Consumers to reveal all to banks
(16 October 2009 – Australia) The Federal Government has accepted most of the Australian Law Reform Commission’s (ALRC) proposals to change the Privacy Act; changes which will give banks and credit agencies more information to assess a customer’s credit worthiness.
There are five significant changes for banks that will give banks an opportunity to assess credit candidates more closely before making lending decisions.
Firstly, the banks will be able to access information about the type of current credit accounts. Also the date of each of the current accounts opening will be available.
Next, the changes to the Privacy Act will allow banks to view the credit limit of each account, end dates relating to any credit accounts that have been closed and credit repayment history.
The provisions relating the reporting of the credit repayment histories is to be determined and will only be if the government is satisfied that there is adequate framework imposing responsible lending obligations.
David Bell, chief executive, ABA, said that the banking industry agrees with the ALRC recommendations, because it will give lenders and credit providers more information to assess a customer’s credit worthiness based on their existing credit history.
Mr Bell also highlighted that this will enable lenders to see an accurate picture of a customer’s indebtedness, allowing lenders to make better informed and fairer lending decisions.
The comprehensive reporting system will be in place by 2011 and will coincide with the responsible lending provisions of the National Consumer Credit Protection Bill.
Firstly, the banks will be able to access information about the type of current credit accounts. Also the date of each of the current accounts opening will be available.
Next, the changes to the Privacy Act will allow banks to view the credit limit of each account, end dates relating to any credit accounts that have been closed and credit repayment history.
The provisions relating the reporting of the credit repayment histories is to be determined and will only be if the government is satisfied that there is adequate framework imposing responsible lending obligations.
David Bell, chief executive, ABA, said that the banking industry agrees with the ALRC recommendations, because it will give lenders and credit providers more information to assess a customer’s credit worthiness based on their existing credit history.
Mr Bell also highlighted that this will enable lenders to see an accurate picture of a customer’s indebtedness, allowing lenders to make better informed and fairer lending decisions.
The comprehensive reporting system will be in place by 2011 and will coincide with the responsible lending provisions of the National Consumer Credit Protection Bill.
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