The Australian Competition and Consumer Commission proposes to grant 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.
Reforms to the Privacy Act in March 2014 have expanded the types of information on consumer credit that can now be shared. ARCA represents lenders and credit reporting bodies in Australia and has developed the principles in a process involving its members and stakeholders since July 2013.
The ACCC has received a large number of submissions in response to the application for authorisation from the industry, with general support for the application.
“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 said.
“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.”
Veda, a leading credit reporting body, has raised concern that the provisions are unduly prescriptive and that there will be adverse consequences for competition. Consumer advocacy bodies have also 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. However, these costs appear to be relatively small and offset by the cost savings and other benefits of these provisions,” Ms Rickard said.
The ACCC is seeking submissions from interested parties in relation to its draft determination, before making a final decision. Submissions are due by 14 August 2015.
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.