The Biden admin floated the possibility of chopping off the heads of the credit reporting agencies.
Hello, LOs!
A few weeks back, the Biden administration floated the possibility of chopping off the heads of the credit reporting agencies, or even starting one federal credit report under the CFPB.
So let's talk about it, and what you as LOs would like to see when it comes to credit checks.
"While there are plenty of positives when it comes to credit reporting, it has been used more as a protection for the financial industry than a tool for consumers to build and sustain generational financial empowerment, which could be a great shift if this plan can find its footing," she wrote. "The mortgage industry has evolved with new guidelines and consumer-friendly regulations put into place, yet we are still relying on a monopolized credit reporting system that not only gives us each a score but deems one individual more credit-worthy than the next, without a ton of information available around that data or how it is derived."
Chongling concluded that "now may be a great time to explore some more modern approaches to how credit reporting is used for and against consumers."
Having been on the consumer side of it, I'm curious to hear what you as LOs would like to see.
A radical transformation of the current system that addresses racial equity issues? Targeting more low-hanging fruit? What kind of statistics/reporting would you like to see added or removed from prospective borrowers credit reports?
There has been talk that President Biden's administration may do away with or revamp the three major credit reporting agencies as a way to bridge potential disparate treatment and help eliminate racial bias.
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