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The new credit rules that began exactly six months ago appear to have gone unnoticed even though they are expected to eventually produce better credit assessments.
Positive Lending Solutions director Tom Caesar said the credit reporting rules that came into effect on March 12 hadn’t made any serious impact.
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“If the industry is serious about making major changes to the credit reporting rules they need to enforce the banks and lenders to make the changes,” he told The Adviser.
“At the moment, the banks and lenders have no incentive to make changes to the way they report on customers to Veda, so why would they spend money on something that isn't profitable?”
Homeloans relationship manager Andrew Crossley said he hadn’t noticed any visible changes in the past six months and hadn’t had any brokers ask him about the new credit regime.
“It’s like a sleeping giant that’s yet to awaken in the sense that it’s there, but I still don’t know which lenders may have implemented it or to what degree,” he said.
The new credit regime includes a new approach to correcting a credit report, a new procedure for listing defaults, and the ability for people to place bans on a credit report when they believe they may have been the victim of fraud or identity theft, according to the Australian Retail Credit Association (ARCA).
Chief executive Damian Paull told The Adviser that it was too soon to be drawing conclusions about comprehensive credit reporting.
Other countries that made similar reforms had to wait several years to see the benefits, he added.
“The next step is for industry to build a framework around reciprocity, meaning lenders will have more confidence in sharing their data, knowing they’re getting [similar] information back in kind,” Mr Paull said.
“ARCA is currently working to finalise this framework, and many of our members are reviewing their technological processes to accommodate the new comprehensive credit reporting system.”
Mr Paull said the system could be improved further if it became possible to see outstanding balances rather than approved limits.
He also suggested telecoms and utilities should be able to share repayment history, and Australian and New Zealand credit authorities should also be able to exchange information.
[Related: Borrowers mostly unaware of new credit rules]
