special accessing entities shall be entitled access to the Corporations pool of consolidated basic credit data, subject to the provisions of Section s 6 and 7 of this Act and related implementing rules and regulations.

(k) Special accessing entities are prohibited from releasing basic credit data received from the Corporation or credit reports and credit ratings derived from the basic credit data received from the Corporation, to non-accessing entities unless the written consent or authorization has been obtained from the Borrower: Provided, however, That in case the borrower is a local government unit (LGU) or its subsidiary or affiliate, the special accessing entity may release credit information on the LGU, its subsidiary or affiliate upon written request and payment of reasonable fees by a constituent of the concerned LGU.

(l) Outsource Entities, which may process and consolidate basic credit data, are absolutely prohibited from releasing such data received from the Corporation other than to the Corporation itself.

(m) Accessing Entities shall hold strictly confidential any credit information they receive from the Corporation.

(n) The borrower has the right to know the causes of refusal of the application for credit facilities or services from a financial institution that uses basic credit data as basis or ground for such a refusal.

(o) The borrower, for a reasonable fee, shall have, as a matter of right, ready and immediate access to the credit information pertinent to the borrower. In case of erroneous, incomplete or misleading credit information, the subject borrower shall have the right to dispute the erroneous, incomplete, outdated or misleading credit information before the Corporation. The Corporation shall investigate and verify the disputed information within five (5) working days from receipt of the complaint. If its accuracy cannot be verified and cannot be proven, the disputed information shall be deleted.

The borrower and the accessing entities and special accessing entities who have received such information shall be informed of the corresponding correction or removal within five (5) working days. The Corporation should use a simplified dispute resolution process to fast track the settlement/resolution of disputed credit information. Denial of these borrowers rights, without justifiable reason, shall entitle the borrower to indemnity.