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The material in this presentation is the property of Fair Isaac Corporation, is provided for the recipient only, and shall not be used, reproduced, or disclosed without Fair Isaac Corporation's express consent.
» UK regulator tough/prescriptive to start with – SCOR helps
» Public interest allowed for breakthroughs on:» Third party data (connected persons)» Voters registration» All subjected to scrutiny, defined rules and clear, public interest case» Sharing of telecoms data OK but other utilities queried/debated
» Generally, quite different interpretations in each country:» UK regulators listened, probed and reviewed» Ireland – no telecoms data» France – no positive data» no voter’s information
» Stronger emphasis on ‘privacy/human rights/consumer input’ and consent issues
» Credit Information in Black Hat Full-file countries are worst hit
Yes--but spurious correlation
Prof. Rajan (a.k.a. “Black Swan” of Univ. of Chicago) -- “…loan originators would be better served by relying upon judgmental data, such as the firmness of someone’s handshake and the fixity of their gaze, rather than credit scores or loan-to-value ratios for underwriting.”
--The Economist (January 29, 2009)
Prof. Kenney (UC Davis) -- “If this is not already released to credit bureaus, and in my opinion it should not be released to them, then you are advocating further intrusion into our privacy. Moreover, cramming more credit down poor people's mouths does not help them -- it hurts them. How many more folks do you want to see lose their homes and families. We don't need more credit in this country we need LESS!”
--email response to release of PERC study New to Credit Through Alternative Data (March 2009)
Credit Information in White Hat Financial infrastructure necessary for development Key to credit access, opens door to asset building
Alternative data (consumer, commercial) Tool for preventing future excessive risk Carol Wayman -- Sr. Legislative Director, CFED--
“President Obama promised to make policies that strengthened the middle class. This policy would make the benefits of middle class status more attainable for millions of Americans - and with no budgetary impact. [Congress must] include affirmative permission for utility and telecom firms to report on-time utility payment information to any credit bureau [in the ARRA].” (January 2009)
Promoting regional standard (comprehensive, full-file, private) Intense efforts on outliers (Aus, NZ) Research on transition to full-file, comprehensive Active in China (PAFIRC, PKU) Two-level approach (APEC, member economies as neeed)
APEC taking up issue Viewed as financial infrastructure Considered from commercial perspective Trans-border data flows (Wellington, February 2009) Endorsed by ABAC, ABA
Australia and New Zealand contemplating reform ALRC endorses “fair file” NZ Privacy Commissioner expected to rule in May 2009
Japan has reform effort afoot China--PBOC, CRBC have pledged to make market competitive
Short-term focus on value-added services Data collection and provision of information services medium-term
Promoting reform in Chile Mostly retail credit (85%), only publish negative, positive is privacy
invasion State to select private vendor to maintain catalog
Supporting reform in Mexico Buro de Credito must share with other Bureau negative data base Offer a collective report with data from other Bureaus upon request
Implementing reform in Brazil Serasa Experian undertook policy push Court ruled that positive reporting permissible
South Africa catalyzes comprehensive reporting Developing PCR (public credit registry) for short-run Will mandate reporting of data, then share with private bureaus NCR supports alternative data
USAID FinMark Trust
Kenya Began bureau licensing process in February 2009 Mandated negative reporting (positive to come) Banks face fines for non-compliance
Nigeria IFC, Central Bank, NBA, and Accenture Great plan, terrible implementation
MENA--making progress, but gaping holes Saudi Arabia has solid bureau Oman recruited solid ED from Sri Lanka
Focus on the fundamentals--some expansion possible
Still in disaster relief mode Fall out from subprime and ongoing financial crisis elsewhere Increased perception that information sharing not problem
Congress focused on behavioral targeting Particularly concerned about online information collection No PII, used by advertisers 20% to 30% chance bill could pass
Credit information sharing may be attacked in states Alternative data will dominate state and federal policy
PERC and allies pushing for removal of state barriers Federally preemptive legislation in the works
» How can we properly build public interest cases to off set consumer distrust, mitigate the Big Brother image and allay fears of automation?
» What is the best way to balance (perceived) commercial need against (genuine and testable) consumer/public interest?
» What moves are being made towards sounder international standards using tested base models that can mirror the trend towards global financials standardisation.?
» How can best use be made of data research on positive data sharing, consumer rights and protection and how can that be extended to issues of ‘consent’, security and enlightened ‘high standard’ practices?
Related Sessions» New Laws and Regulations for Lenders» Global Privacy / Security Update» Legislative / Regulatory Efforts to Harmonize Retail Credit Markets in the EU» Validating Basel II Retail LGD Models
Product Expo» FICO Scores (International)
Experts at InterACT» Brian Cooper» John Hadlow» Vance Gudmundsen
The material in this presentation is the property of Fair Isaac Corporation, is provided for the recipient only, and shall not be used, reproduced, or disclosed without Fair Isaac Corporation's express consent.