After more than a year of touch-and-go negotiations, Trans Union Corp. announced that it has signed an agreement with the Mexican Bankers Association to form a credit bureau.
The 21 banks in the association will own 70% of the venture. Trans Union will own the majority of the remaining 30%, and Fair, Isaac & Co., a credit scoring vendor based in San Rafael, Calif., will have a minority interest.
The negotiating process, which was led by representatives of Mexico's three largest banks, Banamex, Bancomer, and Serfin, was halted at least once because of conflicts over restricting access to the data from outside lenders.
Mexican bankers are fearful that foreign lenders will use the credit bureau to steal their customers, so they have debated how they can protect the information they provide to the bureau. Ultimately, the Mexican government weighed in on the matter in February, establishing rules by which credit bureaus may operate.
Equifax Inc. was also a contender to be the Mexican banks' partner.
Initially the credit bureau, to be called Trans Union de Mexico, will only provide data on consumers' credit card payment records since that is what has traditionally been collected in Mexico. But eventually it will include other consumer loans like auto and mortgage payments.
The Mexican Bankers Association is contributing 14 million credit card records to the bureau.
The credit bureau is expected to reduce Mexican credit card delinquency rates, which range above 30%.
For its part Fair, Isaac will provide the same kind of services to the venture that it provides to U.S. credit bureaus: risk management tools.
Juan Pina, executive vice president of Banamex and lead negotiator for the banks said, "This agreement brings together Trans Union's wide experience at managing consumer credit information and Fair, Isaac's credit risk modeling tools. Both will be important in developing the credit culture in Mexico."
Access to the credit bureau, which will begin providing credit reports at the end of this year, will be limited to credit grantors that are licensed to do business in Mexico, and that contribute consumer credit information to the bureau. The venture awaits government approval.