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Privacy Law Credit Reporting Reforms – Regulation Impact Statement – Attorney-General’s Department

On 23 May 2011, the Attorney-General introduced to Parliament the Privacy Amendment (Enhancing Privacy Protection) Bill 2012, which among other things includes credit reporting changes. The changes provide for more comprehensive credit reporting with improved privacy protections. The legislative provisions will be supported by a new industry developed credit reporting code of conduct (referred to as a code of practice in the Bill). These changes implement recommendations of the 2008 Australian Law Reform Commission report For Your Information: Australian Privacy Law and Practice. The legislative changes are intended to address limitations of the current credit reporting system, which relies on ‘negative’ reporting of a person’s credit history, by permitting the recording of some additional data categories, in particular repayment history information. These changes are expected to improve the operation of credit markets to the benefit of both lenders and borrowers. To avoid misuse of the additional information, further privacy protections are included along with rules to support responsible lending obligations of the National Consumer Credit Protection Act 2009. The credit reporting code will set out how credit reporting provisions are to be applied or complied with. The code will be a registered code and binding on all credit reporting bodies. A Regulation Impact Statement (RIS) was prepared by the Department of the Prime Minister and Cabinet (which had carriage of privacy reform at the time), and assessed as adequate by the OBPR in 2009 under the Government’s previous best practice regulation guidelines (before June 2010). Readers should note that the RIS includes the state of affairs and data available at that time, and these may have since changed. The pre-June 2010 guidelines did not require the OBPR to publish the RIS. However, the Attorney-General’s Department has agreed to allow the OBPR to publish the RIS on its website, consistent with current best practice regulation requirements.