Credit Bureaus Move against Lenders That Withhold Info

By Fickenscher, Lisa | American Banker, December 30, 1999 | Go to article overview

Credit Bureaus Move against Lenders That Withhold Info


Fickenscher, Lisa, American Banker


Lenders that have been withholding some of their customer data from credit bureaus are facing the prospect of retaliation from the bureaus and intervention by banking regulators.

Two of the big three credit information companies, Equifax Inc. and Trans Union Corp., are putting policies into effect over the next two days to curtail what they view as a detriment to thorough loan evaluations by its customers. In some cases, they will not sell screened lists of potential customers to lenders that do not supply their own customer data.

The other major credit bureau, Experian Inc., is expected to follow suit eventually.

In Washington, the Office of the Comptroller of the Currency has been most vocal in seeking to ban information withholding, and a broad regulatory move, including guidance from the multi-agency Federal Financial Institutions Examination Council, will likely take shape early in the new year.

The practice of not contributing to the major credit-reporting data bases began several years ago in the subprime market to prevent competing lenders from poaching profitable customers. It spread this year to the point where companies controlling more than 50% of the credit market stopped reporting customers' credit limits and peak-balance data.

The regulators would come down strongly in favor of complete data reporting, while the bureaus would employ carrot-and-stick enforcement.

"When somebody extends credit to a customer, it's important to have a complete financial picture," said David Gibbons, deputy comptroller of the currency for credit risk. He described the lack of it as "a safety-and-soundness implication."

Trans Union, of Chicago, is aiming its full-reporting policy at subprime lenders, mainly in the home, auto, and credit card areas.

These lenders "should not have access to account data if they are not reporting their own data," said Bill Rodgers, executive vice president of Trans Union. "It's a fairness issue."

At least for now, Trans Union is not applying the policy to mainstream credit card issuers because they are reporting other data such as payment histories, payment amounts, and delinquencies, among other things. But Mr. Rodgers said Trans Union will review its policy on credit card lenders.

Atlanta-based Equifax, in a letter to customers Tuesday, said that if credit card issuers do not supply peak-balance or credit-limit information, then they will not receive such data on prescreen lists from Equifax.

Trans Union's decision "was painful financially," Mr. Rodgers said. Trans Union has severed ties with certain lenders that have not taken steps toward full credit reporting, he said.

"We took a hit here," Mr. Rodgers said, "but I'm hoping we will be rewarded for it."

The issue is sensitive for the bureaus precisely because they are pitted against their biggest customers.

The Equifax letter, signed by Paul J. Springman, senior vice president of sales, said the company values its customers and aims to provide innovative, high-quality services. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Credit Bureaus Move against Lenders That Withhold Info
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.