Review of financial hardship arrangements
Submissions closed on 10 June 2018.
On 2 August 2019, the Attorney-General announced legislative amendments to allow reporting of consumer financial hardship information. This is an outcome of the review into hardship arrangements.
On 28 March 2018, the Attorney-General announced that the Attorney-General's Department would lead a review into hardship arrangements and how they interact with the consumer credit reporting framework.
The department released a discussion paper and sought public submissions by 10 June 2018. The discussion paper outlines the review process and key issues relevant to the review.
The review considered the submissions received and consultations undertaken with stakeholders, and informed the legislative amendments announced by the Attorney-General.
On 2 August 2019, the Attorney-General announced legislative amendments to allow reporting of consumer financial hardship information. This is an outcome of this review.
Under the proposed changes, hardship indicators will identify where a hardship arrangement is in place and whether a consumer is making payments in accordance with that arrangement. A separate indicator will show where there has been an agreed permanent variation to a credit contract. Hardship information will be subject to broadly the same protections as repayment history information concerning collection, use and disclosure under the Privacy Act, but will be subject to a shorter retention period.
The changes will support the Government's mandatory comprehensive credit reporting regime, which will increase lending competition and deliver better deals for Australian consumers. An exposure draft of the proposed legislation is now open for public consultation and is available on the Treasury's website.
The guidance outlines the key features of the proposed amendments.