ASIC has adopted a temporary no-action position that will enable large banks (eligible licensees) to withhold the reporting of certain credit information on consumer credit reports where reporting the information could lead to consumer harm.
Under the mandatory comprehensive credit reporting regime, eligible licensees are required to supply comprehensive credit information about consumers to credit reporting bodies.
From July 1, comprehensive credit information also includes information about financial hardship arrangements. Also called “financial hardship information,” this will only include hardship arrangements relating to consumer credit contracts, such as credit cards, personal loans, and home loans. The information will only stay on a credit report for 12 months and does not include details of the arrangement or the reason(s) for the hardship arrangement.
ASIC received concerns from licensees that reporting certain credit information, such as financial hardship information, of victim-survivors of family violence could place those consumers at risk of further harm and that flexibility was required to protect vulnerable consumers.
For example, there may be a situation where a victim-survivor does now want their partner (who is the perpetrator of family violence) to know that they have agreed to a financial hardship arrangement with an eligible licensee. In this case, ASIC’s position will enable a bank to withhold the financial hardship information on their (and their partner’s) credit report, thereby helping the victim-survivor.
“ASIC recognises that these risks for victim-survivors could also arise when a credit provider or lessor notifies a joint account holder of the outcome of a victim-survivor’s request for hardship assistance in accordance with the credit provider or lessor’s legal obligations,” the corporate watchdog said. “Accordingly, ASIC has also adopted a no-action position that enables credit providers and lessors to withhold notices to joint account holders in these circumstances.”
The letter outlining ASIC’s no-action position is available here.
These positions are temporary and will remain in place pending consideration about whether permanent relief is required.
