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YOUR Credit Rating May Take a Hit IF…

Submitted by Kammie Holder What will be the unintended consequences? What is the real, real, real, real reason for getting involved in a Credit bureau rather than enacting legislation to control Credit Bureaus? Asking for my late friend Douglas Trotman. Sorry, but we both never trust governments.  Extracted from Barbados Today December 15th,2021: Senator Boyce:…

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Submitted by Kammie Holder
  • Kammie Holder, Social Commentator
  • Late Douglas Trotman

What will be the unintended consequences? What is the real, real, real, real reason for getting involved in a Credit bureau rather than enacting legislation to control Credit Bureaus? Asking for my late friend Douglas Trotman. Sorry, but we both never trust governments. 


Extracted from Barbados Today December 15th,2021:


Senator Boyce: Credit reporting bill needs ‘longer runway’

While commending the fundamental purpose of the Fair Credit Reporting Bill 2021, Senator Kevin Boyce is of the view that some of the parties involved in administering the various aspects of the legislation need more time to be brought up to speed on the roles they will play.He told the Upper House on Monday evening, during debate on the Bill, that while the legislation will help people access finance, control their spending and, in some respects, provide a safety net, “all the parties involved need a longer runway so that they can come up to speed with what is expected of them”.

For example, in Sections 2 and 3 of Clause 16, it speaks to credit information providers. We would assume that this means these people will provide information to the credit bureau. From my interpretation, it seems as though this will include utility companies such as the Barbados Light and Power, the Barbados Water Authority, the Corporate Affairs and Intellectual Property Office and the Land Registry.

So, does this mean that if a person is in arrears to any one of these entities, they might have difficulty in accessing credit as they seek to improve their lives?” the Independent Senator questioned. In response, Deputy Leader of Government Business in the Senate, Senator Kay McConney, said: “We agree that in Clause 16 (3) there is the identification of designated entities as those allowed to provide information to the credit bureau. However, those listed under Section 16 (1) under financial institutions are those which are automatically captured, such as banks, insurance companies and credit unions and they will be included as soon as the Bill comes into effect. The utility companies and other such entities will come into the picture once they meet the requirements spelled out by the Central Bank of Barbados.” (DH)

19 responses to “YOUR Credit Rating May Take a Hit IF…”

  1. 555dubstreet Avatar
    555dubstreet

    Credit Companies were responsible for the Global Financial Crash

    Island In The Sun Complete Version

  2. NorthernObserver Avatar
    NorthernObserver

    @555
    what is a Credit Company?

  3. Lawson Avatar
    Lawson

    trans union etc is letting you know if someone is basically a good risk, sure it makes it harder to get money and can force you to go to b lenders but at least it will be the odd person that goes delinquent and not a free for all. crashing everything.

  4. 555dubstreet Avatar
    555dubstreet

    what is a Credit Company?

    banks and credit corporations who lend in money markets
    short and long term credit such as billions to investment banks for settlement of trades
    credit card companies, banks, mortgage lenders, retail loans
    and bundle peoples debt up as financial instruments such as MBS CDO ABS
    selling them as fixed income instruments and move them off their books
    so they can rinse and repeat the process again

    the crash was more due to reckless lending by business than reckless borrowing by customers

  5. 555dubstreet Avatar
    555dubstreet

    so who’s going to regulate the greedy credit corps

  6. NorthernObserver Avatar
    NorthernObserver

    and since corporations of all types sell on credit to both the private and the public sector, even without their own credit cards, which many have these days, it would seem that every corporation and business, and even many individuals are sources of credit? Or is that debt?
    Regulate? Each time some regulation is enacted, hundreds of Brainiac’s are figuring out how to get around it. And the consumer, the party responsible for the credit (debt?), is asking ‘give me a solution’. I want/need whatever the credit is for.

  7. 555dubstreet Avatar
    555dubstreet

    When money is freely available banks/people borrow more to invest / pay off debts / spend more on stuff
    But, when money source dries up is withdrawn / not available, they are illiquid

    Stardust From Tomorrow
    Stardust For Tomorrow
    Things are wonderful and truly spectacular in the new Republic of Barbados


    https://www.youtube.com/watch?v=UFHfuRgyk6k

  8. 555dubstreet Avatar
    555dubstreet

    credit (debt?)

    it is both
    it is credit (money in bank) which can be spent
    and debt (liability a statement of money owed to creditors)

    but the point is the lenders industry are the scammers
    gangster gangster
    it’s not about a salary
    it’s all about reality

    encouraging people to borrow more / sign up for credit cards
    encouraging people to spend on goods
    high interest rates
    disproportionate fees penalties and charges
    liens on properties for small defaults
    making people bankrupt

    fret not
    why worry
    everything will be sorted out when weed is legal next week


    Money, money, money, money I’m here to make some waves Hoping to convince you Before you have a thing to say Be it a car or expensive caviar They go to your creditors ‘Cause they know who you are Don’t leave your home Without American Express Never trust your friends Without a very thorough credit check Some people will pay you With one eye on the clock Others will have to pay Through that friendly neighborhood loan shark Fast, fierce and funny The way people can play with your money Now I tried to romance you And I tried real hard Everything was going good Until they took my credit card Now I’m not a flaky kind of guy you see I’ve got plenty of money But unfortunately not with me Now you’re my kind of girl And you like nice things I can tell by the clothes you wear And the size of the diamond on your ring As long as there’s cash around There’s always hope But once you see what your cash is worth You’ll deep six over and croak Fast, fierce and funny The way people can play with your money Baby, check it out, there’s no doubt Use your head, save your bread Baby, check it out Baby, check it out The Dow Jones average today hit an all time low And sent the stock market crashing Thousands panic in the effort to hold on to their assets Washington has made an official statement And we are about to take it live to Washington Make that money, try to stay ahead Make that money till ya drop dead Make that money, now you’re on your own Now that bank won’t give you a loan Work your fingers to the bone Makin’ that money, gotta bring it home Got no cash, gotta write a check If they haven’t closed my bank account yet Money, money, money, money [Incomprehensible] Work your fingers to the bone Gonna bring that money, money, hoh, yeah

  9. 555dubstreet Avatar
    555dubstreet

    #comment-1851442 disappeared into a black hole like a Vajayjay

  10. David Avatar
    David

    IMF Executive Board Concludes 2021 Article IV Consultation and Sixth Review under the IMF’s Extended Arrangement for Barbados

    December 16, 2021

    The Executive Board of the IMF concluded the sixth review of the IMF’s extended arrangement under the Extended Fund Facility (EFF) for Barbados. The completion of the review allows the authorities to draw the equivalent of SDR 17 million (about US$[24] million).
    Despite the challenges posed for the economy by the pandemic and a series of natural disasters, Barbados has been steadily moving ahead with the implementation of the comprehensive Economic Recovery and Transformation (BERT) plan aimed at restoring fiscal sustainability, and increasing reserves, and unlocking growth potential through structural reforms.

    Washington, DC : On December 15, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation [1] with Barbados. At the same meeting, the Board also completed the sixth review of Barbados’ economic reform program supported by an arrangement under the Extended Fund Facility (EFF). The completion of the review allows the authorities to draw the equivalent of SDR 17 million (about US$24 million), bringing total disbursements to the equivalent of SDR 305 million (about US$425 million).

    The four-year extended arrangement under the EFF was approved on October 1, 2018 (see Press Release No. 18/370 ) and is for an amount equivalent of SDR 322 million (about US$465 million).

    Barbados continues its strong implementation of the comprehensive Economic Recovery and Transformation (BERT) plan aimed at restoring fiscal sustainability, increasing reserves, and unlocking growth potential through structural reforms. The prolonged global coronavirus pandemic, along with the twin natural disaster shocks of volcanic ashfalls from neighboring St. Vincent in April and category 1 hurricane Elsa in July, poses a major challenge for the tourism-dependent economy. Reform efforts include enhancing adaptation measures towards increasing vulnerabilities emanating from climate change and natural disasters.

    Following the Executive Board discussion, Mr. Bo Li, Deputy Managing Director and Acting Chair, made the following statement:

    The Barbadian authorities continue to make good progress in implementing their comprehensive Economic Recovery and Transformation plan, despite the challenges caused by the ongoing global pandemic and two recent natural disasters. Given that the outlook remains uncertain, the authorities need to maintain sound policies and their strong reform momentum to safeguard macroeconomic stability and boost potential growth.

    A temporary relaxation of the primary balance target for fiscal year 2021/22 is appropriate given the lingering impact of the pandemic and unexpected spending needs to address the impact of Hurricane Elsa and ashfalls from nearby volcanic eruptions. The authorities will have to compensate this short-term fiscal accommodation with higher primary surpluses in the medium term to safeguard debt sustainability.

    Medium-term fiscal adjustment will be supported by reforms to state-owned enterprises (SOEs). To create fiscal space for investment in physical and human capital, transfers to SOEs need to decline by strengthening oversight of SOEs, revenue enhancement, cost reduction, as well as mergers and divestment. The authorities’ plans to reform the pension system and introduce a fiscal rule will also support fiscal sustainability.

    The authorities took an appropriate monetary and financial policy response to the pandemic. They plan to recapitalize the central bank gradually. Carefully unwinding pandemic-related credit support measures, as conditions allow, will be critical to contain financial sector risks. The Central Bank of Barbados plans to join the Network for Greening the Financial System and intends to gradually integrate climate change risks into its financial stability assessments. Going forward, the authorities should also work, in close cooperation with the Financial Action Task Force, to further strengthen the AML/CFT framework.

    Read full text: https://www.imf.org/en/News/Articles/2021/12/16/pr21379-barbados-imf-executive-board-concludes-2021-article-iv-consultation-and-sixth-review?cid=em-COM-123-44052

  11. Hants Avatar
    Hants

    Delay in NIS pension cheques

    https://www.nationnews.com/2021/12/17/delay-nis-pension-cheques/

  12. Miller Avatar
    Miller

    @ David December 16, 2021 4:41 PM
    (Quote):
    Medium-term fiscal adjustment will be supported by reforms to state-owned enterprises (SOEs). To create fiscal space for investment in physical and human capital, transfers to SOEs need to decline by strengthening oversight of SOEs, revenue enhancement, cost reduction, as well as mergers and divestment. The authorities’ plans to reform the pension system and introduce a fiscal rule will also support fiscal sustainability. (Unquote).
    +++++++++++++++++++++++++++++++++++++++++

    Dear Blogmaster:

    Isn’t the above commitment to fiscal and economic reform a mere annual rehashing of the same ole same ole piffle announced in the MoF’s December 2013 declaration of Sinckler’s plan for the financial and economic survival of Barbados?

    Isn’t it the same action plan which the goodly Doctor Justin Robinson underscored and undertook to implement under the previous administration?

  13. David Avatar
    David

    @Miller

    It sounds like the same balderdash we heard when late David Thompson summons the heads of the SOEs to read them the riot act at the start of his brief tenure as PM.

  14. David Avatar
    David

    Barbados: 2021 Article IV Consultation, Sixth Review Under the Extended Arrangement Under the Extended Facility, and Request for Modification of Performance Criteria-Press Release; and Staff Report

    Publication Date:

    December 17, 2021 

    Electronic Access:

    Free Download. Use the free Adobe Acrobat Reader to view this PDF file

    Summary:

    While Barbados has been making good progress in implementing its Economic Recovery and Transformation (BERT) plan to restore fiscal and debt sustainability, rebuild reserves, and increase growth, it continues to face major challenges owing to the global pandemic. International reserves have increased to US$1.4 billion by October 2021 supported by IFI loans. This, and a successful 2018-19 public debt restructuring, have helped rebuild confidence in the country’s macroeconomic framework. However, a virtual standstill in the tourism sector during the pandemic took a significant toll in 2020, with the economy contracting by 18 percent. While Barbados was successful in containing the outbreak during 2020, renewed COVID-19 waves weighed on the economic recovery in 2021. In addition, Barbados was hit by the twin natural disaster shocks of volcanic ashfalls from neighboring St. Vincent in April and category 1 hurricane Elsa in July. Economic growth is projected at 1.6 percent for 2021 premised on a modest recovery of tourism towards the end of 2021—down from 3 percent projected at the time of the fifth EFF review. The outlook remains highly uncertain, and risks are elevated.

  15. crusoe Avatar
    crusoe

    David, As the economic report says, the credit of the country as a whole is in question.

    That makes the issue of individual credit ratings rather ironic.

    As if banks et al need a credit bureau in Barbados. They already make a person give their left testicle, grandmudda and six pieces of silver as collateral, even just to buy a bicycle.

    What the france will a credit bureau do?

    Bit strange that this comes out of the woodwork.

    One of the least concerns right now.

  16. David Avatar
    David

    @Crusue

    Are you saying there should be no attempt to implement a system that improves how credit is managed?

  17. David Avatar
    David

    A constant struggle…

    Activist: Bad land laws causing problems

    A social activist is chastising Government over the failure to amend certain land legislations.
    Kammie Holder and his family are among many residents in Cox Hill, St Philip, currently locked in strife concerning land which is being claimed by the Weekes/Murrell family.
    It was his mother, 79-year-old Sybil Holder, who lost her leg after she was struck with a vehicle on Sunday. Former neighbour Selah Murrell has been charged with serious bodily harm.
    Holder was in Cox Hill yesterday where he and other residents met with Democratic Labour Party leader Verla De Peiza as well as the spokesman for housing, lands and infrastructural development B. Ricardo Harrison. Holder said the issue was a broad one, adding his family was not in fact involved in any land dispute.
    “This issue is bigger than what happened here; this happened because of deficiencies in both the Tenantries Freehold Purchase Act as well as the Town Planning Act. You cannot have major land owners in a country erecting fences six inches from others’ properties.
    “There’s situations where you can have tenantry roads existing for 100 years and then somebody suddenly deciding ‘half this road is mine because it butts and bounds and I’m going to erect columns’. How can there be peace when that happens and I am saying what happened here can happen anywhere in this island,” he said.
    Abusing system
    Holder said large land owners were abusing the system to bully those without as much land. He said this was what had been happening in Cox Hill for years as the issue actually went back much further.
    “I’m 54 and this gap used to have an entrance and exit but now there are persons putting up columns. Thank God Town Planning prohibited that. Government, if it’s worth its salt, needs to amend the Tenantries Freehold Purchase Act so these roads can be vested to the crown.
    “Too many seniors in Barbados are going through what my mother is going through. This is not an issue the police can solve, it can only be solved through legislative change,” he said, adding he was “disappointed” in Prime Minister Mia Amor Mottley.
    Holder said he had retained the services of Queen’s Counsel Michael Lashley to handle both the land issue and the criminal charges. He said his mother now lived with him and he would have to retrofit his home and hire a nurse.
    Other residents, who requested anonymity, spoke about the issues they have experienced.
    In last week’s Midweek Nation, some residents had admitted the land was owned by the Weekes/Murrell family but said many of them had been granted permission to build their houses on the land. They said the family had been sending letters over the past couple of years demanding everyone in the area to vacate.
    Harrison said the purpose of the visit was to listen and see if the situation could be resolved peacefully.
    “This problem has been ongoing for quite some time, which led to the incident between neighbours. There seems to be a lot more to the story and we cannot draw any conclusions as we have not heard from the other side, though we are prepared to do so,” he said.
    (CA)


    Source: Nation

  18. David Avatar
    David

    Settling debt with bonds
    by DR JULIET MELVILLE THE GOVERNMENT RECENTLY proposed legislation (The Debt Settlement [Arrears] Act 2021) to use bonds to settle payment due to people whose lands were compulsory acquired or who were awarded legal claims against the Government and other outstanding liabilities of the Government.
    This legislation provides for the issuance of Series J bonds to meet these outstanding claims with some of these claims dating back decades and persisting over several administrations, both the Barbados Labour Party and the Democratic Labour Party.
    On the positive side, this appears to be a good move by this administration to deal with these claims once and for all. The affected people will be pleased that they now have a definitive time frame for the payment of monies due to them from the Government.
    The failure to settle many of these long-standing claims would no doubt have imposed a heavy financial and mental toll on the affected people directly impacting their livelihoods and depriving them of the use of their assets. The proposed Series J bonds, which pay no interest, will fully mature in three and a half years (42 months) from the date of issue.
    42 payments
    Unfortunately, those people desiring immediate cash will be sorely disappointed as their claims will be settled in 42 equal monthly payments beginning the month after issue. These payments could be further deferred if Barbados is impacted by a natural disaster because of the inclusion of a natural disaster clause in terms of the bonds.
    Those people requiring immediate cash will have to trade their bonds, probably at a very steep discount given the supply of bonds on the market and the lack of appetite in the market for Government paper. Investor interest in Barbados Government paper has waned in light of the recent restructuring of the public debt and the issue of new bonds to replace this, the issue of Barbados Optional Savings Scheme (BOSS) bonds to settle claims of public servants and the recent issue of $125 million in treasury notes.
    Institutional investors, such as financial institutions with deep pockets, may find these bonds a worthwhile investment if the price is right.
    Where these bonds are sold at a steep discount, this will represent a transfer of wealth from the long-suffering Government creditors to the investors. In the absence of a vibrant competitive secondary market for bonds and in order to meet the bondholders’ need for cash and to prevent the steep discounting of the bonds, the Central Bank could facilitate the sale of these bonds as in the case of the BOSS bonds. Even if the bonds are held to maturity, taking in to account the time value of money, people will see the present value
    of their settlement eroded by 12 per cent. Further, to date the payments owed to dispossessed land owners, legal claimants and other creditors would have been accruing interest. It is assumed that the issued bonds will include this accrued interest.
    Once the bonds are issued, even though this is in effect another IOU from the Government (that is, the debt is still outstanding), interest will no longer be paid. This of course will reduce the interest cost of the Government and stop the public debt from accumulating, positively impacting the fiscal and the debt position.
    Given the current inflationary environment, the settlement of the outstanding claims via non-interest-bearing bonds will further erode the real value of the settlement.
    In summary, while concrete steps are being taken to settle some long-standing claims, people won’t be receiving cash in hand. Moreover, one kind of debt is being substituted for another type of Government debt. People will begin receiving monthly cash payments after the issue of the bonds, spread over three and a half years, while receiving zero interest.
    Most likely sell bonds
    The cash-needy will most likely have to sell their bonds at a steep discount to financial institutions and other investors with an appetite for Government paper.
    Therefore, bondholders are likely to suffer a decline in both the nominal value (where the face value is discounted) and the real value of the settled claims.
    Many people, though pleased that at last they can look forward to the imminent settlement of their claims, some receiving Series J bonds to settle their claims may not feel so comforted given the precedent set with the restructuring of Government debt in 2018 and the rising debt stock.

    Dr Juliet Melville is an independent consultant, a former chief economist at the Caribbean Development Bank and a former lecturer in the economics department at the St Augustine Campus of the University of the West Indies.

  19. Donna Avatar
    Donna

    EXACTLY!

    THIS IS TERRIBLE!

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