[Draft 1] - Enterprise Credit Bureaux Participation

[Simone]

The World Assembly,

Noting that banks and enterprises rely on accurate reports on the credit standing of their counterparties (“credit reports”), be it suppliers, customers, or borrowers;

Believing that limited sharing of credit report data will assist in lowering borrowing costs for sound businesses, and improve overall productivity for enterprises through identifying those that promptly pay their suppliers;

Desiring a uniform approach to regulating enterprise credit bureaux (ECBs) providing credit reports across WA states;

The WA hereby enacts as follows:

1. Definitions.
   1. "Authority" means an entity designated by a WA state to enforce and interpret this resolution.
   2. "Contributor" means anyone who contributes to a credit report compiled by an ECB, whether a lender, or another enterprise that trades goods or services with a participant (defined below), such as a customer or supplier.
   3. "FISA" means the Financial Services Authority.
   4. "Lender" means any entity in a WA state that lends money as part of its business, such as banks or credit unions.
   5. "Participant" means an enterprise in a WA state which has its credit standing regularly evaluated by a ECB via credit reports.
   6. Terms not defined herein shall be defined by the said authority.
2. Authorization.
   1. No one may become a ECB unless authorized by an authority.
   2. It is up to each WA state whether a ECB is a government or private entity, or how many ECBs are authorized.
   3. An ECB doing business in multiple states is to seek authorization from each authority of each WA state.
3. Excluded businesses. ECBs may only evaluate limited liability entities. ECBs may not issue credit reports on the following types of businesses:
   1. Sole proprietorships and corporations where there is direct flow-through to an individual; and
   2. Partnerships with unlimited liability; and
   3. Any other types of business prohibited by FISA.
4. Participation.
   1. An ECB may not issue a credit report on an enterprise without the consent of that enterprise.
   2. Participation by any enterprise is strictly voluntary.
   3. Once an enterprise chooses to participate, it may not withdraw participation from an ECB unless it has no outstanding balance on credit facilities from a lender that is a contributor to that ECB.
   4. An enterprise must grant separate permission if data is to be shared between different ECBs, whether they are from the same WA state or from different WA states where the enterprise has business.
5. Credit reports. A credit report on each participant should provide at least summary records on the folllowing:
   1. Credit facilities granted by lenders;
   2. Repayment of debts to lenders;
   3. Receipt of receivables and payables to other enterprises;
   4. Any other information deemed pertinent by an authority or FISA.
6. Credit score.
   1. The WA believes that each WA state is to consider whether a single credit score’s advantage of convenience is outweighed by the disadvantage of failing to capture the nuances of differing circumstances.
   2. If a WA state permits an ECB to offer a credit score, that ECB must disclose in granular detail all relevant parameters for calculating such a credit score, as required by FISA.
7. Lenders.
   1. The WA believes it is in the public interest that all lenders of a sufficient size provide records on credit facilities and repayments to ECBs in order to identify borrower quality and offer accurate pricing to potential borrowers, and thus mandates that all lenders do so.
   2. Each authority is to determine if data is to be submitted to one or multiple ECBs, or if data across a lending a relationship across multiple WA states is included in data submitted, subject to clause 4(c).
8. Other contributors.
   1. The WA believes it is in the interest of all enterprises that pay their suppliers on time (and receive clear funds on time) to be recognized as such through credit reports.
   2. Each authority is to determine if it wants to offer incentives to other enterprises to contribute such data to ECBs.
9. Data security.
   1. An ECBs is required to adopt the latest data security and privacy technologies to safeguard all data on enterprises to the maximum extent possible.
   2. An ECBs is required to maintain adequate insurance against data breaches, employee errors, and other incidents as determined by an authority.
10. Minimum standards.
    1. Each participant is entitled to at least one updated credit report per accounting period (say per fiscal year) free of charge.
    2. FISA is to set forth additional minimum regulatory standards for ECBs across all WA states.
    3. An authority may impose additional requirements over and above FISA requirements.