Once the register planned by the Ministry of Finance is up and running, the loan application process for individuals will look like this: first, a bank, for example, will make a query to the credit information register to find out how much the person currently owes on loans, leases, installment payments or other debts to credit institutions. If the financial picture appears positive to the bank and it seems the person is capable of taking on additional debt, the loan will be granted and all the relevant information will be recorded in the register. If the picture is less favorable, that information is immediately accessible in the register, helping prevent banks from taking on the risk of lending to someone who is already heavily indebted.

Therefore, the new register must include all amounts individuals have borrowed from credit providers that hold a license from the Financial Supervision Authority. The only exception is savings and loan associations, which do not require such a license but are still obligated to submit data to the register. The goal of creating this kind of database is to reduce over-indebtedness, said Mirjam Rannula, one of the bill's drafters and an adviser in the Ministry of Finance's financial services policy department.

"The main principle behind this bill is to ensure that credit providers evaluating a person's creditworthiness have a reliable overview of the various financial obligations that person has taken on," Rannula said. "Because this information is not easily accessible to lenders today, we have a significant number of people who can no longer repay their loans and have fallen into debt bondage."

Rannula emphasized that not all loans will be included in the register — if the lender is a private individual, for example, that information will not be entered into the system.

State will not manage the register

The credit information register will be maintained by a private company. The Ministry of Finance will organize a procurement process to select the operator once the credit information sharing law has been approved. According to Rannula, the approach mirrors that of the pension register, which is also managed by a private enterprise.

"This allows the state to save money in some respects," Rannula said. "The register operator will charge a service fee to those making inquiries, and the maintenance costs of the register will be covered by those fees. Given the scale of the task, we concluded that it would be more practical to delegate it."

Still, questions arise about how to ensure the data in the register doesn't accidentally become public or fall into the wrong hands — or that employees don't snoop out of personal curiosity.

"This is a data collection system that's part of the national information system, meaning it is subject to the standard rules and requirements that apply to state data systems," Rannula explained. "When we conduct the procurement, we are legally required to ensure that the operator is a trustworthy entity, and all the current legal requirements for managing state data systems will apply to this one as well."

The bill in question sets out heightened requirements for the company managing the register — similar to those for businesses in the financial sector. In addition, the operator will be supervised by both the Financial Supervision Authority and the Data Protection Inspectorate, with the Ministry of Finance also conducting oversight.

Every inquiry made about an individual will also leave a trace in the register, and each person will be able to see both the information held about them and who has accessed it.

People will also have the option to place a loan ban on themselves through the register, Rannula said.

"There will be a loan ban list, and only individuals can apply to place themselves on it. The ban will be valid automatically for six months, after which a person can remove themselves from the list. We've modeled this after gambling self-exclusion regulations and taken into account market feedback, which suggests the idea resonates with many."

Cost of using the register could come to €1.6 per query

According to the explanatory memorandum for the Credit Information Sharing Act, the estimated cost of developing the register ranges from €850,000 to €1.7 million, depending on the technology used. The annual maintenance cost of the register is expected to be between €100,000 and €200,000. An analysis commissioned by the Ministry of Finance and conducted by Cybernetica found that the register operator would be able to recoup these expenses within three years. Cybernetica also estimated that the cost of a single query to the register could be around €1.60.

Banks, leasing companies, installment service providers, savings and loan associations, crowdfunding platforms and other small loan providers will all be required to submit data to the credit information register. To ensure the reliability of the information, every new loan or contract amendment must be entered into the register within 24 hours. This means data exchange must be automated, requiring those institutions to develop appropriate IT systems as well.

The explanatory memorandum estimates that the cost for credit providers to join the system will range from €200 to €2,000, depending on the volume of queries. The annual operating cost is expected to be no more than €200. However, in a study conducted seven years ago, credit providers themselves estimated that, based on workload and time demands, the cost could be as high as €10,000.

Mirjam Rannula emphasized that it's crucial for credit providers' technical systems to be compatible with the register. "The technical parameters must be suitable for market participants so we don't run into problems where a credit provider's system for sending or making queries is incompatible with the register's platform. That work is ongoing in collaboration with stakeholders," she said.

Under the current plan, credit data will begin to be transferred to the register in the fall of 2027 and the system is expected to be fully operational by June 2028. This timeline allows for the duration of the procurement process and gives all market participants time to implement compatible technical solutions.

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