On 22 November 2023, the Moneylenders (Amendment) Bill was passed in Parliament to amend the Moneylenders Act (“MLA“) in three main aspects:
(a) improve data sharing and usage policies;
(b) enhance the Moneylenders Credit Bureau’s (“MLCB“) functions through the sharing and use of data it maintains; and
(c) facilitate digitalisation in the licensed moneylending industry by allowing for the digital provision of statements of accounts.
By way of background, the MLA was last amended in 2018, in part to introduce the MLCB. Licensed moneylenders (“LMLs“) were required to submit borrower information to the MLCB, obtain a credit report of the loan applicant before granting a loan, and update the MLCB whenever borrowers repay their loans.
Data Sharing and Usage Policies
The Bill introduces new provisions to align the licensed moneylending data sharing framework with the Whole-of-Government data sharing approach, enabling the Registrar to share data in accordance with a data sharing direction given under the Public Sector (Governance) Act (“PSGA“). With regard to data protection, the PSGA includes provisions prohibiting the unauthorised disclosure or improper use of the information shared, among other things.
Second, the amendments will also enable moneylenders to conduct comprehensive credit checks on borrowers. At present, LMLs are only able to share borrower information with the MLCB, but not other credit bureaux. For instance, an LML cannot request a credit check from another credit bureau as this would require disclosing the borrower’s identification number.
When the Bill enters into force, LMLs will be allowed to disclose borrower information to more third parties, namely:
(a) a prescribed list of credit bureaux, to enable them to provide additional information on the borrower’s creditworthiness and indebtedness;
(b) any prescribed person for purposes related to the welfare and protection of applicants, borrowers and sureties; and
(c) third parties engaged to provide information technology (IT) support or recover debts, to facilitate the smooth delivery of business operations.
LMLs will also be able to obtain records from public agencies to verify the accuracy of information submitted by loan applicants.
To ensure the security and integrity of borrower information, the Bill requires LMLs to augment their security arrangements to safeguard information in their possession or under their control.
Enhancing MLCB’s Functions
The MLCB was originally launched to facilitate better tracking and monitoring of unsecured loans issued by LMLs. Now, to enable data held by the MLCB to better benefit both borrowers and LMLs, the Bill will allow the MLCB to:
(a) provide credit reports of loan sureties to LMLs during loan applications; and
(b) produce business reports for LMLs to assist them in the development and improvement of their business strategies or practices.
Facilitate Digitalisation
LMLs will be able to provide borrowers with statements of account through methods other than mail and email – for instance, via WhatsApp, their own app, or their website. Both LML and borrower must agree on the new mode(s) of communications.
Click on the following links for more information:
- Full text of the Bill (available on the Singapore Statutes Online website at www.sso.agc.gov.sg)
- Second Reading Speech by Senior Parliamentary Secretary Rahayu Mahzam on the Moneylenders (Amendment) Bill (available on the Ministry of Law website at www.mlaw.gov.sg)
