Brazil banks get early antitrust approval for credit bureau
SAO PAULO, Sept 5 (Reuters) - A preliminary report from Brazil's antitrust authority Cade recommended approval of a joint venture by Brazil's largest banks to start a credit research bureau, the agency said on Monday.
The credit research company, called Gestora de Inteligência de Crédito (GIC), will gather information on the bill-paying history of both Brazilian consumers and companies with the aim of bringing down default rates and the cost of credit in a harsh downturn.
The recommendation to approve the venture now needs to be confirmed by Cade's tribunal, the statement said, without giving a date for a final decision. Approval will hinge on the parties signing a control agreement, known as an ACC, Cade said.
Last January, state-controlled Banco do Brasil SA and Caixa Econômica Federal teamed with private-sector banks Itaú Unibanco Holding SA, Banco Bradesco SA and Banco Santander Brasil SA to create the research unit. Each of the banks will take a 20 percent stake in the joint venture.
The implementation of a credit-scoring company rewarding prompt payers is seen by policymakers and bankers as a way to help bring down credit costs amid rising defaults in Brazil's harshest recession in the past 80 years.
With Brazil's benchmark interest rate holding at 14.25 percent since July 2015, consumers in the country pay the highest borrowing costs among the world's major economies.
Boa Vista Serviços SA, as well as the local units of Experian Plc and Fair Isaac Corp, or Fico, are the largest providers of borrower quality information in Latin America's largest economy. They obtain from the country's banks data on borrowers' behavior, promptness patterns and also estimates on demand for both consumer and corporate credit. (Reporting by Ana Mano; Editing by Bill Trott)
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