The Australian Competition and Consumer Commission (ACCC) is seeking to improve the supply of consumer credit information between lenders and credit reporting bodies.
Under the proposal, the Australian Retail Credit Association (ARCA) would be authorised to provide comprehensive credit reporting, allowing it to exchange detailed consumer credit data between signatory credit reporting bodies and lenders for a five-year period.
The move comes after the ACCC received a large number of submissions in response to the application for authorisation from the industry, with general support for the application.
“Better consumer credit information will allow lenders to make better credit decisions, with resulting benefits for consumers in the form of more competition among lenders and greater financial inclusion for consumers as well as less over-indebtedness,” ACCC acting chair Delia Rickard said.
“The ACCC considers that the provisions will help overcome reluctance in the industry to share consumer credit information, facilitating a more complete exchange between credit providers and each credit reporting body.
“This will lead to increased competition, both between credit reporting bodies and between lenders, and assist lenders to comply with their responsible lending obligations at less cost.”
However, credit reporting body Veda has raised concerns that the provisions will see adverse consequences for competition, while consumer advocacy bodies have voiced fears around recording repayments under financial hardship arrangements.
“The ACCC accepts that there are some potential public detriments arising from the costs imposed by the provisions. However, these costs appear to be relatively small and offset by the cost savings and other benefits of these provisions,” Ms Rickard said.
The ACCC is seeking submissions from interested parties in relation to its draft determination, before making a final decision. Submissions close on 14 August.