Sydney, 19 December, 2005: The Australian Bankers’ Association (ABA) said the NSW Fair Trading Minister Diane Beamer’s proposals on further credit card regulation ignore the facts on Australians’ responsible management of credit.

The facts are:

1. Credit card defaults are at historic lows at 0.6% of customers;
2. Banks decline around 25% of all credit card applicants because they do not meet the banks’ rigorous lending standards;
3. Australians’ credit card repayments are exceeding their purchases - in 12 months to 31 October 2005, Australian credit card holders repaid more than the $168.3 billion in credit card purchases and cash advances for that year;
4. Credit card limits are growing at around their lowest rate since early 1998;
5. All the key indicators show that the vast majority of Australians manage their credit cards responsibly.

David Bell, Chief Executive of the ABA, said: “Australian banks employ credit risk assessment systems and methodologies – behavioural scoring - that have proven to be successful in reducing the credit risk aspect of their lending decisions.”

“The historically low default figures and Reserve Bank statistics on credit cards bear this out. Banks report the use of behavioural scoring reduces the incidence of bad debts.”

“Those promoting regulation are ignoring these facts and could foist on consumers more red tape, paperwork and inconvenience when seeking credit card products.”