ASIC has announced that it has adopted a temporary no-action position to enable large banks (‘eligible licensees’) to withhold the reporting of certain credit information on consumer credit reports where reporting the information could lead to consumer harm, including where a consumer may be the victim of family violence.
ASIC has also sent a letter to credit providers and lessors saying it does not intend to take regulatory action in relation to a credit provider’s failure to comply with obligations to provide to a joint debtor information about the other joint debtor if the other joint debtor is or was the victim of family violence, and the family violence may be, is or was being perpetrated by the other joint debtor(s) under the credit contract that is the subject of a hardship notice.
Credit reporting
Eligible licensees need to supply credit information under the mandatory comprehensive credit reporting regime. From 1 July 2022, comprehensive credit information also includes information about financial hardship arrangements (known as ‘financial hardship information’).
ASIC gives the example where a victim-survivor holds a loan jointly with their partner (who is the perpetrator of family violence) and they are experiencing hardship, there may be situations where a victim-survivor does not want their partner to know that they have agreed to a financial hardship arrangement with an eligible licensee.
In this circumstance, ASIC’s position will enable eligible licensees to help the victim-survivor by withholding financial hardship information on their (and their partner’s) credit report.
Notifying joint debtor of hardship notice
ASIC says compliance by credit providers and consumer lessors with giving notices under sections 72(4), 73(1), 177B(4) and 177C(1) of the National Credit Code could potentially raise risks for consumers (debtors) affected by family violence.
ASIC also does not intend to take regulatory action in relation to a credit provider’s failure to comply with the obligation to report significant breaches (under section 50A(1) of the National Credit Act) in respect of the conduct described above, as it relates to sections 72(4),177B(4) and 194 of the National Credit Code.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
