Federal Government Introduces Mandatory Comprehensive Credit Reporting Bill

Tuesday 17 April 2018 @ 10.17 a.m. | Corporate & Regulatory | Legal Research

On March 28, the Turnbull Government introduced the National Consumer Credit Protection Amendment (Mandatory Comprehensive Credit Reporting) Bill 2018 (Cth) into the House of Representatives. The Bill aims to amend the National Consumer Credit Protection Act 2009 (Cth) to mandate a comprehensive credit reporting regime, which would require large authorised deposit taking institutions (ADIs), to provide credit information on consumer credit accounts to credit reporting bodies from 1 July 2018.  The Bill was previously released in the form of an Exposure Draft for public comment – see TimeBase’s earlier article

The Bill has also now been referred to the Senate Economics Legislation Committee, which is currently accepting public submissions until April 20.  The Committee is due to report on May 29.

In a media release, Treasurer Scott Morrison said:

“This is [a] 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…

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.”

Reviews to Continue

In his media release, Treasurer Scott Morrison also noted that:

“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.”

The Bill also includes a provision for an independent review of the proposed amendments to be conducted before 1 January 2022.  Speaking to the House of Representatives in the second reading speech, Assistant Minister to the Treasurer Michael Sukkar said:

“We expect that this review will provide an opportunity for the government to confirm that the system is operating as intended; and to consider the impacts of the system on consumers and industry, whether the scope of the system should be expanded, and whether alternate frameworks for credit reporting would be more appropriate given technological changes or, again, changes in the security environment.”

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products. Nothing on this website should be construed as legal advice and does not substitute for the advice of competent legal counsel.

Sources:

National Consumer Credit Protection Amendment (Mandatory Comprehensive Credit Reporting) Bill 2018 (Cth), Explanatory Memorandum and Second Reading Speech available from TimeBase's LawOne service

Media Release: Getting Australians better deals on their loans (The Hon Scott Morrison MP, Treasurer of the Commonwealth of Australia, 28 March 2018)

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