The national system of credit rating and scoring is unquestionably in dire straights and needs reform. But exactly how shall we do it?
The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed by Congress in 2010, ensures that you are now eligible for a free copy of your credit score if you are denied a loan based on that score, and also should you get a high interest rate on a new personal loan. This is a positive improvement. But what is the motto of nearly every Republican candidate for president? Repeal Dodd-Frank! Meanwhile the Obama administration is less than willing to push on some consumer legal rights.
Warren designed CFPB as a watchdog that could oversee credit scoring and reporting practices and function a recourse to consumers. The bureau released a beneficial preliminary study in July 2011, which considered how scores purchased by consumers and those shown to lenders can vary, leaving consumers in the dark about their actual creditworthiness. We can be thankful that the bureau is doing these ongoing investigations. But without Warren at the helm, and given CFPB's positioning within the bank-centric Federal Reserve, its impact will be restricted. The industry, along the politicians it lavishes money upon, will try to stymie even its most moderate efforts.
The fact is that fundamental reforms are essential if we want to truly take back our lives from these credit scoring juggernauts. Attorney Walker Todd, who spent 2 decades in the legal sectors of the Federal Reserve Banks of New York and Cleveland, assures that to be able to even begin to deal with the systemic and structural troubles of the industry, a full-dress congressional hearing is order, ultimately in three parts, as follows:
1) What do regulators do? Government regulators should declare under oath precisely how they conceive their unique role. (That would be fun to hear)
2) History of the industry. Focus on how the goal and design of the industry have changed from the pre-1990s to the present. This would also address structural adjustments to the banking industry which make credit reporting a mess.
3) Testimony about misuses. Customers would retell of their accounts concerning the misuses of credit ratings and reporting.
The purpose of the hearing should be to evaluate if current preparations and systems have improved the availability and condition of credit, deteriorated it, or left it approximately the same.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed by Congress in 2010, ensures that you are now eligible for a free copy of your credit score if you are denied a loan based on that score, and also should you get a high interest rate on a new personal loan. This is a positive improvement. But what is the motto of nearly every Republican candidate for president? Repeal Dodd-Frank! Meanwhile the Obama administration is less than willing to push on some consumer legal rights.
Warren designed CFPB as a watchdog that could oversee credit scoring and reporting practices and function a recourse to consumers. The bureau released a beneficial preliminary study in July 2011, which considered how scores purchased by consumers and those shown to lenders can vary, leaving consumers in the dark about their actual creditworthiness. We can be thankful that the bureau is doing these ongoing investigations. But without Warren at the helm, and given CFPB's positioning within the bank-centric Federal Reserve, its impact will be restricted. The industry, along the politicians it lavishes money upon, will try to stymie even its most moderate efforts.
The fact is that fundamental reforms are essential if we want to truly take back our lives from these credit scoring juggernauts. Attorney Walker Todd, who spent 2 decades in the legal sectors of the Federal Reserve Banks of New York and Cleveland, assures that to be able to even begin to deal with the systemic and structural troubles of the industry, a full-dress congressional hearing is order, ultimately in three parts, as follows:
1) What do regulators do? Government regulators should declare under oath precisely how they conceive their unique role. (That would be fun to hear)
2) History of the industry. Focus on how the goal and design of the industry have changed from the pre-1990s to the present. This would also address structural adjustments to the banking industry which make credit reporting a mess.
3) Testimony about misuses. Customers would retell of their accounts concerning the misuses of credit ratings and reporting.
The purpose of the hearing should be to evaluate if current preparations and systems have improved the availability and condition of credit, deteriorated it, or left it approximately the same.
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