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A consumer right: five years since the modernization of the Positive Register
On August 8, the National Association of Credit Bureaus (ANBC), in partnership with the National Confederation of Financial Institutions (CNF) and the National Association of Credit Financing and Investment Institutions (ACREFI), held an event to commemorate five years since the modernization of the Positive Registry (CP), discussing the challenges of implementation, the results obtained to date and the future of this tool that has been transforming credit analysis. The event was attended by authorities such as the president of the Central Bank, Roberto Campos Neto, Senator Efraim Filho, representatives of the credit bureaus - which are the managers of the Cadastro Positivo database, as well as entities from the financial sector and representatives from the energy, telecommunications and regulatory sectors.
In the presentation made by the president of the Central BankIn this context, we can see how the modernization of the Positive Registry is part of a broader agenda of microeconomic reforms. These reforms seek to increase access to credit in the country and reduce the banking spread. In addition to the reduction in information asymmetry achieved by positive information, Campos Neto highlighted the improvement of credit recovery, guarantees and the digitalization vector, driven above all by the transformation of means of payment.
From the start of the pandemic, it was clear that the credit channel would be key to mitigating the impacts of the economic crisis. Years later, bank credit continues to grow at significant rates, as FEBRABAN president Isaac Sidney pointed out in his speech. Credit advanced throughout the first half of the year despite the greater volatility of the global economy and should end 2024 with growth.
The good performance of the credit market reflects the progress already made on the microeconomic agenda, including the modernization of the Positive Registry. The main change introduced five years ago was the creation of a model with automatic adhesion by consumers, guaranteeing the option to leave - the "opt-out" - replacing the "opt-in" model, which resulted in low adhesion. Since then, credit bureaus and the so-called data sources, which cover various sectors of the economy, have been working to ensure that the Cadastro Positivo reaches its full potential. Some results can already be seen.
Two years after the new model was sanctioned, the The Central Bank released a study showing that consumers with positive information had a 10.4% reduction in the spreadon average, compared to a control group with no positive information available. In terms of coverage, the modernization has taken the Positive Registry to 167 million unique registrations and coverage of 87% of the Brazilian population.
At the event marking five years of the Cadastro Positivo, information sources from various sectors of the economy highlighted the benefits of sharing data. Reducing delinquency is one of the main benefits, since users of the service have an extra incentive to be punctual. Another benefit highlighted was the contribution made by the sector to the social dimension of the ESG agenda. Access to credit is recognized as a social benefit, increasing the ESG S score and providing better conditions for data sources in the capital and financial markets.
The representatives of the credit bureaus spoke about the challenges faced during the implementation of the Cadastro Positivo, highlighting the standardization of data and the technology needed to process a larger volume of data, transforming it into relevant information for decision-making. The sector also highlighted the reduction of barriers to entry for both new credit grantors and new intelligence companies, which provide services for credit analysis.
The next phases in the implementation of the Cadastro Positivo foresee the entry of information from new data sources, raising the profile of credit in the country. The next sector to share its default data, in accordance with the law, is the basic sanitation sector, whose importance was widely highlighted in the debates and presentations throughout the event. Sanitation companies, both public and private, are expected to add around 55 million records to the Cadastro Positivo database. Each sector has its own dynamics, as well as specificities in its operations. Hence the strategy of promoting the phased implementation of the Cadastro Positivo.
The efforts to include telecommunications data have resulted in 130 million records being added to the CP, 14.5 million of which - CPFs or CNPJs - are new to the financial system. The multisectoral nature of the database is crucial to the goal of financial inclusion through visibility for credit, as it is able to reach the public with little or no previous banking relationship. More recently, the inclusion of data from the electricity sector resulted in the inclusion of another 6.0 million new records. These consumers now gain visibility for credit analysis through their energy bill payment history.
Finally, it is worth highlighting the recognition by consumers of the benefits of the Positive Registry. This recognition can be measured in figures: 81% of the consumers who left the Positive Registry have returned by the first half of 2024. For the bureau sector, this is an indication that consumers perceive the benefits of the program and that, by returning to the Positive Registry, they understand the potential to benefit from fairer credit conditions.
More than just improving the ability to predict credit risk, the Positive Registry is an incentive for these consumers to pay on time. It is worth noting that the use of the Positive Registry has increased consumers' 78% credit rating, providing them with better credit conditions.
In short, the last five years have shown the potential of this instrument, which is still maturing. The next steps will serve to consolidate this potential, making the credit system work more efficiently and its products more accessible.
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By: Elias Sfeir President of ANBC & Member of the Climate Council of the City of São Paulo & Certified Advisor
