Business loans will be included in CDR from November 1

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The ACCC revealed examples of the types of business loans that could be included within the scope of the newly expanded consumer data right.

In December 2020, the rules on consumer data rights were amended to enable more commercial customers of banks to use it and share their data with accredited data recipients.

As such, the CDR will be extended to non-individuals (such as companies) and to more business partnerships from November 1, 2021, starting with the main brands of the big banks.

The Australian Competition and Consumer Commission (ACCC) has now revised its guidance on what type of products could be shared under the updated CDR and how it would apply.

Products are generally limited to those which are products offered to the public (for example, those with contracts of standard form).

Loan / business finance products that require a high level of negotiation between lender and client (especially when a product is specially designed, or highly personalized, for the client) the more likely the product is to be out of reach of the CDR.

In addition, loans that require a large amount of negotiation – only offered to institutional and wholesale bank clients or only available through a relationship manager – are unlikely to fall within the scope of the amended CDR, suggested the ‘ACCC.

While the ACCC has stated that it is up to the data holders (i.e. banks) to consider whether their products fall within the scope, it has provided the following examples for the purposes of ‘drawing :

  • Loans which can only be used for business purposes, whether secured or unsecured, and which have low negotiation levels, are advertised on the bank’s website, may be obtained by other means than through a relationship manager, and are not limited to large companies or wholesalers. clients;
  • Lines of credit that can be used by a business if and when they need it for a fixed term, whether secured or unsecured, and which have low negotiation levels, are advertised on the bank’s website, may be obtained by means other than through a managerial relationship, and are not limited to large companies or wholesale customers; and
  • Equipment / asset finance loans that meet the above criteria and also hold the asset as collateral until the company’s repayments are complete.

[Related: The opening up of data]

Business loans will be included in CDR from November 1



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Last updated: January 23, 2021

Posted: January 25, 2021

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Annie kane

Annie kane

Annie Kane is the managing editor of The Adviser and Mortgage Business.

In addition to writing about the Australian brokerage industry, mortgage market, financial regulation, fintechs and the broader lending landscape – Annie is also the host of Elite Broker and In Focus podcasts and The Adviser Live webcasts. .

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