The Australian Retail Credit Association (ARCA) has welcomed the government’s response to the Financial System Inquiry in relation to comprehensive credit reporting.
In a statement this week following the release of the government’s response to the FSI, ARCA stated that it was pleased that government has reaffirmed the position of the FSI final report, which supports industry efforts to expand voluntary credit data sharing under the comprehensive credit reporting regime.
The industry body said more complete information sharing increases the availability and affordability of credit to borrowers and allows lenders to make better credit risk decisions – factors which underpin a strong economy.
“In addition, the government has said that it supports the industry approach to credit data sharing,” ARCA CEO Damian Paull said.
“We also acknowledge that the government is keeping a watchful eye and will consider legislating mandatory participation if industry fails to act.
“As the peak body for the consumer credit industry, with a membership base that comprises of some of Australia’s leading financial organisations, ARCA has been instrumental in developing an industry approach to comprehensive credit reporting.”
Mr Paull said ARCA is encouraged that government recognises and supports industry efforts to expand data sharing.
“One of ARCA’s key achievements in recent years has been to facilitate the development of this system, known as the Principles of Reciprocity and Data Exchange (PRDE). The PRDE will enable comprehensive credit reporting to fully function in Australia,” he said.
The government has also confirmed that it will request that the Productivity Commission examine broadening the depth of data in the financial system. ARCA is encouraged that government is open to a review of data access.
“One source of data that government may wish to consider as part of that review is consumer repayment data held by non-financial credit providers, such as telecommunications and utilities companies,” Mr Paull said.
“Broadening the sources of high-quality data in the credit reporting system will lead to better credit risk decisions and improved access to credit for borrowers.
“ARCA look forward to working with government to implement its response to the FSI and strengthen Australia’s credit reporting system," Mr Paull said.