Press Release
October 31, 2008

CISA SIGNED INTO LAW

The Credit Information System Act (CISA), which will gather credit information from financial institutions such as banks, credit card companies, and government lending institutions, was signed into law today by Malacanang.

"This is a major step towards unlocking money because lenders will be better able to assess their risk through comprehensive and credible information on the credit history of their borrowers," said Angara, who chairs the Senate Committee on Banks, Financial Institutions and Currencies.

Angara, who authored and sponsored the bill in the Senate, said it will provide for easier access to credit by small businesses, as well as better risk assessment for lenders.

"It will make credit more available, especially to small yet responsible borrowers, as their good track record in paying their obligations will be made known to the financial institutions," Angara said.

He added, "Not only will it lower the cost of credit and reduce the reliance on physical collateral to secure credit, but it will also give lending institutions access to reliable credit information to help them manage credit risks better."

CISA ensures consumer protection and confidentiality as it will only release information to duly accredited accessing entities.

The establishment of a Credit Information System will set the standards for credit reporting operations that will improve not only the ability of creditors to assess risk and allocate credit more efficiently, but will also promote the protection of the rights of consumers against irresponsible use or erroneous reporting of credit information.

"CISA will remedy the lack of comprehensive and credible credit-related information. Lenders will no longer have to gather vast amounts of information, which is both difficult and costly, in order to assess a person's creditworthiness. This will lessen lenders' exposure to excessive and unnecessary credit risk," he said.

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