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2©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Data accuracy/consumer disputes
The Military Lending Act
Regulatory trends in online lending
Regulators’ views on “Big Data”
Congressional “Access to Credit” agenda
Q&A session
Today’s Discussion Agenda
3©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
SpeakersGovernment Affairs and Public Policy
Liz OesterleSenior Director
Murray JohnstonDirector
Jeremy HancockDirector
Zack SmithManager
Tony HadleySenior Vice President
4©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Consumer Financial Protection Bureau2016 rulemaking agenda
Short-term loans and deposit advance products
Notice of rule in February 2016
ArbitrationProposed rule expected in winter 2016
Debt collection Proposed rule inFebruary 2016
Minority and Women Owned Business Data
Proposed rule in September 2016
Credit Reporting Beyond November 2016
5©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Data Accuracy and Consumer Disputes
Credit Reporting Agency
Data Furnisher
Data User
6©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Data Accuracy and Consumer Disputes
Credit reporting complaints: Incorrect information
on a report (77%) Consumer reporting agency
investigation (8%) Inability to obtain report
and score (8%) Problems with credit
monitoring or identity protection services (5%)
Improper use of credit report (3%) 35%
Mortgages
Credit cards 7%
20%
Debt collectors
Bankaccount
Creditreporting
Other
35%8%
18%
12%
Complaints handled in 2014
7©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Military Lending ActDepartment of Defense Final Rule
Expanded definition of covered loans
Safe Harbor through:
• DoD Database
• Nationwide Consumer Reporting Agency
MLAMilitary Lending Act
MLA STANDARDS
AFFECT
FINANCIAL PRODUCTS
CAPPED
MLA RULE INCLUDES
Payday loans
Vehicle title
Refund anticipation,
deposit advance and auto
installment loans
Unsecured open-end lines of credit
Credit cards
36%Military Annual Percentage Rate
All-inclusive rate, capturing fees,
charges and the sale of credit-
related products
No longer will banks require service members to:• Submit to mandatory
arbitration and legal requirements
• Waive the Servicemembers Civil Relief Act rights
• Provide a payroll allotment
• Allow continual refinance of a payday loan
• Provide a post-dated check
• Access a bank account or car title
8©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Growth and lending models have caught the attention of regulators
Scoping by Treasury, CFPB, FDIC, FTC, States and Congress
Do online lenders enjoy a “regulatory arbitrage?”
FDIC’s Winter 2015 Supervisory Insights
Compliance with existing consumer protection laws are paramount
Online Marketplace LendingRegulators Seek More Information
9©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Big Data
Policymakers examining how big data is used in:
► Marketing► Fraud► Credit Decisions
Policymakers warn: Be fair and follow existing laws
Regulators are focusing on technology, not just data
European Union General Data Protection Regulation Safe Harbor Privacy Shield
10©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
H.R. 347 – Facilitating Access to Credit Act of 2015► Would free CFPB-supervised credit bureaus to introduce next-gen
consumer education products into the marketplace by removing barriers required by the Credit Repair Organizations Act
H.R. 4172 and S. 2355 – Credit Access and Inclusion Act of 2015► Would remove regulatory barriers that prevent furnishing consumer
payment histories to credit bureaus for telecommunication, utilities and rental bills
H.R. 4211 -- The Credit Score Competition and Equal Access Act► Would require Fannie Mae and Freddie Mac to establishing a transparent
and open process for the validation and approval of credit score models
Congressional Access to Credit Agenda
11©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Congressional Access to Credit AgendaAlternative Data
A May 2015 report from the CFPB estimates that there are roughly 45 million “credit invisibles” in the U.S.
Alternative data is payment information for: Rent Telecommunications (phone, cable and
wireless) Utilities (electric, gas, water)
Telecoms / Utilities report derogatory but not on-time payments, or the full file
Credit invisibles are consumers with no or “thin” credit files that cannot be scored
12©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Fannie Mae and Freddie Mac underwriting guidelines require use of a specific branded credit score:
Pre-recession credit behavior Older software
Score competition would allow lenders to chose among alternative score models to:
Improve risk prediction with newer scoring technology/more granularity
Score more consumers
Congressional Access to Credit AgendaCredit score competition
13©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Congressional Access to Credit AgendaCredit Building and Recovery through CROA Reform
Personalized Credit Education
Consumers are directed to Experian bythe disclosures on reports and scores, but
CROA’s misapplication stands in the way of further education when the consumer asks:
“How can I improve my score?”
What is the Credit Repair Organizations Act (CROA)?
Enacted in 1996 to protect consumers from“credit repair” scams
“Credit Repair”: Fraudulently representing to consumersthat an entity can remove accurate, but negative datafrom a consumer’s file. Often for an exorbitant fee.
3 business day waiting period
Onerous/scary consumer disclosure
Complete disgorgement offunds as remedy
14©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Questions
Inside the Beltway:CFPB Hot Topics in 2016
15©2016 Experian Information Solutions, Inc. All rights reserved.Experian Public.