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33 J. Consumer Pol'y 1 (2010)

handle is hein.journals/jrncpy33 and id is 1 raw text is: J Consum Policy (2010) 33:1 27 DOI 10.1007/s10603-009-9120-y ORIGI\N1 PAPE A European Perspective on Consumer Loans and the Role of Credit Registries: the Need to Reconcile Data Protection, Risk Management, Efficiency, Over-indebtedness, and a Better Prudential Supervision of the Financial System Federico Ferretti Received: 21 August 2009 /Accepted: 14 December 2009 / Published online: 13 January 2010 C Springer Science+Business Media, LLC. 2010 Abstract The paper examines the role of credit registries in the context of European consumer credit markets and the current policies of the EU in this area. It attempts to show the institutional challenges relating to some competing rights or interests amongst consumers and financial institutions and the need for a strengthened prudential supervision of the financial system as evidenced by the recent crisis whose effects have spread into the global economy. In particular, it shows that there is a conflict between the right to data protection of consumers, the risk management interests of lenders, and the prudential supervision of the credit system. The ultimate goal, thus, is to present some weaknesses of the current arrangements and to put forward a proposal that is probably controversial but that is intended to stimulate a debate from an alternative policy perspective that is wider than the current one. Keywords Consumer credit - Credit data - Institutions - Data protection- Over-indebtedness Introduction Consumer credit reporting has become the instrument most extensively used by lenders to underwrite decisions on borrowings or the supply of goods and/or services to consumer customers. Lenders, in fact, access credit reference databases managed by third-party providers (credit registries) in order to evaluate a consumer's credit application and his or her creditworthiness. They provide to the credit industry and the market organized information on the performance of consumer borrowers, gathering information on their payment history and accounts and issuing a credit report prior to the underwriting of a loan or the supply of goods and/or services. F. Ferretti (E) Brunel Law School, Brunel University, London, UK e-mail: federico.ferretti(albrunel.ac.uk 4_ Springer

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