Check the current indebtedness
The positive file is used to check the current indebtedness of a credit applicant. This allows financial institutions not to give credit to people who are already too indebted.
A positive file would prevent many people from facing Justice
- Credit Act
- The positive file or the central borrower file
- Make credit easier to obtain
- National Credits Registry Project
- Positive file rejection
Given the magnitude of over-indebtedness in a context of economic crisis, where households are finding it increasingly difficult to repay their loans, the Ministry of the Economy decided in 2010 to adopt new rules for granting credit, an act that tries to protect consumers.
New credit rules
The main measures of the reform, as we can read them on the website of the Ministry of Economy, with my little translation below:
- Loyalty cards: prohibition of conditioning commercial benefits on the use on credit of loyalty cards and payment cards, the credit function of which can no longer be used without the consumer having given his express agreement.
In short: we will no longer have to use the cash reserve associated with the department store loyalty card. Few stores did it (I do not know, personally): people would not have been loyal.
- Advertising: prohibition of ambiguous mentions and introduction of a compulsory legal notice on all advertisements “a credit commits you and must be refunded. Check your repayment capacity before you commit ”
Clearly: as for cigarettes, you are reminded to be careful before making a credit.
Reform of advertising for credit
- Revolving credit: each revolving credit term must include a minimum amortization of the outstanding capital
Clearly: some revolving credits were so bad for the consumer that we could only repay the interest, loop: the credit was never cleared. Now, whatever happens, the revolving credits will be settled sooner or later.
- Responsible credit: strengthen the obligations of lenders, particularly at the point of sale, with the creation of a duty of explanation and a solvency verification obligation.
In short: the nice borrower will have to tell you that you must be careful before making a loan, and check that you can repay.
- Credit buybacks: definition of specific rules applicable to credit buyback operations
In short: we will have to wait to know the content of these “specific rules”.
- Withdrawal period: increased from 7 to 14 days
In short, you now have 14 days to change your mind.
- Banking Commission: control of the marketing of credits.
Clearly: credit agencies will be controlled by a bank commission, which will verify the legality of credit offers.
- Reform of the borrower insurance: more transparency on the cost and competition on the offer.
In short: you will have better information on the price of insurance that you can take for a credit. For example, we will tell you how much in euros and per month the insurance offered to you.
- Over-indebtedness commissions: 3 months instead of 6 to decide on the admissibility of the over-indebtedness files, decision of rescheduling and cancellation of interest by the commissions
In short: the over-indebtedness commissions will be more efficient and faster. One of the most important novelties about over-indebtedness commissions is that now homeowners will also be able to use them. It was time, it would have been a shame to have to sell his house to pay his credits: housing is vital, and unless you have luxury housing, I find that it should not be taken into account in property to seize if it is necessary to repay a relatively small debt considering the price of an apartment: you find normal you, having to sell your home of 100 000 euros to repay a debt of 5000? No ? Neither do I.
- Payment incident file: modernization of the operation of the file and reduction of the registration period to facilitate the rebound of persons experiencing debt difficulties
Clearly: payment incident files will be updated more often (we hear about a daily update, against 3 months currently). In addition, the file will take less time: 5 years now, against the current 8 to 10 years.
All these measures seem to me very little in the face of the scale of the problem. One of the most significant measures, the “positive file”, in which are registered all your credits in course, is under study of feasibility. It would make the payment incident files obsolete.
Less time for posting in Bank of France to make a credit in Belgium
The consumer credit reform bill prepared the establishment of such a file, a central credit to individuals, placed under the responsibility of the Bank of France. A study was conducted, which lasted 3 years from the promulgation of the Law. It was, I think, quite slow, especially at the speed of things. senator of the PS of Seine-et-Marne and vice president of the finance committee of the Senate at the time proposed the creation of this file, but especially a ” social credit “, open to families generally excluded from the credit, for amounts up to 3000 euros. The positive file, giving banks the assurance that you can effectively repay your loans, makes it easy to grant loans: microcredit becomes possible!
What is certain is that there has never been unanimity on the creation of the central file, or even between banks. Some banks prefer the positive file, believing that it would protect them from the future bad payers, others are against, considering that it is a huge process which would complicate too much the granting of the credits. Others find that such a file is an attack on individual liberties and privacy, especially if the file can be used to receive aggressive advertising. We understand them somewhere, and that’s why we have to think about the central loan file.
Consumer association, is against the positive file, precisely because of the lack of privacy of our data: it gives access to the least credit institution to our salary, our income, our expenses, our credits, this which allows practically the whole Earth to file us in a box “consumer” and send him advertisements, to solicit him to buy this or that thing, this or that service. A hell for the consumer: because of a few people who have not had a chance in managing their finances, we plug the whole of France.
It is, in the state, exaggerated, and it must of course several safeguards for this does not happen. The Credums association, which assists households in bankruptcy, is of course for, but they only look at the problem through the prism of the indebted. The opinion of credit institutions is also shared: Cetelem is against, the Accord Bank is for.
Understandably, for the most vulnerable households, the Central Credit to Individuals, according to the terms of the Act, is something fundamental: it protects the poor, and allows them access to microcredit. On the other hand, for the majority of the French, this central file presents the risk, if it is badly done, of exposing the households to all imaginable abusive marketing campaigns.
Lower interest rates with the positive file?
As we can see, a “central risk file” or “positive file” has many advantages. There are companies and associations that have every interest in having such a file. First, foreign banks and other credit organizations: they would have access to a file that allows them to immediately target a credit applicant, and grant or not credit. French banks generally do not need the positive file: they have themselves created such files internally. Indeed, the French banking landscape is made up of very few banks, which have their hands on most financial institutions. It is easy for them to determine a profile of a credit applicant, not looking favorably at a file that would allow the competition to arrive on their preserve, France, with the immediate consequence interest rate, which would be profitable for everyone! Except of course the shareholders of major French banks, such as Crédit Agricole, BNP Paribas…
Read also: internal registration and refusal of credit
Proposal of the French Association of Bank Users (AFUB)
One solution, while waiting for the long-awaited arrival of the positive file, is proposed by the AFUB:
the banks, to check the solvency of a future customer, would now be obliged to request the “last three monthly statements of the bank account where are credited resources, wages and salaries of the user.” This obligation gives much more security to banks, and is a good intermediate solution. For larger loans, this is already the case in practice, even if we do not necessarily realize it, since the majority of real estate loans are made in our own bank, where we have our current account.
ADIE, to start a business
Employment center and microcredit
It is worth noting that Pôle emploi and ADIE will offer 10,000 personal microcredits for employment for the next three years. Experienced by the ADIE since 2006, with a maximum ceiling of 3000 euros, this microcredit can finance a driver’s license or the repair of a car for example.
All of these initiatives are therefore limited by the difficulty in determining the good faith and solvency of the credit applicant. ADIE also has a very normal interest rate, like a traditional bank: it’s not charity.
PlanetFinance is a microfinance company founded by the well-known Jacques Attali. It helps the various microfinance institutions around the world, providing microloans that allow the poor to access financial services. In 2007, PlanetFinance reached an agreement with Experian, to help each other to promote in the different countries where PlanetFinance works, the positive file. As we have seen, the positive file allows financial institutions to obtain reliable information on the credit applicants, allowing them to grant credit according to the profile of each.