Six years after the crash of our domestic banks, you might have thought that there would by now be a central repository with detailed information on credit data.

Somewhere that institutions could go to get up-to-date information on the amount of credit held by individuals and whether or not they were in good standing with their lenders.

An extensive database to ensure informed lending decisions are made and borrowers are protected from excessive debt. Yet no such register exists and it won’t be fully operational until 2017.

Fianna Fáil's finance spokesman Michael McGrath described this yesterday as "completely unacceptable" following a reply from the Minister for Finance, Michael Noonan, to a question he posed recently about the establishment of the new central credit register.

When the register is established, lenders will be obliged to report to the Central Bank credit information and personal information about loan applications and loan agreements that involve more than €500

Lenders will also be required to check the register before approving credit applications of more than €2,000 and they may also apply to check the register in cases involving less than this amount. The hope is that this leads to better lending decisions being made.

The initial phase of the register “will focus on the consumer credit market and is expected to become operational by mid-2016,” the Minister said. “A later phase will address commercial credit and is tentatively scheduled to be operational by end 2017.”

‘On track’

A spokeswoman for the Central Bank, which will have oversight for the

register, said the project is “on track” and has met all of its deadlines set down so far.

The establishment of the register has been in the offing for years. The need was highlighted in a number of reports, including those from the Law Reform Commission, the Expert Group on Mortgage Arrears, and the Central Bank itself.

It was also a measure included in our financial assistance programme with the EU and IMF.

David Hall of the Irish Mortgage Holders Organisation, which has helped some 5,500 people in arrears with their home loans, thinks a register would be a good idea.Having a central register of credit ratings would give some certainty to borrowers and allow them to correct any mistakes about their status, he said.

Hall wants the new register to recognise those who are on track with their restructuring plans as being in good standing with their lenders.

To date, the Irish Credit Bureau has been the only equivalent register available in Ireland but the general consensus is that it hasn’t been fit for purpose.

Set up in 1965, it is owned by a large number of banks and other credit institutions, but the problem over the years has been that some institutions didn’t bother registering certain credit agreements.

Hit and miss

Data on mortgage lending was particularly hit and miss. A couple of years ago, just for the heck of it, I applied to the bureau to see what credit information it held on me. The answer was zilch, in spite of the fact that I had a mortgage with one of the pillar banks.

In spite of its shortcomings, it was a handy cash cow for the banks, paying out just shy of €11 million in dividends between 2005 and 2007.

The Central Bank is currently out to tender to find an operator for the new register. It is unclear whether this group will begin its work from scratch or perhaps draw on the existing database held by the Irish Credit Bureau.

The bureau’s data might be patchy but it would be a good starting point for the register and would surely save some time and money.

The need for the central register is urgent. Demand for credit might still be muted compared with the boom years but lending is ticking up again – this year mortgage lending is expected to rise by about 50 per cent to €3 billion.

In the past, customers took out loans and credit cards from multiple institutions without the banks being able to run proper checks. This resulted in flawed lending decisions being made that many borrowers are now struggling to repay.

The regulator’s seeming determination to get this “hugely complex task” right at inception is to be welcomed given recent controversies with Irish Water.

But it will have been almost a decade since the crash before the central credit register is fully up and running. It should not have taken so long.

Twitter: @CiaranHancock1