Brazil banks get early antitrust approval for credit bureau (updated)

Banco Bradesco

05/09/2016 21:48

(Adds comments from Febraban in fourth and fifth paragraphs) 
    SAO PAULO, Sept 5 (Reuters) - Brazil's antitrust authority, 
Cade, has preliminarily  recommended approval of a credit 
research bureau sponsored by Brazil's largest banks that would 
gather information on the bill-paying history of consumers and 
companies, with the aim of bringing down default rates and the 
cost of credit, the agency said on Monday.  
    The recommendation to approve the venture, called Gestora de 
Inteligência de Crédito (GIC), now needs to be confirmed by 
Cade's tribunal, the statement said, without giving a date for a 
final decision. Approval will hinge on the parties signing a 
control agreement, known as an ACC, Cade said.  
    Boa Vista Serviços SA, as well as the local units of 
Experian Plc  EXPN.L  and Fair Isaac Corp (FICO)  FICO.N , are 
the largest providers of borrower quality information in Brazil. 
    "The Brazilian banks are and will continue to be clients of 
existing credit research companies," said banking industry group 
Febraban in a statement sent to Reuters.  
    To win Cade's approval, the banks involved in the creation 
of GIC guaranteed "not to discriminate against competing credit 
bureaus in the access of credit information," Febraban said in 
the statement. Cade and the banks also agreed "to avoid the 
exchange of certain information through the joint venture" to 
comply with antitrust rules.   
    Last January, state-controlled Banco do Brasil SA  BBAS3.SA  
and Caixa Econômica Federal  CEF.UL  teamed with private-sector 
banks Itaú Unibanco Holding SA  ITUB4.SA , Banco Bradesco SA 
 BBDC4.SA  and Banco Santander Brasil SA  SANB11.SA  to create 
the research unit. Each of the banks will take a 20 percent 
stake in the joint venture. urn:newsml:reuters.com:*:nL2N1550KP 
    The use of a credit-scoring company that rewards prompt 
payers is seen by policymakers and bankers as a way to help 
bring down credit costs amid rising defaults in Brazil's 
harshest recession in the past 80 years. 
    With Brazil's benchmark interest rate holding at 14.25 
percent since July 2015, consumers in the country face the 
highest borrowing costs among the world's major economies. 
    Typically, credit scoring companies obtain data from the 
country's banks on borrowers' behavior and estimated demand for 
consumer and corporate credit. 
 
 (Reporting by Ana Mano; Editing by Bill Trott) 
 ((Ana.mano@thomsonreuters.com; +55-11-5644-7704;)) 
 
Keywords: BANKS BRAZIL/ANTITRUST