While last year's plans still prescribed creating the long-awaited positive credit register by 2024, it has now become clear this will not happen before 2025. At the same time, debt execution proceedings keep mounting.
The Ministry of Finance's so-called positive credit register should give creditors an overview of a customer's arrears in all financial institutions, which is hoped to reduce people borrowing themselves bust.
If last summer, the ministry hoped to complete the data exchange platform by 2024, Thomas Auväärt, deputy head of the ministry's financial services unit, now told ERR that this will not be the case before 2025. He gave myriad consultations and fears as the reason.
"First, there is this notion that the register would only cater to banks in helping them find new loan customers. Secondly, it is feared that the data will leak from the register," he explained. To alleviate these and other fears, the ministry held a tender for research to determine the best way to handle such a register, Auväärt said, adding that a service provider should be picked in the near future.
The Finance Ministry wants to have the results by early 2024 at the latest, which could allow the parliament to process and pass the corresponding bill next year.
"The register itself could become operational in 2025 at the earliest," Auväärt said. "This shift in deadlines is caused by different views among participants, which is why we are aiming for a compromise," he explained.
Auväärt added that the ministry wants smaller credit providers to join and for the service not to be too expensive.
Bailiff: Small creditors' responsibility should grow
Bailiff Risto Sepp said that the register is necessary and would almost constitute a silver bullet.
"Looking at debts in execution proceedings, we saw growth of 6 percent from 2021 to 2022, which perhaps is not too frightening. But if we look at payment order requests filed with courts – a tool for enforcing the payment of claims of up to €8,000 in court without the involvement of a lawyer – there growth has been faster than previously," he pointed out.
Sepp explained that the increase is 25 percent for the first three months year over year, meaning that the annual growth of such claims is no longer 6 percent but likely closer to 15 percent.
The bailiff gave an example of a 55-year-old man with two existing loans who lives with his mother and took out another loan to replace his windows. By now, he has landed on the bailiff's plate with ten small loans many of which were taken to help service existing obligations. At the same time, debtors are shown ads encouraging them to take out new loans when they visit the creditor's website.
"We need to reach the people most affected. The small consumer with fast credit loans," Sepp said of the register.
The bailiff added that small creditors' responsibility to make sure whether customers have existing bad loans should grow.
Putting together the execution proceedings register or debt register, payment default register and the positive credit register would result in a very useful combination, Sepp suggested.
Editor: Marcus Turovski