The Australian Competition and Consumer Commission has granted authorisation for five years to the Australian Retail Credit Association Ltd (ARCA) in relation to principles for exchanging comprehensive consumer credit data between signatory credit reporting bodies and lenders.
ARCA represents lenders and credit reporting bodies in Australia and has developed the principles in a process involving its members and industry since July 2013. This follows reforms to the Privacy Act which expand the type of consumer credit information that can now be shared.
The ACCC received a large number of submissions from industry in response to the application and its draft determination, with general support for the principles.
“Access to more consumer credit information will allow lenders to make better credit decisions, with resulting benefits for consumers in the form of greater financial inclusion for consumers and assisting to reduce consumer over-indebtedness,” ACCC Deputy Chair Delia Rickard said.
“This will lead to increased competition between credit reporting bodies and between lenders, and assist lenders to comply with their responsible lending obligations at less cost.”
The ACCC has considered a concern raised that some provisions are unduly prescriptive and will impose costs on smaller credit providers who wish to have an agreement with more than one credit reporting body. Also consumer advocacy bodies want to include provisions 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. However, these costs appear to be relatively small and offset by the cost savings and other benefits of these provisions,” Ms Rickard said.
“Each credit provider will make a commercial decision whether or not to provide data and consume data from multiple credit reporting bodies.”
“ARCA is working to resolve the issues around reporting of financial hardship arrangements, and will need to involve industry and relevant regulators. The ACCC will be keen to see this matter resolved in assessing any application for re-authorisation.”
Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
More information about the application for authorisation is available at Australian Retail Credit Association Ltd Authorisation A91482