McCaskill Holds Hearing On 'Kafkaesque' Credit Report System

[Sherman A1]

Millions of consumers have an error on their credit report. In response, Democratic Senator Claire McCaskill of Missouri held a hearing Tuesday on the consumer report industry.

One out of every five consumers has an error on at least one of their major credit reports, according to a study released a few months ago by the Federal Trade Commission. Those errors can cause consumers to pay more or be denied credit or housing.

McCaskill, who recently became chairman of the Senate subcommittee on consumer protection, called the system “kafkaesque.”

“What happened in many of these instances is the consumer comes forward and says, ‘You’ve got an error,’ and all you do is put it into a two digit code," McCaskill said. "I can’t believe you’re so clogged up because all you do is put it into a two or three digit code and send it to the lender, the lender says ‘No’ and you say ‘Okay.’”

http://www.news.stlpublicradio.org/post/mccaskill-holds-hearing-kafkaesque-credit-report-system

[1StrongBlackMan]

1. Many years ago ...

when I was involved in prosecuting Mortgage Lending Discrimination cases, I found something far more troubling about the Credit Reporting industry. Statistical modeling could not account for the race-based disparities in credit scoring.

So armed, we served Fair Isaccs and attempted to gain access to their scoring model through the discovery process. They fought us furiously, arguing that the code was propriety and a trade secret. Unfortunately, the 9th Circuit agreed with them and quashed our discovery. Further, the 9th Circuit refused to require them to require them to produce "any and all document ... Respondent believes supports its response to Interogatories # 'X-Y'." The gist of those questions were: Is race/ethnicity, in any way, a factor or a consideration in the computation of the credit score? Their complete response was: "No."

I am convinced that race/ethnicity is a factor in FICO scores.

[Sherman A1]

2. I am certain that it is

but, in a rigged system how do you prove it, as you discovered? Don't know your age, but this is a TV show from many years ago that I recall about credit scoring. It is one that really stuck with me. If it ever becomes available and you have the chance, I highly recommend it.

http://www.imdb.com/title/tt0528581/