ARCA, ABA review Codes
The treatment of joint accounts and the sensitive topic of financial abuse feature in an overhaul of the Credit Reporting Code.
The Australian Retail Credit Association yesterday published proposed changes to the Code and is now undertaking public consultation.
The Australian Banking Association this morning also announced it has commissioned an independent review of the Banking Code of Practice and the review is now calling for submissions.
The National Consumer Credit Protection Amendment (Mandatory Credit Reporting and Other Measures) Act 2021 was passed in February 2021 and provided for a new form of ‘financial hardship information’ to be included in the credit reporting system from 1 July 2022.
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Financial hardship information will be exposed on consumers’ credit reports for the first time after the passing of a bill on credit reporting.
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National Consumer Credit Protection Amendment (Mandatory Credit Reporting and Other Measures) Bill 2019 was passed yesterday and would establish a mandatory comprehensive credit reporting regime and provide that a credit provider could not refuse to provide further credit or reduce a customer’s credit limit because financial hardship information existed.
However, Financial Rights Legal Centre chief executive, Karen Cox, was concerned the visibility of their hardship information would deter people from seeking assistance. Information would be retained for 12 months regardless of the time spent in hardship, a particularly important fact when thousands were forced to take hardship deferrals during the recent COVID-19 pandemic which could later affect their credit rating.
Financial Rights Legal Centre
It comes as the Government has introduced a bill to repeal the very same safe lending protections it used to justify exposing financial hardship information in the first place.
Seeking a repayment arrangement from your lender because of a temporary set-back has until now been a matter between banks and their customers.
Financial Rights Legal Centre Chief Executive Officer Karen Cox said the passing of this bill means that financial hardship information will be retained on a person’s credit report for twelve months or more, even if an individual is only in hardship for a very short time.