It calls for faster, more practical reforms but warns some proposals could backfire
The Australian Retail Credit Association (Arca) is calling on the federal government to prioritise reforms to modernise the nation’s credit reporting system, following the release of the Final Report from the Review of Australia’s Credit Reporting Framework.
The recently published report summarised the findings of an independent review into the system and identified the need for significant updates to improve access to data and consumer outcomes, including streamlined corrections processes.
Arca chief executive Elsa Markula (pictured above) welcomed the recognition of the need for modernisation, but expressed concerns about some recommendations in the report.
“Several recommendations would, if implemented, have exactly the opposite effect of the outcomes the review was intending to achieve,” Markula said.
The industry body commended the government’s decision to undertake further consultation before finalising any reforms, emphasising that swift action was essential to align Australia’s credit reporting system with global standards.
“Australia’s credit reporting system is behind much of the developed world,” said Richard McMahon, Arca’s general manager of government and regulatory. “We know there is plenty to be gained from quickly implementing reforms which allow the credit reporting system to better support both lenders and consumers.”
The review, conducted within a six-month timeframe, raised concerns about whether all key issues had been fully considered. Arca pointed to specific recommendations that it argued could hinder progress.
One example cited was the proposal to eliminate the Privacy (Credit Reporting) Code (CR Code), a regulatory tool developed by Arca and approved by the Office of the Australian Information Commissioner. The CR Code provides detailed guidance on legal obligations and has been updated regularly to reflect changes in the market.
“The CR Code has been one of the most effective parts of the legal framework,” Markula said. “Its flexibility and responsiveness have allowed the system to adapt without requiring lengthy regulatory updates, which have been slow in the past. We strongly believe the CR Code should remain a cornerstone of the system.”
Arca also raised concerns about the report’s suggestion to implement a “soft enquiries” framework, which would allow lenders to access certain credit information to provide price quotes without affecting a consumer’s credit score.
While the review recommended embedding the framework in the Privacy Act, Arca argued that its own version of the framework could be implemented more efficiently through the CR Code.
“A clear, consistent soft enquiries framework would benefit consumers – allowing more shopping around without affecting credit reports – while also giving industry more certainty about their obligations,” McMahon said. “The current issues around soft enquiries need a quick resolution; the path proposed by the review is not the best way forward.”
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