(Adds comments from Febraban in fourth and fifth paragraphs)
SAO PAULO, Sept 5 Brazil's antitrust authority,
Cade, has preliminarily recommended approval of a credit
research bureau sponsored by Brazil's largest banks that would
gather information on the bill-paying history of consumers and
companies, with the aim of bringing down default rates and the
cost of credit, the agency said on Monday.
The recommendation to approve the venture, called Gestora de
Inteligência de Crédito (GIC), 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.
Boa Vista Serviços SA, as well as the local units of
Experian Plc and Fair Isaac Corp (FICO), are
the largest providers of borrower quality information in Brazil.
"The Brazilian banks are and will continue to be clients of
existing credit research companies," said banking industry group
Febraban in a statement sent to Reuters.
To win Cade's approval, the banks involved in the creation
of GIC guaranteed "not to discriminate against competing credit
bureaus in the access of credit information," Febraban said in
the statement. Cade and the banks also agreed "to avoid the
exchange of certain information through the joint venture" to
comply with antitrust rules.
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 use of a credit-scoring company that rewards 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 face the
highest borrowing costs among the world's major economies.
Typically, credit scoring companies obtain data from the
country's banks on borrowers' behavior and estimated demand for
consumer and corporate credit.
(Reporting by Ana Mano; Editing by Bill Trott)