Non-bank lenders to join CDR under first ‘open finance’ expansion

Pay-day loan companies and other non-bank lenders will be added to Australia’s data portability scheme under the federal government’s plan to expand the Consumer Data Right across the finance system.

Digital Economy minister Jane Hume (Pictured) in January flagged ‘Open Finance’ as the next sector to be designated under Australia’s Consumer Data Right (CDR). Open Finance will eventually also include merchant acquiring services, general insurance and superannuation.

But lenders without a banking licence are being prioritised to complement the existing CDR Open Banking scheme, with a formal consultation process opening on Tuesday.

“Industry and stakeholder consultation at every step of the way is an important feature of our pathway to an economy-wide application of CDR. It not only supports practical implementation and explores benefits, it also ensures we build a high-value and robust data access system together,” Senator Hume said in a statement on Tuesday.

Non-bank personal loans – including payday lending and cash advance providers, are being considered for inclusion, as are non-bank credit cards, home loans, consumer leases, margin loans and business financing. Separate consultations will be held for merchant acquiring services, general insurance and superannuation.

Lead agency Treasury is conducting the public consultations and is also required to consult consumer and privacy regulators about a sector before it can be added to the CDR scheme. Open Finance would join the original banking sector as well as energy and telecommunications in designation.

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Source: Non-bank lenders to join CDR under first ‘open finance’ expansion