Although the Mandatory Comprehensive Credit Reporting regime is expected to commence for large banks from 1 July 2018 the National Consumer Credit Protection Amendment (Mandatory Comprehensive Credit Reporting) Bill 2018 has not yet been passed by Parliament. Background.

UPDATE 3 July 2018: The Bill was passed by the House of Representatives on 25 June but will not be considered by the Senate before 13 August.

Draft Regulations

Treasury has released an exposure draft of the Mandatory Comprehensive Credit Reporting Regulations for comment.

The draft Regulations:

• exclude information about the following types of accounts from being supplied within the mandatory regime: margin lending facilities, accounts without formal overdrafts, accounts that are being ‘run down’, novated leases and charge cards;
• specify a requirement for ongoing reporting under the mandatory regime: when there is new repayment history information and the eligible licensee has previously supplied mandatory credit information for that account and when there is new default information and the eligible licensee has previously supplied mandatory credit information for that account;
• place restrictions on credit reporting bodies from disclosing information they have received or derived through the mandated regime which was provided by a credit provider which is a signatory to the Principles of Reciprocity and Data Exchange (PRDE) and the PRDE would have the effect of restricting some or all of the information supplied;
•  set out the types of information that credit providers and credit reporting bodies must include in statements to the Treasurer; and
• set out circumstances when the Australian Securities and Investments Commission can issue an infringement notice for a civil penalty.

Senate Committee Report

The Senate Economics Legislation Committee published their report on the Bill on 5 June 2018, recommending the Government expedite its review of financial hardship arrangements and that the bill be passed.

Labor members of the Committee have called for a one-year delay to reporting of “repayment history information” (which includes a financial hardship arrangement).

There is concern that the credit standing of those customers who are unable to meet their repayment obligations due to financial hardship are likely to be detrimentally affected by Mandatory Comprehensive Credit Reporting as they are likely to be lumped together with those customers who simply don’t comply with their repayment obligations.

The Attorney General’s Department is reviewing the interaction between the mandatory credit information required to be provided under the CCR regime, specifically, the requirement to provide repayment history information (RHI) in accordance with section 6V of the Privacy Act 1988, and the hardship provisions contained under the National Credit Code.

The Privacy Act does not currently permit a credit provider to disclose to a credit reporting body the fact that an individual is in financial hardship

Consumer advocates argue that where there is a change to the payment arrangement with a consumer, and the consumer is meeting their payment obligations under this arrangement, then RHI should reset to zero.