The motivation behind the announcement appears to relate more to interpretation of the current legislation rather than the legislation itself. As such, consideration of how the new provisions are interpreted by all stakeholders will be critical to achieving the desired benefits.

“These reforms are designed to help streamline the borrower’s experience, helping to free up credit for credit-worthy consumers. Not only could the changes reduce the burden faced by borrowers when seeking loans but also help to reduce barriers to switching lenders”, said Kevin James, General Manager Advisory and Solutions, Equifax.

“The Treasurer highlighted in his statement that protections will be increased for vulnerable consumers. This is important; the credit framework will need to strike a balance so that it prevents exploitation by both credit providers and consumers”, James added.

This proposed reform, together with improved data availability through Comprehensive Credit Reporting and Open Banking (Consumer Data Right), will allow lenders to streamline lending assessment with confidence that they have a complete view of a consumer’s financial situation.

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