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7 March 2018
The upcoming Comprehensive Credit Reporting (CCR) reforms must be fair for all and ensure Australians who have experienced past financial difficulties are not discriminated against.
A mandating of CCR will change the way banks share customer information, resulting in greater competition and better deals for customers with a good credit history.
Unlike the current system, in which only loan applications and loan defaults are recorded and used to assess an individual’s credit rating, the Federal Government’s new mandate will require banks to provide a customer’s full repayment history.
In its submission on the draft legislation on the new CCR regime, the Australian Banking Association has called on the Government to ensure banks are able to properly explain a customer’s credit history in detail, particularly if the customer has encountered financial hardship and missed a payment. Banks often come to arrangements with customers when they experience periods of financial difficulty. This should not be seen as a red flag for a bad credit history, but rather a common occurrence that can happen to any customer through no fault of their own.
CEO of the Australian Banking Association Anna Bligh said that while there was potential for a big win for customers in these reforms, it was important to get it right to ensure no one was discriminated against.
“As with all major reforms, it’s important it’s done right with no discrimination against people who have experienced financial difficulty but have worked with their bank to find a solution,” Ms Bligh said.
“People can fall into financial hardship for many reasons, such as natural disasters, prolonged drought, the loss of a job or the death of a partner.
“Banks have extensive and generous programs for customers experiencing financial difficulty and always stand ready to find a solution which will work for the customer.
“This draft legislation does not allow banks to properly communicate special circumstances surrounding a customer’s missed payment or other issue which may be seen as a bad credit history.
“There needs to be an easy way to flag this in a customer’s history to ensure they aren’t unfairly denied access to credit when they have ticked all the right boxes by working with their bank when encountering problems paying back their debts,” she said.
For more information please click here to access the ABA submission.
Contact: Rory Grant 0475 741 007