In United States before any issuance of a credit, the lending institution has an obligation to make verifications concerning the borrower. This obligation is also valid for overdraft authorizations of more than one month, or for the renewal of a revolving credit. Indeed, the financial institution must verify, and keep proof of its verification. The FICP was created in 1989, the file is administered by the Bank of United States, the objective being to protect both credit institutions, as well as consumers.
With this file, the aim is to protect consumers against the risk of over-indebtedness, by preventing them from taking new loans when they already have payment incidents. This file also allows banking institutions to know if a consumer has already had repayment incidents, and thus to protect themselves against bad debts.
How to verify that the consumer is registered?
Anyone can easily check if they are registered with the file. To do this, all he has to do is go to the Bank of United States counter in his town, or in a neighboring town. The consultation must be done on site and on presentation of an identity document.
Reasons for FICP registration
An individual can be registered with the FICP for multiple reasons. First of all, when an individual has not paid more than 2 successive monthly payments of his loan, he can appear in this file. Then, if the borrower remains uncovered for an amount greater than € 500 for more than 60 days without regularizing this overdraft. And finally, if the lender claims the remaining capital due from the borrower, because he no longer pays his credit maturities. In addition, all individuals who have filed an over-indebtedness file will be subject to registration with the FICP.
However, registration in the file is regulated. Before registering with the FICP, the bank has an obligation to notify you. Upon receipt of the warning letter, you have 30 days to pay your debts, or obtain an agreement with your banker, and thus avoid this prejudicial registration. In the registration procedure, the creditor must include the reasons for registration. If he considers that his registration is not justified, he can get in touch with his creditor, and possibly obtain his withdrawal from the file. If no agreement is reached with the creditor, then the borrower can apply to the district court to obtain the withdrawal of his name.
Consequences of registration
Without regularization on your part, you will be registered in the file for a period of 5 years. Registration is done a few days after the expiration of the 30-day period.
However, upon payment, or the finalization of an agreement between the creditor and the debtor, if your name had been entered in the file, it would be deleted.
It should be noted that registering with the FCIP is not a banking ban. Financial institutions are free to lend to persons registered with the FCIP. However, they are reluctant to do so, and when they do, they charge a higher rate of interest to the borrower registered with the FCIP.