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Time ripe for comprehensive credit reporting: ABA

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Australian Broker | 24 Aug 2009, 12:00 AM Agree 0
If the National Consumer Credit Protection Bill 2009 will include responsible lending obligations, then according to The Australian Bankers' Association (ABA) more comprehensive credit reporting must be put in place at the same time.

  • SteveOZ | 24 Aug 2009, 08:24 PM Agree 0
    Crickey. I saw this in the US and it was pretty awesome. They know EVERYTHING! Credit card balances, late Gym membership fees, late utility bill payments, you name it. It is a good idea but like all good ideas it will be corrupted. Once this is in, it will be rate for risk, which makes sense, but looking back it didn't stop bad debts in the US, or protect anyone. And you can bet your bottom dollar the best rates will start where the are now and head North. There is nothing in this for the consumer, but everything in it for the banks. Oh well....we should be used to that by now!
  • Barry Stamp | 24 Aug 2009, 10:25 PM Agree 0
    Consumers are paying the price at the moment for not being judged on positive credit history - for example, our credit card costs are high when compared to the UK or USA where annual fees went out the window long ago. At the moment the Australian credit reference agencies hold so little information, you have to bear in mind that to get positive reporting going, it will take IT development time of a couple of years and then five years longer to build up a database of credit history - and that assumes that Australia's credit industry adopts the same format for reporting as is used in the UK and USA (basically the same, both stemming from the old TRW data format) - and adopts the same shared data rules. To give just one example of the sort of issue I'm talking about - the UK's Rules of Reciprocity, which governs how shared data can be used, took about 5 years to be agreed within the credit industry, so there's a lot of work to do. For everyone's sake I'd like to see this initiative live in 2011 but somehow, I don't think so. Finally we also need a paradigm shift in allowing consumers access to credit reports to check for accuracy as there is likely to be a lot of cynicism around. The current processes are good in one respect, they are free offline at least, but we need a big kick to bring us up to speed to match the online credit reports that consumers have instant access to in other developed countries.
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