knowledge 3 September 2019 |

Credit Reporting:  Identity Verification Simplified

Identity verification processes have just been made a little easier for lenders and other “credit information providers” (“CIPs”) who are subject to Ireland’s credit reporting regime. 

The existing “Section 20 Regulations”1 outline the steps that a CIP is required to take to verify the identity of borrowers and other “credit information subjects” (“CIS”).  The purpose of the Section 20 Regulations is to ensure that the information reported to the Central Credit Register is reliable and accurate.  While this is clearly important, the specific requirements set out in the original Section 20 Regulations did not necessarily take account of other verification obligations that the CIP already had, most notably under anti-money laundering legislation.  Arguably, this created unnecessary complexity and administrative burden for CIPs.

The Section 20 Regulations have now been amended (by statutory instrument 433/2019; available here) so that:

  1. Alternative Verification Process:  a CIP is no longer required to meet the verification requirements set out in Parts 1, 2 or 3 of the Section 20 Regulations if either:
  • AML:  the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 applies to it and it has verified the identity of the CIS pursuant to the requirements of that Act; or
  • Other:  the CIP has complied with “…any other reasonable and reliable process to verify the identity of the credit information subject”.  If following this option, the CIP is required to record its process, including an explanation of the circumstances in which it is used, and is also required to keep verification documents for a 5 year period.
  1. Copy/Original:  for CIPs that continue to use the verification requirements in the Section 20 Regulations (rather than relying on one of the alternative verification processes mentioned above), those requirements are now amended so that it is clear that the CIP can use copies of verification documents (rather than having to use originals).

These pragmatic amendments to the Section 20 Regulations should streamline identity verification processes for many CIPs and will surely be a welcome development.

  1. SI 488/2016.

This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.