New credit rules: What the banks will have to tell credit bureaus come July 1
The Big Four will have to supply 50% of new credit data by mid-2018.
The Treasury has released more details of what we can expect with comprehensive credit reporting when it comes into effect on 1 July 2018. The regime, originally introduced in March 2014, saw a sluggish take-up from the major banks and was mandated by Federal Treasurer Scott Morrison in November 2017. This mandate only applies to the Big Four banks but the expectation is that others will follow suit to remain competitive.
Yesterday, the Treasury released an exposure draft legislation to implement the mandate. The legislation details what the banks need to do by July 1 to comply with the legislation, what data they need to provide and what data they need to continue to provide based on certain "events" occurring.
Interestingly, as the big banks only need to supply 50% of comprehensive data, the legislation says they will be able to select which accounts they provide the new data for.
The legislation said the banks will have 90 days from 1 July 2018 to supply mandatory credit information for 50% of a consumer's eligible accounts to each eligible credit reporting body. If they fail to do so, they will be fined.
For consumers, this means that you may see additional information for some accounts on your credit file, but not for others. Comprehensive credit information that you may now find being listed includes payment history information and the amount and type of credit you applied for. You can find a full list of the new information that will be included in our guide.
The exposure draft legislation also detailed what the banks must do regarding the ongoing supply of this new credit information, which included the following:
|If this happens:||The banks must do this:|
|The payment of an overdue payment which default information has been supplied||Supply payment information relating to the payment|
|The opening (or re-opening) of an eligible credit account||Provide mandatory credit information for the account|
|The closing of an eligible credit account||Give details of the closing of the account|
Banks will be required to share 100% of mandatory data by 1 July 2019, and will also have a 90-day window to provide the new information to credit reporting bodies.
You can read the exposure draft legislation on the Treasury's website, and you're able to submit responses to the consultation up until 23 February 2018.