The MFAA has urged Treasury to include relevant ATO information in the CDR, with consumer-authorised access available from the initial fact-find.
The Mortgage and Finance Association of Australia (MFAA) has urged Treasury to include relevant Australian Taxation Office (ATO) information in the Consumer Data Right (CDR).
In its policy submission, the broker association backed the proposed expansion to support mortgage and business lending and help combat loan fraud, while calling for arrangements that would allow commercial and asset finance brokers to participate.
Its recommendations extend beyond which datasets should be included, covering early verification, secure information sharing, consent, implementation costs and the interaction with existing lending obligations.
The MFAA argued that, while the CDR already allows consumers to authorise the sharing of designated banking information, including balances, transactions and existing credit commitments, it did not consistently supply the income and taxation information needed for credit assessments.
Consequently, it said consumers are still routinely asked for payslips, income statements, tax returns, notices of assessment, and business activity statements (BAS), despite much of that information already being held by, or reported to, the ATO.
The association said this dependence on separately supplied documents added friction to applications and left opportunities for manipulation.
“This reliance on documents creates work for consumers, brokers and lenders, delays applications and creates opportunities for documents to be altered or fabricated,” the paper said.
“Consumer authorised access to relevant ATO held information could reduce these problems and improve the provenance of financial evidence.”
Early access central to lending benefits
The MFAA wants Treasury to prioritise information according to demonstrated lending and consumer needs, rather than make entire taxation records the starting point.
Its proposed priorities include PAYG and Single Touch Payroll (STP) income information, relevant self-employed and business taxation information, BAS, notices of assessment, HELP debts and tax liabilities.
However, the association argued that the benefits would depend on when that information became available, calling for an appropriate CDR access pathway with proportionate safeguards during the initial information-gathering process.
“The design of access is as important as the choice of data. To deliver meaningful benefits, relevant ATO held information should be available, with the consumer’s authorisation, at the initial fact-find and information-gathering stage of the broker process,” it said.
“This would enable brokers to consider verified income and taxation information when assessing a consumer’s circumstances and determining appropriate lending options.”
The association linked that earlier access to better-prepared applications, while arguing that information should be capable of moving securely to lenders without unnecessarily repeating the collection process.
“This would allow brokers to identify discrepancies earlier, reduce reliance on manually supplied documents and prepare more complete applications,” the MFAA said.
“The framework should also consider how relevant information obtained during this process can be securely shared with lenders, where legally permitted, to minimise duplication while preserving lenders’ assessment responsibilities.”
Broader access sought across finance broking
The submission also identified the proposed expansion as an opportunity to address gaps in the existing trusted adviser arrangements.
Under the current framework, consumers can authorise an accredited data recipient or CDR representative to disclose information to a nominated trusted adviser.
Mortgage brokers are among the specified professional classes, alongside accountants, lawyers and financial advisers.
The MFAA said the broader finance broking sector was not included in those arrangements and reiterated its earlier advocacy for more flexible third-party disclosure provisions.
It recommended extending appropriate access to commercial and asset finance brokers, either by expanding the trusted adviser framework or introducing a broader third-party disclosure consent mechanism.
“Ensuring that the proposed ATO datasets are accessible through appropriate arrangements for these brokers would extend the productivity, efficiency and fraud prevention benefits of the reform to small business and commercial lending,” the association said.
The MFAA also said the framework should avoid unnecessary repeat permissions and retrieval while retaining consumers’ authority over their information.
“The framework should enable lenders to access and use relevant information obtained with the consumer’s authorisation, without requiring separate consent or duplicate data retrieval where this can be appropriately authorised, while preserving consumer control over how their information is used,” the paper said.
Costs and compliance must not undermine reform
Alongside broader access, the MFAA called for consumers to receive clear explanations of which information would be accessed, why it would be used and which parties would be authorised to receive it.
It added that consumer choice should remain central, with the association also cautioning against excessive disclosure and implementation settings that could exclude smaller businesses.
“The reform should complement existing open banking and open finance architecture, be affordable for small broking businesses, minimise disclosure of sensitive information and avoid creating a presumption that every available data field must be collected for every application,” the MFAA said.
The submission further urged Treasury to assess any proposed charging model before implementation and ensure that pricing and set-up costs did not deter participation.
It also warned against introducing additional or duplicative verification and record-keeping requirements.
Additionally, the MFAA wants Treasury to work with the Australian Securities and Investments Commission (ASIC) to clarify how access would interact with responsible lending requirements and mortgage brokers’ best interests duty (BID) obligations.
Before a wider rollout, it also recommended testing the complete process with brokers, aggregators, lenders and technology providers across PAYG, self-employed and small-business lending scenarios.
The submission follows an April appeal to federal Treasurer Jim Chalmers from finance industry associations, including the MFAA, seeking secure, consent-based access to ATO-held notices of assessment and income tax return information to help reduce mortgage fraud.
That earlier push also sought access to ASIC company registry data.
[Related: Budget backs ATO data sharing in CDR push]
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