Industry & Consumers
Making Better Credit Decisions
ARCA & CCR
Historically, very limited credit-related personal information could be collected and disclosed in Australia. Until 2014, Australia remained one of only a few advanced financial systems in the world to have a credit reporting system under which only so-called negative information could be shared by credit providers. That ‘negative’ information primarily related to payment defaults, adverse court judgments and bankruptcy of an individual.
ARCA was established in 2006 to provide an industry forum to advocate for improvements to Australia's
credit reporting system; and we have played a key role in the development of the regulatory and governance
framework for comprehensive credit reporting.
In 2008, the Australian Law Reform Commission (ALRC) conducted a review of Australian privacy law. ARCA advocated throughout that process for the adoption of comprehensive credit reporting (CCR). In its final report, ALRC recognised the benefits of CCR, including improved risk assessment, promoting competition and efficiency and supporting responsible lending.
As a result of the ALRC review, the Privacy Act 1988 (Cth) (Privacy Act) was ultimately amended in 2012 to allow CCR to come in to effect in 2014. Those reforms allowed more diverse and ‘positive’ information to be included in the credit reporting system, including consumer credit liability information (CCLI) which includes key information about individuals’ consumer credit such as the name of the credit provider, type of credit product, and credit limit. The reforms also allowed the reporting of repayment history information (RHI), being information about whether or not a consumer has made their credit repayments on time. Following those changes and on behalf of the Office of the Australian Information Commissioner, ARCA drafted the Privacy (Credit Reporting) Code 2014 (CR Code).
To enable implementation of CCR in Australia, ARCA identified the need to develop an industry framework for consistent exchange of credit reporting information. Accordingly, ARCA developed the Principles of Reciprocity and Data Exchange (PRDE), and the Australian Credit Reporting Data Standard (Data Standards) through extensive consultation with ARCA members and other key stakeholders. ARCA’s subsidiary, the Reciprocity and Data Exchange Authority (RDEA), is the PRDE Administrator Entity.
Since 2015 ARCA has led a number of developments in the credit reporting framework, which have further enhanced the overall operation of the credit reporting system. These developments include changes to the CR Code which have refined definitions of both consumer credit liability information (being information about consumer credit accounts) and RHI, ensuring greater consistency in the reporting of these datasets by PRDE signatories and changes to the PRDE and ACRDS to clarify signatories obligations and achieve greater consistency in data supply.
ARCA has tracked industry's progress with CCR under the PRDE through it's Credit Data Fact Base Report. At June 2020, 92% of credit accounts in Australia had CCR reported under the PRDE framework.