Celia Hammond (Curtin, Liberal Party) Share this | Hansard source

I'm pleased to speak in support of the National Consumer Credit Protection Amendment (Mandatory Credit Reporting and Other Measures) Bill 2019. The government has consulted widely with credit providers and consumer groups in relation to this bill, and all are supportive. The bill is another example of the reforms implemented by this government that are designed to increase competition in the financial sector. The bill is going to implement the government's comprehensive credit-reporting regime and will place Australia in line with many other developed nations who already have comprehensive credit-reporting regimes in place—this includes the US, the UK and New Zealand. This regime will provide benefits to lenders and borrowers while also preserving and enhancing important security and consumer protections. It will also increase competition in the lending market by reducing the credit data advantage held by the major banks.

Consumers are going to have better access to credit, and those with a reliable credit history will be able to use this to seek more competitive rates. Those consumers who possess a poor credit rating will be able to demonstrate their credit worthiness through future consistency and reliability. Credit providers will have a more complete picture of a consumer's financial situation. This will help them to better price credit, better assess risk and meet the responsible-lending obligations.

Schedule 1 of this bill amends the credit act to establish a mandatory, comprehensive credit-reporting regime which will apply from 1 April 2020. It does this through requiring our largest banks, those with total resident assets of over $100 billion, to provide comprehensive credit information to credit reporting bodies from 1 April 2020. By mid-2021 our largest banks will have supplied comprehensive credit information on all consumer accounts to every eligible credit reporting body.

This bill, importantly, is also going to ensure the security of consumer credit information. That's an issue of high importance to this government, and data privacy is an issue of grave and significant importance to all Australians. This bill is going to strengthen the already strict provisions of the Privacy Act relating to how consumer credit information is handled. The current provisions in the Privacy Act regarding disclosure and use or collection of credit information are maintained. This amendment is not going to affect those, but this bill is going to add to the protections in a number of ways, including, firstly, requiring credit providers to satisfy themselves that a credit reporting body is meeting reasonable security standards before they supply their customer data, and, secondly, requiring credit reporting bodies to store credit information within Australia and external territories or according to alternative security requirements in regulations for storage outside Australia, if established—if the regulations are put in place.

As I said before, while people are happy accessing and providing information, people are very concerned about what their data and information are utilised for. This particular bill will enhance the existing protections relating to credit. It should also be noted that the Australian Securities and Investments Commission is going to enforce the new mandatory regime. Where credit providers and credit reporting bodies are subject to requirements under the bill, they will be subject to penalties if they fail to comply.

Schedule 2 of the bill incorporates the results of a review by the Attorney-General into the treatment of financial hardship information, providing the legal certainty required for this information to be shared. Based on this review, the bill establishes a new type of credit information in the Privacy Act that will indicate consumer credit contracts affected by a financial hardship arrangement. To ensure that consumers are not unfairly disadvantaged by this change, the bill will amend the credit act to prevent banks from using financial hardship information as the sole reason for freezing an existing credit account or reducing a credit limit on an existing credit account. The bill will also prevent credit reporting bodies from incorporating financial hardship information into credit scores. This should assuage any concerns that consumers have with respect to their data.

The Office of the Australian Information Commissioner will continue to oversee the entire credit reporting system, including receiving and attempting to resolve complaints about the mishandling of or inaccurate credit information. The OAIC has the power to investigate, order compensation and issue fines.

As with most laws, a balancing act needs to be taken. In this case, as with everything that came out of the Hayne royal commission, we want to make sure that there's not an undue restriction on people's access to credit. As has been noted before, particularly in light of the disasters and the tragedies that happened throughout the end of last year and the beginning of this year, it is important for our small businesses and our families to have access to credit and to not have that access restricted. At the same time, and to balance that, we need to measure it against irresponsible lending practices and risky borrowing. This bill achieves that. It will set up a framework that will make sure that that balance is actually attained. To that end, I commend this bill to the House.

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