Change in corporate credit legislation could make getting certain information more difficult
|
|
A long-awaited reform in Finnish credit information legislation could lead to considerable changes in what kind of personal information can be used in assessing a company’s creditworthiness. A working group is proposing that bad credit on the part of individuals in responsible positions in a company could no longer be taken into consideration in such cases.
Proposals have also been put forward to reduce the time frame in which credit information is recorded, and to narrow the group of people to be examined in the assessment of creditworthiness.
The aim of the proposed changes would be to prevent a past bankruptcy by the owner of a small company from being an insurmountable obstacle to future business activities.
However, critics of the proposed changes say that this could also make it too easy for dishonest entrepreneurs to stay in business, thereby increasing the risk of credit losses and economic crime.
The chairwoman of the working group, Anna-Riitta Wallin, does not want to give details on the upcoming proposal.
"The proposal does not mean that there would be no access at all to information on people in charge. The question is only over what kinds of situations that information can be used in", she says.
Under the present law, credit information can be used in connection with granting credit, or monitoring its use, in addition to "other similar purposes".
"That definition is quite vague. It will be made more precise, but I do not know how", Wallin explains.
She also said that the aim of the legislation will not be to decide how customers are to be chosen.
Wallin feels that it is unreasonable for the solvency problems of some deputy member to have a long-term effect on the classification of a company, even if that company has been scrupulous about its payments for years.
Ari Hyytinen, the head of research at Etlatieto, a research and information services subsidiary of the Research Institute of the Finnish Economy (ETLA), notes that there is always an element of risk in granting credit to a company, and that the magnitude of the risk depends on the customer and his or her background.
Hyytinen adds that no good reasons have been put forward as to why there should be limits in the use of the credit records of people in charge in assessing the trustworthiness of the company in question.
He warns that unnecessary restrictions would probably make it harder for companies whose key persons have truly spotless records from distinguishing themselves from those whose records might indicate some problems.
Helsingin Sanomat
|
| 3.11.2004 - TODAY |
 Change in corporate credit legislation could make getting certain information more difficult |
|
