Home >> Daily Dose >> New Solution to Helping Credit-Poor Consumers Proposed
Print This Post Print This Post

New Solution to Helping Credit-Poor Consumers Proposed

CFPBThe nation’s top consumer credit watchdog wants to know how the public feels about credit agencies potentially gleaning information about their financial histories from past bill statements.

The Consumer Financial Protection Bureau (CFPB) launched the effort Wednesday on the premise that access to these documents could help millions of Americans considered invisible to credit agencies, or lacking in established credit histories.

The bill statements could range from those for rent and cell phones to receipts for electronic deposits and withdrawals from financial institutions.

The reason why? Consumers without established credit records usually resort to lenders with higher-priced loan offerings. The CFPB said the burden falls hardest on the young, minorities, and those from low-income backgrounds.

According to the agency, some 26 million Americans fit that description, and another 19 million have credit histories that have gone dry.

“Alternative data from unconventional sources may help consumers who are stuck outside the system build a credit history to access mainstream credit sources,” CFPB Director Richard Cordray said in a statement.

“We want to learn more about whether this non-traditional approach can offer opportunities to millions of Americans who are credit invisible and how to minimize any risks in how this information is used,” Cordray added.

The CFPB holds that accurate credit reporting could significantly improve lending services for these consumers and cut down on wrongful reports that lead to higher-priced loans down the line.

As is typical for these sorts of inquiries, the agency is seeking public feedback on its proposal. To view the CFPB's public request for information, click here.

 

 

 

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
x

Check Also

Home Value Appreciation Slows

For the first time since January, home value appreciation slowed month over month in August. ...

Subscribe to MDaily

MReport is here for you to stay on top of important developments in the mortgage marketplace. To begin receiving each day’s top news, market information, and breaking news updates, absolutely free of cost, simply enter your email address below.