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The ACCC has revealed examples of the types of business loans that could be included in the scope of the newly expanded Consumer Data Right.
In December 2020, the Consumer Data Right rules were amended to enable more business customers of banks to use it and share their data with accredited data recipients.
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As such, CDR will be expanded to non-individuals (such as companies) and more business partnerships from 1 November 2021, starting with the primary brands of the major banks.
The Australian Competition and Consumer Commission (ACCC) has now reviewed its guidance on the type of products that could be shared under the updated CDR and how it would apply.
The products are generally limited to those that are publicly offered products (for example, those with standard form contracts).
Business loan/finance products that require a high level of negotiation between the lender and the customer (in particular where a product is especially designed, or highly customised, for the customer) the more likely the product is out of scope for the CDR.
Further, loans that require a large amount of negotiation – only offered to institutional and wholesale banking clients or only available only via a relationship manager – are unlikely to fall under the scope of the amended CDR, the ACCC suggested.
While the ACCC said it was up to the data holders (i.e. the banks) to consider whether their products fall within the scope, it provided the following examples for illustrative purposes:
- Loans that can only be used for business purposes, whether secured or unsecured, and have low levels of negotiation, are advertised on the bank’s website, can be obtained by means other than via a relationship manager, and are not restricted to large corporate or wholesale customers;
- Lines of credit that can be drawn on by a business if and when needed for a specified term, whether secured or unsecured, and that have low levels of negotiation, are advertised on the bank’s website, can be obtained by means other than via a relationship manager, and are not restricted to large corporate or wholesale customers; and
- Equipment/asset finance loans that meet the above criteria and also holds the asset as security until the business’ repayments are completed.
[Related: The opening up of data]
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