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Biden Wants to Shut Down Credit Bureaus


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Biden Wants to Shut Down Credit Bureaus

One of the more fascinating platform items of the Biden presidential campaign was the idea of transferring consumer credit ratings from Equifax , Experian PLC and TransUnion  to a public registry under the Consumer Financial Protection Bureau.

As reported by the Balance, this idea was examined in depth in a paper published by a think tank called Demos in 2019. One major takeaway of that paper was that “decisions drawing on credit data reproduce and spread existing racial inequality, making it harder to achieve true economic equity.” Demos proposed the idea of a public credit registry in that paper.

The CFPB has a new acting director, Dave Uejio, who recently replaced Trump appointee Kathleen Kraninger. In a CFPB blog post dated Jan. 28, Uejio stated his two main priorities would be “(1) relief for consumers facing hardship due to COVID-19 and the related economic crisis, and (2) racial equity.”

The three primary reporting agencies analyze consumer borrowing and repayment patterns. They assign scores that are then used to assess a person’s creditworthiness. This can affect their access to an apartment and their ability to hold certain jobs in addition to the amount they can borrow and the interest rates that they are charged. It’s big business — enough to support three public companies (although they have other businesses as well).

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This is pure socialism where Joe Biden wants to do away with private businesses and have Democrat appointed bureaucrats run the system so they can decide who gets credit. This is exactly what caused the crash in 2008 when democrats demanded social justice lending and those people failed to pay their mortgages.

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12 minutes ago, MovieMadness said:

Biden Wants to Shut Down Credit Bureaus

One of the more fascinating platform items of the Biden presidential campaign was the idea of transferring consumer credit ratings from Equifax , Experian PLC and TransUnion  to a public registry under the Consumer Financial Protection Bureau.

As reported by the Balance, this idea was examined in depth in a paper published by a think tank called Demos in 2019. One major takeaway of that paper was that “decisions drawing on credit data reproduce and spread existing racial inequality, making it harder to achieve true economic equity.” Demos proposed the idea of a public credit registry in that paper.

The CFPB has a new acting director, Dave Uejio, who recently replaced Trump appointee Kathleen Kraninger. In a CFPB blog post dated Jan. 28, Uejio stated his two main priorities would be “(1) relief for consumers facing hardship due to COVID-19 and the related economic crisis, and (2) racial equity.”

The three primary reporting agencies analyze consumer borrowing and repayment patterns. They assign scores that are then used to assess a person’s creditworthiness. This can affect their access to an apartment and their ability to hold certain jobs in addition to the amount they can borrow and the interest rates that they are charged. It’s big business — enough to support three public companies (although they have other businesses as well).

*********************************************

This is pure socialism where Joe Biden wants to do away with private businesses and have Democrat appointed bureaucrats run the system so they can decide who gets credit. This is exactly what caused the crash in 2008 when democrats demanded social justice lending and those people failed to pay their mortgages.

You once again edited the original content to suit your purpose.  You left out the final sentence in the 3rd paragraph, which weakens your argument:

The CFPB has a new acting director, Dave Uejio, who recently replaced Trump appointee Kathleen Kraninger. In a CFPB blog post dated Jan. 28, Uejio stated his two main priorities would be “(1) relief for consumers facing hardship due to COVID-19 and the related economic crisis, and (2) racial equity.” But nowhere does his statement specifically mention the idea of a public credit reporting agency.

There is no immediate danger of this happening.  This is a policy idea for now, and nothing more.  You better believe the "Big 3" will lobby against any such move.

And, apologies to Paul Harvey, here is the rest of the story...

While lenders certainly have the right to determine the risk of a potential borrower, the problem is the lack of transparency in the process. The three bureaus have slightly different calculation methods and data sources, which can result in the same person having three very different credit scores. Some of the criteria seem unusual and can be gamed. For example, it is better to have a high-limit credit card and only charge part of it than to charge the same amount on a low-limit credit card. Paying off a mortgage can reduce a credit score.

In addition, errors are common but difficult to correct. There’s some evidence of racial biases as well, which in turn affect access to housing, certain jobs and credit. People have the right to free copies of their credit report once a year but have to pay beyond that.

The Biden proposal would improve people’s access to their credit and may lead to standardized calculations. It could also lead to volatility if the criteria used changed with each presidential administration. There are also other credit bureaus out there that use different scoring criteria, often used by lenders that work with customers who have bad credit. It’s unclear how this proposal would affect them.

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Note: For full disclosure, my family was (emphasis on past tense) an owner of a local credit bureau for 3 generations, dating back to the WWII era.   These local businesses have been largely upended as the Big 3 can directly work with consumers and lenders via the Internet, instead of through a local bureau.

As important as credit has become over the last 50 years, more transparency is certainly needed.  Credit history is now being used in ways for which it was not originally intended (setting insurance premiums, security clearances, etc)

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Did you bother to read what I posted? This is exactly what the democrats did that caused the 2008 crash in the housing market, they gave credit to those who never were in a position to repay any loans. You cannot have a government deciding who should get loans based on social equity.

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23 minutes ago, MovieMadness said:

Did you bother to read what I posted? This is exactly what the democrats did that caused the 2008 crash in the housing market, they gave credit to those who never were in a position to repay any loans. You cannot have a government deciding who should get loans based on social equity.

I did.   The dots don't connect.

Two points:

1) Bush was in power for 8 years so the 2008 collapse was on a Republican's administration, not a Democrat's

2) The credit scoring process based on your credit history is completely separate from the decision to grant credit.  A potential creditor will use a credit score as part of their decision whether or not to grant credit.  It's one piece of the puzzle.  Credit bureaus don't loan people money.

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Ha!  But Bush's last year of service was 2008, which only means MM will scour his questionable sources and find a way to blame it all on Bill Clinton, thus saving his mammoth flawed democrat's fault argument.  ;) 

Sepiatone

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23 hours ago, txfilmfan said:

I did.   The dots don't connect.

Two points:

1) Bush was in power for 8 years so the 2008 collapse was on a Republican's administration, not a Democrat's

2) The credit scoring process based on your credit history is completely separate from the decision to grant credit.  A potential creditor will use a credit score as part of their decision whether or not to grant credit.  It's one piece of the puzzle.  Credit bureaus don't loan people money.

It is how credit scores are used not so much how they are created (complied).

I don't see any reason to change how scores are used.   This is  another lame POV by Dems,  that just because some practices impact certain groups of people more so than other,  those practices are racist on their face.     This is as unscientific as many GOPers view on climate change.  

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