The Treasurer has announced that the Government will legislate for a mandatory comprehensive credit reporting regime to come into effect by 1 July 2018.
According to the Treasurer currently less than 1 per cent of credit data is being reported.
The four major banks will be the first to be required to report; they account for approximately 80 per cent of the volume of lending to households.
The four major banks will be required to have 50 per cent of their credit data ready for reporting by 1 July 2018, increasing to 100 per cent a year later.
The Government will consult further on whether to mandate additional institutions being included on a phased in basis as well as on the implementation mechanisms for this decision, including the legislation.
The Government believes its decision will lead to greater competition in lending and provide better access to finance for Australian households and small businesses.
The Australian Retail Credit Association’s Principles of Reciprocity and Data Exchange (PRDE) is a set of industry-developed data exchange rules to support the move of Australia’s credit reporting towards a comprehensive system. The PRDE facilitates sharing of credit reporting information among signatories by setting up a reciprocal data exchange.