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John Kavanagh
Banking Day
Senior Report: Consumer Lending
04 March 2019

NAB is the first of the big banks to provide comprehensive data on mortgage contracts to credit reporting agencies, bringing the proportion of consumer credit accounts in the CCR system up to around 50 per cent.

The Australian Retail Credit Association said that commitments given by credit providers to supply comprehensive data during the course of this year will bring the proportion up to 80 per cent.

The CCR system got a kick along last year when the government announced it would amend legislation to make the comprehensive system mandatory for the big banks. The new rules required the Big Four to supply 50 per cent of their consumer credit information within 90 days of 1 July 2018 to credit reporting bodies.

And within 90 days of 1 July 2019 those banks would need to supply credit information on their remaining accounts.

The amendment was passed in the House of Representatives in June and was introduced into the Senate, where it is still awaiting a vote.

Despite the fact that the bill has not made it into law, the big banks committed to meeting those commitments. Commonwealth Bank posted a notice on its website last year, which said: “Whether CCR becomes legislation or not, CommBank will still participate in CCR.”

Westpac posted a notice, which said: “Customers with a Westpac credit card, personal loan, Flexi Loan, permanent overdraft account, home loan or car loan will see a change to their credit report, with the inclusion of comprehensive credit information for those accounts between September 2018 and September 2019.”

ARCA said that in September the big banks started sharing comprehensive credit card and personal loan account data. NAB is the only one to move on mortgages so far.

ARCA chief executive Mike Laing said other credit provider participating in the comprehensive system include Citibank, HSBC, Bank Australia, Latitude, Teachers Mutual Bank, MyState and Newcastle Permanent. A number of fintechs are also involved.

One sticking point that has not been resolved is the treatment of credit contracts where the borrower has asked for hardship assistance. The Financial Ombudsman Service ruled on a case, where it said a contract amended under hardship provisions was, in effect, a new contract and could not be reported as being in arrears.

Laing says there are a many situations where the contract is not amended but payment arrangements are changed. In such cases the industry wants the credit file to reflect this. The Attorney-General’s Department has reviewed the issue but has not released its report yet. Laing says lenders are holding back hardship accounts from comprehensive reporting until the matter is resolved.

Under comprehensive credit reporting rules, which were introduced in 2014, the following additional information can be added to credit files:

  • the date a credit account was opened;
  • the type of credit account opened;
  • the date a credit account was closed;
  • the current limit of each open credit account; and
  • repayment performance history, including information about late payments.

This is in addition to the old “negative” reports, which could include the following:
payment on a credit contract is at least 60 days overdue;

  • a cheque for $100 or more has been dishonoured twice;
  • a bankruptcy order has been made against the individual;
  • a credit provider considers that the individual has committed "a serious credit infringement"; and
  • details of recent credit inquiries by the consumer.

 

Digital Agency: Spark Green

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