CDR to be extended to non-bank lenders

Consultation is open on a draft designation instrument that would extend the Consumer Data Right (CDR) to non-bank lenders.

According to a statement, the government has received advice that suggests that this will lower barriers for borrowers switching lenders, more competition in the market.

The government also released a draft designation instrument covering the scope of datasets and data holders proposed to be designated in the sector.

“With the independent Reserve Bank of Australia raising interest rates to respond to inflation, there has never been a better time to apply the CDR to our loans sector,” says Assistant Treasurer Stephen Jones.

“Borrowers will be able to use their own data to properly compare loan offerings and decide on the best one for them.

“This will keep lenders on the ball as well as lowering processing costs if a customer decides to change providers.”

The CDR will streamline application processes, helping non-bank lenders to make more accurate and efficient lending decisions.

The CDR gives consumers the right to use data that businesses hold about them and it allows them to consent for data to be shared with other service providers.

Combining the CDR in the non-bank lending sector with other open banking initiatives will give consumers a better understanding of their financial position, further empowering their choices.

The CDR for energy will start in November this year.