July 27 — Very naturally the proposition made at the recent Brighton Beach, N.Y., conference of State and National bank examiners for the formation of a National association of State and National bank examiners is looked upon with distrust in many quarters. The main purpose of such an organization would be the exchange of information about the loans and credit of individuals and firms.
This idea involves the extension to the entire country of the system now adopted by the New York State Superintendent of Banking, under which credit information is regularly collected and recorded. The possession of confidential information by a State superintendent may not affect the standing of any individual or firm, but the general exchange of this information would work serious detriment to the credit and standing of any concern, and this is the reason why the proposal for the establishment of a National credit bureau is viewed with distrust in so many quarters.
The practical co-operation between State and National bank examiners was first suggested a year ago, and it was upon this initiative that the New York State Superintendent, George C. Van Tuyl, Jr., instituted the credit bureau in the State Banking Department, which will serve as the model for the National bureau if it is established. Ultimately it is proposed that a bureau similar to that in New York shall be created in every State.
Of course all the information collected by the State bureau is turned over to the National bank examiners in New York City, so that the latter are kept fully informed of the status of all the large borrowers. To this extent no objection is urged against the credit bureau, but when this boundary is exceeded and the information is widely disseminated, then the firms whose operations are widely heralded are alarmed about the effect which such a situation might have upon their credit. They see no way by which the operations of a National Credit Bureau may be relegated so that they will be secure against the possible damage that may be done to their business. The improper use of the so-called credit information against which there is said to be no security, makes the general body of business firms by which loans are made instinctively hostile to the new scheme.
