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ICA backs credit reporting changes

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The proposed mandatory comprehensive credit reporting regime (CCR) will help lenders’ mortgage insurers improve risk pricing, the Insurance Council of Australia (ICA) says in a submission to Treasury.

Treasury was seeking feedback on the exposure draft legislation to implement the changes.

A new credit reporting category in the revised bill will allow hardship information to be reported alongside repayment history details.

“CCR is important to lenders’ mortgage insurance providers operating in Australia,” the ICA submission says, adding it “strongly supports” the proposed scheme.

“[Lenders’ mortgage insurance] providers rely on access to CCR information such as defaults, bankruptcies, writs or summons to appropriately identify, measure and price risk in providing mortgage insurance coverage,” the submission says.

“This is why direct access to all available credit information on a borrower is integral to the business model of all [lenders’ mortgage insurance] providers under Australia’s prudential regulatory regime.”