This Thursday, the Chamber of Deputies (Lower House of Congress) must address the amendments introduced by the Senate (Upper House) to the bill that modifies the current Informconf Law.

In the midst of political tension between a group of dissident senators and the Executive Branch, the Senate had approved controversial amendments to the bill introduced and approved by the Chamber of Deputies. While the Deputies' version of the bill established the inclusion of positive credit information in credit reports, the Senate deleted this provision, rejecting the inclusion of positive information and including a limit of 3 minimum salaries (PYG 5,500,000*) to be able to report information on debts. This resulted in the concealment of the information, instead of addressing the problem with a solution.

If the Senate version of the bill passes, this would result in harm to the sector of the population it was intended to help in the first place, the working class consumer. The withholding of information will result in a greater number of rejected credit applications, longer periods of analysis, and higher interest rates, all as a result of a presumption of greater risk in granting credit due to the lack of available information.

In short, people will be forced to resort to “informal loans” with usurious rates, since 90% of the loans granted today are below the limit of 3 minimum wages and there would be no information about them.

On the other hand, the Deputies' version will allow for greater financial inclusion, as commercial and financial entities will now have more information (positive information) allowing them to put a person's financial behavior into context. For example, if a person has an unpaid phone bill of PYG 500,000, but has been paying this same bill on a regular basis for the past 12 months, or is paying a mortgage or vehicle loan, then the credit analyst will be able to more adequately assess the credit application and understand that the unpaid debt may be a consequence of an external factor, rather than unreliable payment behavior.

In addition, the inclusion of positive information will allow for faster and more complete analyses for the purchase of work tools, allowing the working class to start earning money quickly in order to pay off their debts. For example, one may be able to buy a motorcycle with a down payment of less than 5% and immediately start working as a delivery man to earn money.

As a result, both consumer associations and financial institutions have made public statements in favor of the Deputies' version.

Although the trend seems to be that the Chamber of Deputies will confirm its own version and reject the Senate's, the Chamber of Deputies still needs an absolute majority to do so. However, the public is confident that the Chamber of Deputies will follow the right path.  

*Exchange rate of PYG 5,200 to USD 1