ACCC Proposes Authorisation Of System For Credit Reporting
The ACCC has proposed to grant authorisation for five years to the Australian Retail Credit Association (ARCA), which represents lenders and credit reporting bodies, in relation to “principles for exchanging comprehensive consumer credit data between signatory credit reporting bodies and lenders”.
ARCA has developed the principles in a process involving its members and stakeholders since July 2013, the ACCC noted.
The ACCC stated there has been general support for the application for authorisation, with a large number of submissions received.
“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 commented.
“The ACCC considers that the provisions will help overcome a 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.”
Credit reporting body Veda has raised concern that the provisions are unduly prescriptive and that there will be adverse consequences for competition, the ACCC noted, with consumer advocacy bodies also having raised concerns about recording repayments under financial hardship arrangements.
“The ACCC accepts that there are some potential public detriments arising from the costs imposed by the provisions,” Rickard stated. “However, these costs appear to be relatively small and offset by the cost savings and other benefits of these provisions.”
The ACCC is seeking submissions from interested parties in relation to the draft determination before making a final decision, with submissions due by August 14.