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Credit Reporting Agency Equifax Integral To Banking Bill

by Countable | 3.14.18

What’s the story?

Remember Equifax, the credit reporting agency that was hacked in the summer of 2017 and exposed millions of Americans’ sensitive information to exploitation by hackers? Politico reports that the company is integral to the banking reform bill likely to get approved by Congress this week.

Following exposure of the data breach, and possible illegal trading by company executives, lawmakers shut down a contract between the company and the IRS. Still, due to the company’s role in various financial vehicles, including mortgages and other sorts of consumer lending, lawmakers included the company in the banking reform bill.

Here’s how Equifax would be required to help consumers if the banking reform bill passes:

  • Provide free credit freezes for consumers

  • Provide free credit monitoring for military personnel

Here’s how Equifax would benefit from the banking reform bill:

  • Consumers could not bring any lawsuits against the company based on their free credit reporting to military personnel. Only federal or state prosecutors could initiate legal action.

  • Federal housing lenders, Fannie Mae and Freddie Mac, would be required to consider VantageScore, a housing credit scoring vehicle owned by Equifax, Experian, and TransUnion, in addition to FICO scores, in backing mortgages.

VantageScore is not controlled in the same way FICO is by the Federal Housing Finance Agency (FHFA), and so is less conservative in their scoring. Advocates say opening the door to VantageScore could give millions of powers access to a mortgage. Critics argue it invites lending to subprime borrowers.

In the current economy consumers must have credit scores to engage in many kinds of activities, which Equifax benefits from. If lenders are then also purchasing housing credit scores from the company via VantageScore, the company vastly increases their market share, critics say.

What do you think?

Do provisions regarding Equifax affect your position on the banking reform bill, or not?

Tell us in the comments what you think, then use the Take Action button to tell your reps!

— Asha Sanaker

(Photo Credit: Got Credit via Flickr / Creative Commons)

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