FinTech Australia calls for comprehensive credit reporting legislation to progress

FinTech Australia calls for comprehensive credit reporting legislation to progress

FinTech Australia, the peak industry body for the financial services, technology and innovation industry today expressed growing concern that further delays in securing the passage of the comprehensive credit reporting bill would hurt consumers and small businesses.

Despite a proposed 1 July 2018 implementation date, the legislation is still in the House of Representatives, with recent reports that lobbying by an unlikely partnership of consumer advocates and the banking industry is encouraging delays and calling for more time.

FinTech Australia CEO Brad Kitschke said that Australia had fallen behind other established markets in passing the bill and was surprised that consumer advocates would seek to delay something that would benefit consumers, increase transparency and result in more responsible lending practices as well as fairer access to credit.

“We are disappointed that there appears to be another delay in securing the passage of the comprehensive credit reporting legislation. It is ironic that that this legislation is being derailed and delayed by some consumer advocates, when consumers will be the overall beneficiary,” Mr Kitschke said.  

“Had this law been in place, some of the horror stories being heard at the banking Royal Commission would have been avoided. Access to credit, and an obligation by lenders and providers of credit to consider all the relevant information about a person’s ability to meet the obligations of a loan or line of credit should be seen as a good outcome in light of some of the poor practices being uncovered.

“Under the government’s proposed framework, earmarked to begin from 1 July 2018, major banks will be required to have 50 per cent of their credit data ready for reporting by September 2018, increasing to 100 per cent a year later. “

Mr Kitschke said that concerns by some consumer advocates that access to a comprehensive set of information about a consumer’s credit history would lead to inequality and unfairness were misplaced and he called on the consumer movement to offer alternative solutions instead of calling for a further delay.

“We are sympathetic to the views of consumer advocates who don’t want access to credit to be unfair or restricted based on historical information that may not be relevant or where it is not considered properly.  However, it seems nonsensical that some consumer advocates are asking for categories of information to be removed from the requirements that would weaken the rules.

“It’s entirely perverse that the delay is being championed by some consumer advocates, seeking changes that would weaken the laws, while standing in lock step agreement with the big banks and others who perpetrated the kinds of misdeeds that this legislation seeks to prevent.  

“Rather than suffer yet another delay, or take another year to rehash the same issues, it would simply be appropriate for those consumer advocates to offer solutions that would enable the passage of the bill. It’s not good enough to simply throw stones and highlight problems at this late stage.  It is time for all relevant stakeholders to double down and secure passage of this important legislation.”

Mr Kitschke also took the opportunity to question the motives behind some who are calling for a delay.

“As to why politicians are suddenly sympathetic to the views of the big banks, this seems rather at odds with many of their public protestations, especially as the issue of how credit is issued and what obligations lenders have sits at the heart of the banking industry’s many misdemeanours against the trust of the Australian public.“