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Government continues to consult on CDR expansion

By Keith Ford
2 minute read

Treasury has released exposure draft amendments to the Consumer Data Right (CDR) rules for consultation.

The previous Liberal government initially proposed expanding the Consumer Data Right to non-bank lending in January 2022, launching a consultation two months later.

At the time, the government said the new “open finance” focus, as opposed to the CDR’s initial focus on open banking, was intended to give consumers a more complete view of their finances by enhancing the value of existing data in the regime through cross-sectoral applications.

In November 2022, the non-bank lenders sector was designated as subject to the CDR to facilitate more informed consumer engagement with both banks and non-bank lenders, with a goal of improved financial outcomes for individuals and businesses.

Following another round of consultation, which ran from December 2022 to January 2023, stakeholder feedback was taken into account to develop the amendments.

“Because of the similarity between the banking and non-bank lenders sectors, the policy intention is to maintain regulatory consistency where possible. For this reason, Schedule 3 to the CDR Rules (Schedule 3) has been selected as the vehicle for bringing non-bank lenders into the CDR,” the exposure draft explanatory material said.

Under the new exposure draft rules, the elements of Schedule 3 that would apply to non-bank lenders include:

  • eligibility requirements for consumers seeking to make requests for CDR data;
  • provisions specifying in-scope products and data sets that may, or must, be provided on request; and
  • requirements for internal and external dispute resolution.

Additional changes that affect the obligations of authorised deposit-taking institutions (ADIs) include:

  • introducing data sharing in relation to “buy now, pay later” products (subject to a deferral timetable to allow affected ADIs to make the necessary IT enhancements);
  • excluding information relating to financial hardship and repayment history from the definition of “account data”;
  • excluding consumer data relating to debts bought by debt buyers or debt collectors from the definitions of “voluntary consumer data” and “required consumer data”; and
  • deferring obligations for entities that become ADIs after the commencement of the amending rules, with the aim of allowing CDR consumers timely access to product data while permitting new ADIs to complete the IT uplift needed to facilitate banking data requests.

The consultation is now open and interested parties can submit responses up until 6 October 2023.