This out from one of the aggregators today
Earlier this month, Senator Joe Ludwig, Special Minister of State, announced proposed reforms to the Privacy Act and Regulations. An exposure draft of the legislation will not be available until early next year.
In respect to credit reporting, in a nutshell, the proposed reforms introduce “positive” credit reporting.
The proposed introduction of five “positive” datasets in an individual’s credit report file would enable a more comprehensive assessment of a person’s credit risk. The “positive” datasets are:
• The type of each credit account opened (eg mortgage, personal loan, credit card);
• The date on which each credit account was opened;
• The current limit of each open credit account;
• The date on which each credit account was closed;
• The credit repayment history (including whether in the past two years the individual was meeting repayment obligations).
However, credit repayment history data won’t be available until responsible lending obligations under the proposed National Consumer Credit Protection Bill 2009 (NCCP Bill) begin in January, 2011. There will be special rules to ensure appropriate use of this sensitive data. The period from when repayment history may be reported will commence in April 2010.
Current credit reporting is “negative”, therefore more limited, eg, it only includes information about overdue accounts (defaults) plus any applications for credit.
For brokers, mortgage managers and credit providers, the changes should mean there is more information available for the assessment of a consumer’s financial situation and thus meet responsible lending obligations. However, it may also mean some consumers are refused credit or are offered less.
Responsible lending is of course a key plank of the NCCP and is designed to ensure that consumers are not provided or suggested unsuitable credit for their circumstances.
Earlier this month, Senator Joe Ludwig, Special Minister of State, announced proposed reforms to the Privacy Act and Regulations. An exposure draft of the legislation will not be available until early next year.
In respect to credit reporting, in a nutshell, the proposed reforms introduce “positive” credit reporting.
The proposed introduction of five “positive” datasets in an individual’s credit report file would enable a more comprehensive assessment of a person’s credit risk. The “positive” datasets are:
• The type of each credit account opened (eg mortgage, personal loan, credit card);
• The date on which each credit account was opened;
• The current limit of each open credit account;
• The date on which each credit account was closed;
• The credit repayment history (including whether in the past two years the individual was meeting repayment obligations).
However, credit repayment history data won’t be available until responsible lending obligations under the proposed National Consumer Credit Protection Bill 2009 (NCCP Bill) begin in January, 2011. There will be special rules to ensure appropriate use of this sensitive data. The period from when repayment history may be reported will commence in April 2010.
Current credit reporting is “negative”, therefore more limited, eg, it only includes information about overdue accounts (defaults) plus any applications for credit.
For brokers, mortgage managers and credit providers, the changes should mean there is more information available for the assessment of a consumer’s financial situation and thus meet responsible lending obligations. However, it may also mean some consumers are refused credit or are offered less.
Responsible lending is of course a key plank of the NCCP and is designed to ensure that consumers are not provided or suggested unsuitable credit for their circumstances.
