28 March 2018
Media Release - #2018027, 2018

Getting Australians better deals on their loans

The Turnbull Government is ensuring Australians can get better deals on their loans – today introducing legislation to enact Mandatory Comprehensive Credit Reporting.

This is game changer for both consumers and lenders. It will boost lending competition and provide Australian households and small businesses better access to finance.

Mandatory Comprehensive Credit Reporting will ensure lenders have access to a deeper, richer set of data, encouraging new entrants and small lenders, including innovative FinTech firms, to compete for small business and retail customers with positive credit histories.

Comprehensive credit reporting is not a new principle in our regulatory framework. Lenders have had the ability to share comprehensive credit information on a voluntary basis since 2014, but have failed to do so. The major banks have failed to join and provide the critical mass necessary to attract other credit providers into the system.

The National Consumer Credit Protection Amendment (Mandatory Comprehensive Credit Reporting) Bill 2018 resolves this problem by requiring the four major banks to supply 50 per cent of their comprehensive credit reporting data to credit reporting bodies by 1 July 2018, increasing to 100 per cent a year later.

The Government does not propose to extend the mandate beyond the major banks at this point in time, as once the major banks begin supplying information, strong commercial incentives will encourage other lenders to participate.

The major banks and credit bureaux are well-placed to meet the timeframes and requirements set out in this Bill, which align closely to the existing industry standards, the Principle of Reciprocity and Data Exchange (PRDE).

The Government acknowledges the efforts of industry in developing the PRDE and expects to give effect to restrictions on on-sharing set out in the PRDE through regulations that will be released for consultation in due course.

This Bill also strengthens the security arrangements around consumer data by placing new obligations on the major banks to be satisfied with the security arrangements of the credit reporting bodies prior to supplying data. Credit reporting bodies will also have a new obligation placed on them as to where consumer credit data can be stored.

The Government is aware of the differing views held by industry and consumer advocacy groups around the reporting of special payment arrangements. The Office of the Australian Information Commissioner has published guidance which provides certainty as to how these arrangements will be reported under existing laws. The Attorney‑General will also be leading a comprehensive review of the operation of hardship arrangements under the Privacy Act. The review will respond to concerns raised by industry and consumer advocacy groups around how hardship arrangements are treated and will make recommendations on whether reforms are required. The Attorney-General is expected to complete the review by late 2018.