Treasurer promises banking competition

Providing consumer credit data held by the major banks to all lenders will improve competition in the banking industry, the Turnbull government hopes.

Legislation requiring large banking institutions to provide credit information to reporting bodies, allowing customers with good histories to shop around and for those on default rates to better demonstrate their creditworthiness, cleared federal parliament's lower house on Monday.

"This bill is about empowering customers and making banks more competitive which is what our banking system needs," Treasurer Scott Morrison said.