The Morrison government has re-introduced the National Consumer Credit Protection Amendment (Mandatory Credit Reporting and Other Measures) Bill 2019 after it was updated to include the recently announced changes to the reporting of hardship arrangements.
In its revised bill, the government has sought to introduce a new category of credit reporting information that would enable hardship information to be reported alongside repayment history.
According to the government, under the revised bill, consumers experiencing financial difficulty will be able to demonstrate their credit worthiness with more accurate reporting of their circumstances.
Following the announcement, Treasurer Josh Frydenberg said the CCR bill would improve access to finance, while also simplifying the lending process for both borrowers and credit providers and enhancing competition.
“The CCR regime will deliver benefits to both borrowers and lenders by providing access to a deeper, richer set of data, enabling them to better assess a borrower’s true credit position,” he said.
“This will drive more competition in the market by encouraging new entrants and smaller lenders, including innovative fintech firms, to compete for customers with positive credit histories.”
Mr Frydenberg added: “The CCR regime will enable improved competition and data-driven innovation that will allow consumers to get a better deal.”
Lenders have already begun integrating the CCR regime in their home lending processes.
The re-introduction of the CCR bill coincided with an announcement from Macquarie that it would commence using CCR in its home lending process from Thursday, 12 December.
The bank has updated its credit policy to support the introduction of CCR.
The changes, also effective 12 December, include:
- no longer requiring brokers to provide statements for loans that are being refinanced, with the exception of “limited circumstances” where CCR information is not available;
- assessing loan serviceability based on the higher of credit report limits or those declared in the loan application; and
- reviewing repayment history of up to 24 months on all facilities in its credit assessment.
According to Macquarie, its CCR regime will help reduce inefficiencies in the application process and improve turnaround times by providing brokers with a “more accurate servicing position”.