Category: Industry News

COVID-19 Update From Credit Bureau ConnectionCOVID-19 Update From Credit Bureau Connection

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COVID-19 Virus

Dear Credit Bureau Connection Subscriber:

As a subscriber of Credit Bureau Connection, it is vital that you are aware of actions we are taking to protect you and our employees as the tragic Coronavirus (COVID-19) continues to spread throughout the United States. 

The entire team here at CBC meets daily to discuss the status of the virus and to ensure we are well prepared in our response to the virus. We carefully monitor websites for the Centers for Disease Control and the World Health Organization, and we follow their best practice recommendations. Our goal is twofold: To ensure we are maintaining consistent service to our subscribers and attending to any health concerns of our employees and their families.

To that end, we have increased the frequency and depth of cleaning that takes place at all of our facilities, and we have hand sanitizer and a wash station available for anyone entering or leaving our offices. 

We have instructed our staff to follow the following guidelines, and we encourage you to as well:

  • Wash your hands often and vigorously with anti-bacterial soap, scrubbing your entire hand for at least 20 seconds.
  • Avoid touching your eyes, nose, and mouth.
  • Cough or sneeze into your elbow or a tissue.
  • Stay at home if you are sick.
  • Make frequent use of hand sanitizers.

We will remain diligent throughout this time in maintaining the highest health standards and practices at the forefront of our pursuit.

Please visit our blog or website for updates regarding our virus response. And please, stay healthy!

Thank you for being part of the CBC family,

Alternate Data

Regulators Appear to Endorse Alternative Credit ScoringRegulators Appear to Endorse Alternative Credit Scoring

December 5, 2019, • by Tariq Kamal

Kathy Kraninger is director of the Consumer Financial Protection Bureau, which joined four other federal banking regulators in offering a largely positive opinion of alternative credit data in a joint statement this week.

WASHINGTON — The Consumer Financial Protection Bureau and four other federal regulatory agencies released a joint statement offering tempered support for the use of alternative data in credit decisioning processes, including applications for auto loans.

Alternative credit data focuses less on credit history and more on cash flow, measuring activity relating to “nonfinancial” information such as bill and rental payments and bank account balance history. The use of alternative data in “second look” platforms for applicants who fail to qualify under traditional scoring models has grown over the past decade as creditors have sought new ways to reach more borrowers.

The CFPB was joined as a signatory by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, and the National Credit Union Administration.

“Using alternative data may enable consumers to obtain additional products and/or more favorable pricing/terms based on enhanced assessments of repayment capacity,” the statement reads, in part. “These innovations reflect the continuing evolution of automated underwriting and credit score modeling, offering the potential to lower the cost of credit and increase access to credit.”

The alternative model generated 27% more approvals and reduced annual percentage rates by an average of 16%.

The statement follows the August release of a CFPB-commissioned study, undertaken in partnership with Upstart Network, an alternative scoring technology provider, that set out to compare decisioning results from traditional and alternative models.

Analysts found the alternative model generated 27% more approvals and reduced annual percentage rates by an average of 16%; no bias toward any race, ethnicity, or gender was detected.

However, “As with prior developments in the evolution of credit underwriting, including the advent of credit scoring, the use of alternative data and analytical methods also raises questions regarding how to effectively leverage new technological developments that are consistent with applicable consumer protection laws,” the regulators noted, listing unfair, deceptive, or abusive acts or practices standards and the Fair Credit Reporting Act as examples.