CDR expansion delayed to ‘allow the CDR to mature’

The Australian government has confirmed that it will be delaying the roll-out of the Consumer Data Right (CDR) to more sectors in order to focus on bedding down the existing regime.

Currently, the CDR regime is live in the banking and energy sectors, enabling consumers to permit accredited third parties to access and share their financial and energy data. Major banks were the first players to come under CDR, followed by non-majors and then energy providers.

The CDR regime is also now being rolled out across the non-bank lending sector, after the Assistant Treasurer and Minister for Financial Services formally designated the non-bank lending sector as subject to the CDR at the end of last year and closed a consultation on the proposed policy approach in January 2023 (draft non-bank lending rules have yet to be released).

Treasury has previously said it intends for non-banks to share data on:

• Personal credit or charge card accounts
• Business credit or charge card accounts
• Residential home loans
• Investor home loans
• Mortgage offset account
• Personal loans
• Business finance
• Investor loans
• Lines of credit (both personal and business)
• Overdrafts (both personal and business)
• Asset finance (including leases)
• Consumer leases
• Buy now, pay later

Some data on closed accounts is also expected to be covered (for example, transaction data on accounts that were closed less than 24 months ago).

Approximately 1,500 non-bank lenders are deemed to be relevant players that could be brought into the scheme (non-bank lenders that have total resident loans and finance lease balances of over $400 million), with smaller lenders able to elect to share data through the CDR on a voluntary basis.

A phased approach had been proposed by government to “manage the impost across the sector, but also the impost on each entity” and some non-banks — such as Liberty Financial — are already accredited data recipients.

However, amid ongoing data quality issues in the open banking ecosystem — and the fact that the non-bank CDR system is still being finalised — the government has now confirmed that it has made the decision to pause expansion into superannuation, insurance, and telecommunications.

“This will allow time to focus on ensuring that the CDR in banking is working as effectively as possible, extending into the non-bank lending sector and continuing with the energy roll-out as planned,” the latest CDR newsletter read.

Indeed, the government has set aside $88.8 million over two years from 2023–24 to support the continued operation of CDR in the banking, energy, and non-bank lending sectors and to progress the design of ‘action initiation’ and uplift cyber security.

This has the aim of:

• Improving data quality and driving participation in banking and energy
• Implementing the CDR in non-bank lending
• Undertaking detailed policy and design work on action and payment initiation
• Cyber security improvements across all CDR agencies to reflect the evolving data landscape
• Expanding awareness of CDR as a trusted, safer data-sharing model that allows consumers to easily identify CDR-enabled providers, products, and services

In a statement to Mortgage Business, a Treasury spokesperson said: “This pause in part responds to concerns that the CDR is expanding too quickly.

“Importantly, it allows time for the CDR to mature across the banking, energy and non-bank lending sectors and to implement lessons learnt from implementation.

“This will also give time to develop the action initiation framework that will apply across all sectors.

“A strategic assessment is also planned towards the end of 2024 to inform future expansions, including superannuation, insurance and telecommunications, as well as the implementation of action initiation.

“The CDR continues to be a deep partnership with industry designed to deliver a reliable, highly functional and trusted way for Australians to benefit from the consumer data collected about them.”

[Related: Incorrect interest rates in CDR data ‘key regulatory focus’: ACCC]