The Regulation of Consumer Credit Information Systems: A Lesson from Italy?

Credit Reference Agencies (hereinafter ‘CRAs’) collect a variety of financial information on individuals, producing a so-called ‘Credit Report’ that contains details of the payment and credit history of an individual, his or her financial accounts and the way these have been managed, as well as other information of interest to the credit industry. They have evolved as organisations providing information sharing devices in the financial system in order to meet the problem of asymmetrical information between borrowers and lenders. By providing rapid access to standardised information on potential borrowers, they represent the response to the demands for such type of data from banks and other financial intermediaries. Nowadays, as a result, CRAs represent a very important tool for the assessment of risk-management at the decision-making stage of granting credit, thus becoming one decisive element in such process. Against this background, however, at European level at least, little attention has been paid so far to either privacy concerns or the discriminatory consequences of credit reporting, particularly since its regulation has been left to the general provisions of the EU Data Protection Directive as implemented in national laws. Recently, Italy has enacted pioneering specific legislation on consumer credit information systems. Thus, the aim of this paper is to provide a comprehensive examination of the new dispositions adopted by Italian law, in an attempt to investigate whether it could represent an example for the regulation of consumer credit reporting for others, specially when it is analysed within the wider context of the European Union.