Labor delays greater competition and consumer protections in financial services

Labor is delaying the establishment of a mandatory comprehensive credit reporting system that would increase competition and enhance consumer outcomes in the financial services sector, despite the major banks already voluntarily getting on board.

The measure will give lenders access to a deeper, richer set of data enabling them to better assess a borrower’s true credit position and ability to pay a loan.

With greater visibility, new entrants and small lenders, including innovative FinTech firms, will be encouraged to compete for small business and retail customers with positive credit histories.

With more data, borrowers with a previous negative credit event, such as a default, will also have greater opportunity to demonstrate their reliability.

Why Labor is delaying greater competition and protection for consumers is beyond belief.

Legislation is currently before the Senate that would enact the mandatory comprehensive credit reporting system; include accountability measures for credit providers and credit reporting bodies; and make enhancements to the security of consumer information.

Already, the major banks have committed to participate in the comprehensive credit reporting system as members of the ‘Principle of Reciprocity and Data Exchange’ – a move that the Coalition Government welcomes.

The major banks will provide more than 65 per cent of all household lending into the credit reporting system in the coming weeks, creating sufficient ‘critical mass’ to incentivise smaller credit providers to participate in the system.

While Labor stalls to the detriment of consumers, the Coalition Government is pushing ahead, increasing competition, enhancing consumer outcomes and creating a stronger economy.

/Public Release.View in full here.