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Privacy Act warnings equal 'scare mongering': Gadens

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Australian Broker | 28 Jun 2013, 07:00 AM Agree 0
While amendments to the Privacy Act will certainly have an impact on brokers and their clients, one top lawyer says the changes will be overwhelmingly positive
  • Noel | 28 Jun 2013, 10:46 AM Agree 0
    Funders will always want to lend. This is where they get their profit. It will now be a matter of a higher price for borrowers who do not have a clear history
  • Andrew | 28 Jun 2013, 10:51 AM Agree 0
    The "how can I reject this application" credit staff will love this change but the banks will be hobbled into not lending anything and that will hurt them. I have always said that if banks knew the absolute truth about every applicant, they would never write a damn thing!
  • Gary | 28 Jun 2013, 11:05 AM Agree 0
    A great view from Gadens!

    It is clear to me that comprehensive reporting will make it easier for good borrowers to get credit, and tougher for high-risk applicants to get any.

    Brokers should find it easier to get quality deals over the line, and there should be less sob-stories on Today Tonight crying "it's the banks fault for lending me the money!"
  • Jeff | 28 Jun 2013, 11:19 AM Agree 0
    Keep it going....soon we will have restricted enough credit in enough ways to make our economy the envy of the worl...er....Greece
  • Jeff | 28 Jun 2013, 11:41 AM Agree 0
    .
  • PeterT | 28 Jun 2013, 12:19 PM Agree 0
    I'd encourage lenders to maitain their existing credit criteria for 6-12 months whilst they collate data around the new credit reporting. Detailed credit reporting is a good thing, but lenders overreacting could simply mean many decent loans approved today, could get declined tomorrow. An over reaction doesn't help anyone.
  • Mark | 28 Jun 2013, 12:47 PM Agree 0
    I agree with Noel on the funders wanting to lend and indeed there will be a higher price for those that do not have a clear history but this will create a multi tiered system which will make it nearly impossible for a broker or client to determine what lender will provide the best/ not unsuitable product for the clients circumstances. lenders already have the mechanism of lodging a default notice generally after 90 days, effectively this will occur after 5 days now. I don't think the people writing these laws realise the depth of people that it will affect and the knock on affect that will have on the economy overall. Telcos are bad enough now and there are enough uninformed people making bad credit decisions that will be forced into worse decisions. Maybe I just work in the wrong end of town to often but these guys are the consumers and without consumers you don't have an economy. we are only just starting to get over the last credit contraction and its affects so this seems like madness to me
  • Tim H | 28 Jun 2013, 04:15 PM Agree 0
    The tightening of credit occurred when the Privacy Act was first introduced and again when NCCP was introduced.
    We will see it happen again once these new credit reporting guidelines come in to effect.
    Be prepared for initial tough stances by lenders until they get used to and start to realise that they can't knock back more loans than they approve.
    The non-conforming lenders will have a great time of it. Price for risk will become the norm.
    From a brokers perspective there will be a greater emphasis on really getting to know your client so you don't waste too much of your time.
  • Graham Doessel MyCRA Pty Ltd | 03 Jul 2013, 01:29 PM Agree 0
    It was interesting to see the comments from Gadens. Especially since they have been around the finance game for a while now.
    I see the changes as an opportunity for creditors to "risk assess" and "load" the rates on more loan products for petty reasons and then say "Sorry, it's an automated process, we are HAPPY to offer the finance but unfortunately it'll be a a higher rate".
    This in its self is not a bad thing in general, I can just see it being abused with a 1/4 of a % for one only 5 day late payment (for example) and maybe a 1/2 for 3 or more and up it goes...
    Easy to justify with this new legislation...

    I started campaigning against this legislation when (as it still is in legislation today) it was released with the reporting to start from ONE DAY late.
    The new proposed changes reflect my recommendations and those of others to change the reporting period from ONE DAY to FIVE days. This is an improvement on what I see as a flawed approach to reform.

    The view that this is a "POSITIVE" step is in my view, only positive for the creditors... Not the average broker or the average client.

    It is simply more NEGATIVE reporting, more black marks added to a persons credit report with no ability for the consumer to self correct or improve their credit score by positive action being recorded.

    The CRIAA (www.criaa.org.au) forwarded a submission with additional proposed changes in an attempt to further address concerns of the industry and those of consumers.

    I am happy to share and discuss this openly with anyone that would like to know more.
  • Philip | 23 Aug 2013, 01:44 PM Agree 0
    This legislation is insane in relation to the late payment status! Any business who provides $150 for 7 days, and the consumer is late 5 days will receive a late payment. think about how far this will reach. 70% of businesses pay their accounts late. Lending will be very difficult when most people will be listed as late payers. Whats more this is recorded for 2 years, which is excessive considering mortgage loans for refinance are only looked at for 12 months. This has gone too far and needs to be wound back. Who is to gain from this? ah there it is. The collection agents and the listing agents now have everyone running around to be part of it - they gain we all lose!
  • Philip | 23 Aug 2013, 01:46 PM Agree 0
    This legislation is excessive in relation to the late payment status! Any business who provides $150 for 7 days, and the consumer is late 5 days can list a late payment. think about how far this will reach. 70% of businesses pay their accounts late. Lending will be very difficult when most people will be listed as late payers. Whats more this is recorded for 2 years, which is excessive considering mortgage loans for refinance are only looked at for 12 months. This has gone too far and needs to be wound back. Who is to gain from this? ah there it is. The collection agents and the listing agents now have everyone running around to be part of it - they gain we all lose! You have no privacy anymore!
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