djamal-soft
الاثنين، 6 يناير 2014
The system of credit scoring and reporting is undoubtedly in dire need for reform. But just how are we possibly going to get 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 conceived CFPB as a watchdog that would oversee credit scoring and reporting practices and function a recourse to consumers. The bureau released a valuable preliminary study in July 2011, which considered how scores purchased by consumers and those shown to lenders can vary, leaving consumers in darkness about their actual credit reliability. We can be thankful that the bureau is doing these continuous inspections. 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 attempt to stymie even its most modest efforts. The bottom line is that any of these types of reforms will be met with a tidal wave of money trying to undo them all.
The fact is that new legislation is 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) Function of regulators in the industry. Regulators will come in and testify under oath precisely how they conceive their own role. (You get a highest possible prospect of humiliation here.)
2) History of the industry. Center on how the purpose and design of the industry have changed from the pre-1990s to the present. This part would also address structural changes in the banking industry which make credit reporting a mess.
3) Testimony about misuses. Consumers would get to tell their tales about the misuses of credit scoring and reporting. There is plenty of evidence here. Credit reports have over 40 million mistakes on them every year, according to recent studies. Chances are this is getting worse as time goes on.
The general reason for the hearing is to identify whether current plans and systems have helped the credit lending process, degraded it, or left it roughly exactly the same.
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