PRDE - proposed changes to simplify, clarify and improve its operation
The Principles of Reciprocity and Data Exchange (PRDE) is a set of industry-developed data exchange rules that support Australia’s consumer credit reporting system. ARCA (through its subsidiary, the Reciprocity and Data Exchange Administrator (RDEA)) administers the PRDE.
ARCA has recently reviewed the operation of the PRDE based on our experience as administrator over the last few years. We are now proposing to make some changes to the rules to simplify, clarify and improve its operation.
(The PRDE will separately be subject to a broader independent review of its operation beginning in the next year.)
The full changes are set out (with an explanation) here
A marked-up version of the PRDE with those changes is here
Overall, the changes generally clarify or simplify existing provisions of the PRDE. However, there are some improvements that may be of more interest to stakeholders (item numbers refer to this document):
- Items 3, 22 and 23: will provide more transparency to other signatories and consumers about which credit providers have signed the PRDE, including the ‘brands’ under which they participate (e.g. a signatory, ABC Bank Ltd, may also participate in credit reporting under its sub-brand ‘Bank of Wagga Wagga’. That sub-brand will now be listed in the register that will be made available to signatories and publicly).
- Items 8 and 29: sets out some additional exemptions from the need to contribute credit information in very limited circumstances. These are highly technical, and we don’t think will change existing practice (i.e. the exemptions give effect to current practice).
- Items 10 and 11: providing additional detail regarding the participation of ‘agent CPs’ under the PRDE (i.e. mortgage managers). We are also preparing an information sheet for prospective signatories which operate using more complex lending structures (e.g. servicers; special purpose funding vehicles; mortgage managers).
- Item 13: we are proposing to change the transitional provisions for ‘start ups’ to (i) allow the start-up to not contribute data for 3 months from their Effective Date; and, (ii) after those 3 months, require all data to be contributed (i.e. back to the Effective Date). This differs to the 12-month transitional period for CPs with existing loan books.
- Item 18: changes the requirements for when a CP acquires credit accounts from another lender. In practice, we don’t expect this to have much impact on operational processes as the changes amend the obligations to better match existing practice.
- Item 24: introducing a requirement for CPs to notify the RDEA of any material changes to their business that would impact other Signatories’ use of the data (e.g. upcoming M&A activity that would change the name in which data is contributed). This obligation will be subject to any confidentiality obligations that apply to the CP.
If you have any comments or questions regarding the proposed changes, please email [email protected] by COB 19 June 2023.
Alternatively, if you would like to discuss the changes, please contact us at the above email address by COB 14 June 2023. If there is enough interest, we will put on a briefing session for relevant stakeholders.