Following public consultation, Treasury has recommended that the CDR be extended beyond banking, energy and telecommunications to include the non-bank lending sector.
In its final sectoral assessment report, Treasury said that extending the CDR to non-bank lending would likely result in significant benefits for individuals and businesses including better service and greater potential for innovation.
It recommended that generic and publicly available information about non-bank lending products, customer information such as contact details and information on the use of non-bank lending products should be subject to CDR data-sharing obligations.
The proposed extension of the CDR forms part of a new focus on ‘open finance’ which is also set to include the merchant acquiring, general insurance and superannuation sectors.
“With the independent Reserve Bank raising interest rates to respond to inflation, there has never been a better time to apply the Consumer Data Right to our loans sector,” said Assistant Treasurer Stephen Jones.
“Borrowers will be able to use their own data to properly compare loan offerings and decide on the best one for them. This will keep lenders on the ball as well as lowering processing costs if a customer decides to change providers.”
The government said it had received advice which suggested extending the CDR would result in lower barriers for borrowers switching lenders and lead to greater competitive tension.
“The Albanese Government believes better-informed consumers and more transparent markets will drive innovation and competition,” it said.
Consultation on a draft designation instrument that would extend the CDR to non-bank lending is now open and is set to run until 16 September.
“You could get rid of the fact-finding process at a few clicks of a button with this new information, along with alerts, triggers, and flags when your clients’ financial circumstances change, or when they can afford a new investment or property, or have enough funds to be able to invest in the ASX,” he suggested.
Mr Scriven pointed out that amendments made to CDR rules last year would allow clients to share their data with trusted professional advisers including financial advisers, accountants, tax agents, mortgage brokers and financial counsellors.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.