TRO Petition against CIC junks by Baguio Court

MANILA, 06 July 2017 – Temporary Restraining Order (TRO) filed by Northern Luzon Federation of Cooperatives and Development Center (NORLU CEDEC) against CIC's credit data collection was junked by the Baguio City Regional Trial Court (RTC) last 28 June 2017.

 

No autonomy violated

The RTC ruled that CIC did not violate the autonomy of cooperatives in mandating them to submit basic credit data of their members.

Under the Republic Act No. 9510 or Credit Information Systems Act (CISA), the banks, quasi-banks, their subsidiaries and affiliates, life insurance companies and other companies that offer credit facilities, including cooperatives, are mandated to submit credit data of their borrowers to CIC.

Even as the cooperatives will submit their credit data to the CIC, they will still autonomous, thus free to chart and govern their own business operation. The court stated that cooperatives will not be exempted in the application of laws and that other financing companies are also required to submit their borrowers' credit data.

 

Long-term benefits for Cooperatives

CIC President and CEO Jaime P. Garchitorena stated that cooperatives' inclusion in submission data will fuel in economic progress for cooperatives are as vital as banks and other large financial institutions.

He also added that their participation in submission will lead to access to quality financial products, encouraging people to lend more while gradually minimizing non-performing loans and fraud. Mr. Garchitorena also said that CIC is looking forward to a long and fruitful partnership with all cooperatives, including NORLU CEDEC.

 

Credit Report Generation

The cooperatives may generate credit reports of their new and existing members to assess their creditworthiness and provide better interest rates and credit terms. Through Credit Information System (CIS), it is expected that improvement in access to credit will be experienced by micro, small and medium enterprises (MSMEs).

Credit report generation is expected to be utilized for loan evaluation purposes by 2018.

 

Source: ASEAN LIP