Government urged to ensure Digital ID reduces identity check duplication rather than adding another step to the home loan process
The Mortgage and Finance Association of Australia (MFAA) has submitted its response to the statutory review of the Digital ID Act 2024, backing the expansion of Digital ID into the private sector and urging the government to ensure the technology simplifies rather than complicates the lending process.
The MFAA pointed out that a standard home loan application can involve multiple parties — including a broker, aggregator, lender and various property transaction participants — leaving borrowers subject to repeated identity checks across what is often a single purchase journey. The association acknowledges the potential of Digital ID to address the issue by reducing duplication, strengthening protection against identity fraud and creating a more streamlined experience for borrowers.
The group made three key recommendations: that Digital ID be designed to work across the broader lending and property transaction ecosystem; that greater consumer adoption be encouraged to bolster fraud protections; and that participation be governed by a principles-based, proportionate approach.
Critically, the MFAA said Digital ID should replace existing identity verification and document-handling requirements rather than introduce an additional step into an already complex process. It called for greater interoperability with established frameworks, including anti-money laundering and counter-terrorism financing customer identification requirements, Verification of Identity processes, verifiable credentials and the Consumer Data Right.
"With mortgage and finance brokers facilitating more than 81% of new residential home loans, the MFAA continues to ensure the experience of brokers and their clients informs policy and regulatory reform," the broker association stated.
The Australian Banking Association has voiced support for the legislation, arguing that a nationwide Digital ID would be an important tool for banks seeking to better protect Australians' privacy and data.
Separately, the MFAA also lodged a submission with Treasury on the second tranche of legislation covering the government's capital gains tax and negative gearing reforms, calling for early certainty, clear Australian Taxation Office guidance and practical worked examples ahead of the 1 July 2027 commencement date.
The association also recommended allowing each self-managed superannuation fund to establish one limited recourse borrowing arrangement to acquire a newly constructed residential dwelling, citing the potential to support private investment in new housing supply.
The MFAA said it would continue to engage with the government, Treasury and regulators as both reform processes progress.
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