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New rules to expand the Consumer Data Right to non-bank lending will “help prevent fraudsters from impersonating mortgage brokers”, according to an open banking specialist.
In November, the Albanese government published updated rules on how the CDR will expand to non-bank lending for consultation. The updated draft amendments, which were built following stakeholder engagement, include measures to limit costs to non-bank lenders and initial measures to reduce compliance costs for the banking sector.
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While final rules have not yet been released, the CDR is expected to expand to non-bank lending in “early 2025” and be operational by mid-2026.
Jessica Booth, chief operating officer at open banking specialist start-up Biza, has told The Adviser that incoming changes to the Consumer Data Right (CDR) should benefit brokers and customers.
Speaking to The Adviser about the expansion of the regime, Biza’s chief operating officer said it is critical for the sector to prepare now, rather than waiting for final details.
She added that the expanded regime would likely benefit brokers, saying: “Bringing non-bank lenders into the CDR completes a consumer’s financial profile.
“Most Australians have a store card, retailer-related credit card or a car finance loan. Those credit cards and car finance loans are generally offered by non-bank lenders, which has meant a consumer couldn’t use the CDR to share that data when working with their broker for a loan or using a personal financial management or budgeting tool.
“Currently, this data can only be shared by manually downloading and forwarding statements or ‘screen scraping’, which involves consumers sharing their usernames and passwords.
“Bringing non-bank lenders’ data into the CDR gives brokers and the consumers they work with the same access that they now have to share their banking data and find better deals for consumers.”
Booth also flagged benefits to cyber security that new rules should bring.
“Another important point is the robust security measures built into the CDR,” she said.
“The industry has invested heavily in creating high-grade security protocols that go far beyond the traditional username and password systems.
“These additional layers of protection help prevent fraudsters from impersonating mortgage brokers or banks and non-bank lenders, making the process safer and more reliable.”
When are new rules coming?
A mandate for non-bank lenders to enter the CDR regime is expected to be announced in the coming weeks.
According to the Treasury, sharing obligations for product data will apply from 13 July 2026, followed by consumer data sharing obligations in four phases from 9 November 2026 until 13 September 2027.
It will begin with the largest non-bank lenders and non-complex data requests.
While the CDR has been plagued with delays and errors in data reporting and low consumer take-up over the years, the federal government recently undertook a ‘reset’ of the open banking system aimed at making it easier for consumers to use the CDR.
In November, changes to the CDR legislation began, including the ability for consents to be bundled, a simplification of requirements when asking for consents, and an expansion of the energy trial.
Following the announcement, several members of the broking and fintech industry welcomed the move, saying that the changes could accelerate the use of CDR-enabled products, including home loan applications and reprice/refinance requests.
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