| Entities | Australia (1) |
| Topics and Issues |
In April 2018, PERC issued a report, Fostering Competition Among Lenders: Mandatory CCR Unlikely to Work.
This report exposes key deficiencies with the exposure draft legislation that would mandate comprehensive credit reporting as a means to facilitate competition within the highly concentrated retail and commercial lending markets in Australia. Simple, effective, and costless (to the government and taxpayers) measures are offered to enhance the affects of the proposed mandatory comprehensive credit reporting (CCR) on competition among lenders and credit bureaus. The Australian credit information sharing system, even after a mandate as advocated by the government, would neither be “full-file” nor “comprehensive” as these terms are conventionally understood. It is argued that the current exposure draft leaves the door wide open for deleterious outcomes including diminished competition among credit bureaus and among lenders resulting in reduced access to credit for consumers and very small businesses and higher credit prices. These unintended consequences could be mitigated by policymakers making clear that they expect lenders capable of comprehensive credit reporting to report as such and to all the major national Australian credit bureaus. By going beyond the current scope of the exposure draft and including provisions mandating the reporting of account balances, permitting non-financial institutions to fully report customer payment data (rent, wireless telecoms, broadband, cable and satellite TV, gas, water, electric) to licensed nationwide credit bureaus, and expanding permissible uses of credit file data to include using predictive data for extending firm offers of credit, the Turnbull Administration and Parliament would demonstrate a clear commitment to promoting competition among consumer lenders and ensuring sustained growth in lending to the private sector, increased financial inclusion, and dramatically improved safety and soundness owing to increased systemic transparency