Norris backs shift in credit reporting law
With the Australian Law Reform Commission due to issue a discussion paper on its review of the Privacy Act, which includes the credit reporting rules, in the next few weeks, the big banks are starting to line up behind the push for a move to positive reporting.Commonwealth Bank chief executive Ralph Norris said at the bank's annual results briefing on Wednesday that he supported positive credit reporting, which involves the inclusion of more information in credit files than is presently allowed.Norris said there would have to be strong consumer protection measures to guarantee that more comprehensive files could not be used for predatory marketing purposes.Westpac, which has been very cautious in its approach to the question, has moved to a more accommodating position. Like the CBA, the bank is keen to avoid a situation where consumers fall prey to aggressive marketers as a result of any changes.Under the current negative model an individual's credit file contains name, address, employer details and a record of credit applications made by the person in the past five years. The file also includes information about defaults (payments overdue by 60 days or more) and the date any defaults were paid. Dishonoured cheques with a value of more than $100 are included in a credit file, as are bankruptcy orders, court judgements and "clearout listings", where the credit provider has failed to locate a debtor.The positive model being proposed would include all that information plus current credit account balance and limits, payment history (updated regularly), opened and closed accounts and more detailed information on applications.One practice that no one wants to see here is universal default, where a lender will re-price a consumer credit facility if the consumer defaults on another loan or line of credit.