If they do this, it has to be like the FED. Absolutely independent from any political interference. Not allowed to sell data and be rigorous about user data. Also, find an alternative to SSNs for base ID for people.
On the other hand, it must not transform into what the CCP is doing. It has to stay true to being a proxy for credit worthiness —that is all. No handicapping either or dings for "unapproved" ideas, behavior, purchases, etc.
It's interesting seeing the American perspective on this. The perpetual mistrust of government would, I think, be warranted were that government not elected by the populace. As it is, I am a little confused why the same skepticism is not directed at the for-profit entities now operating the credit scoring system.
If you look to Bernie's wonderworld, Norway (where I'm from), all that is taken care of privately. However the credit and debt registry companies are obliged by law to inform customers when a check-up is done on them. It's quite painless, and it's a service completely paid for by the finance industry, instead of being a poorly run and corruption prone state owned and agency financed by tax money. The debt registry can perhaps become a nuiscance to a small subset of bank customers, but only those who take on added risk by loading up on big loans and credit lines at many different institutions.
Thanks, but I'd rather the government not collect all this sensitive, personal information. In fact, I'd rather nobody collect it. It's kind of shocking in the first place that our banks and lenders are allowed to release such personal information to a credit bureau without our opt-in. I'd rather Sanders focus on legislating a right to privacy, rather than for the government to take over a role that shouldn't exist.
> Under this proposal, Americans would be able to receive credit scores for free
I have never paid to see my credit score, so I'm not sure how this is novel?
Also, are things not going well at Vox? 900px (height!) of ads at the top of the page along with Outbrain trash and numerous right-rail ads and inside-the-content ads (on desktop) do not give the impression of a thriving publication.
I'm not sure that this is wholly superior, but given the apparent need for credit agencies and the zero liability for them misreporting information, the extortion, and the functionally zero cost to them when they leak information on more or less every American maybe this is the best option?
OTOH Governments have a tendency to pass laws the make suing them very hard even when they do screw up, so who knows what the ideal solution is?
I think a lot of people miss that federalizing things creates a monopoly, and it's less different from a private monopoly than we might like to think.
It is a democratic monopoly, but democracy among 300+ million people is a big hammer. Do you really, actually think that this will be a well-run service where mistakes are quickly corrected?
No. It will just be an extra layer of protection for any mistakes that are made. At least private companies have to fear the government at some level... who does the federal government fear when it does somethihn unfair? The voter? Hah.
Re: "a public, transparent algorithm to determine creditworthiness that eliminates racial biases in credit scores.”
Eliminating racial bias is admirable, but is not a thing that we have any idea how to do in any computationally rigorous way, certainly not as assumed in that language.
Modern credit scoring for anything that matters involves lender and context specific analytics. It's a much richer process than the imagined single monolithic FICO score.
In this world, giving a single entity a monopoly in generating these bespoke scores is, simply for mechanical reasons, a complete non-starter.
The way to deal with profit-oriented lenders making what seem to be unfair credit decisions is to have a credit process that solves for fairness, not profit. That amounts to starting from a place of making capital grants, something the government is very good at, and which would be a better angle for Bernie to be taking.
Andrew Yang's UBI proposal could be tweaked to optionally, at the receivers request, treat the grants in part as low interest rate loans, allowing receivers to create a credit history if they so desire.
Name one program the government has been In charge of where there isn’t some form of widespread corruption or bogged down by red tape. You want the government to give us a number like China? No thank you. I like my free will. It may be limited digitally, financially, and geographically, but I’m still happy with the government not assigning me a number.
Sounds a lot like the creepy Black Mirror shit China is doing.
Why are credit scores “racist” (as claimed by Sanders and Vox)? The outcomes being distributed differently among races does not make the methodology “racist”. The input factors into credit scores do not include race. Correlation to race, even if strong, is not causation.
Having known lots of people in the lending industry not a single one of them believes that the current credit rating system (with many I’ve talked to pointing out FICO in particularly) had any real net positive impact on the average person not so they seem to believe that banks or other lending institutions have derived any other even fit than a loophole for setting interest rates high for as many people as possible.
I think we should just go back to what we did before credit ratings, which was basically best due diligence and requiring just a little bit more documentation for a loan application
I also think in lieu of this the government can be a net positive here. In the EU this is the norm from what I understand
I love the idea of disrupting the for profit credit reporting industry. I don’t know that the government would do any better, but knocking the other guys off the map is a great start. It’s been decades since the FCRA was passed (specifically to reign in Equifax which operated more or less like the everyman’s TMZ at the time and would even pay for people to go through neighbors garbage) and it has had little impact. The big three credit bureaus are constantly sued and reprimanded and they just ignore it. Let’s try something else.
I think people would somewhat rightfully make comparisons to China’s social credit rating system.
I like the idea of killing off the existing credit rating industry, though. I would prefer it just be heavily regulated as a utility and run by an entity outside the gov.
The terrorist watch list is a good example of how the government runs and rates "risks" within its clear jurisdictional areas: https://www.thetrace.org/2016/06/fbi-terrorist-watch-list-gu...
Here's the key quote:
> "Last year, the The Intercept published a government document that spelled out the process for putting suspects in the terrorist database. The guidelines say agencies can nominate candidates for the list if there is “reasonable suspicion” to believe they are a “known or suspected terrorist.” That’s a relatively low bar, and the guidelines even make clear that agencies don’t need “concrete facts” or “irrefutable evidence” to back up their assertions. The guidelines also give a single White House official unilateral authority to place entire categories of people on the no-fly list."
We can only guess whether the public credit registry will be run with the same, better, or worse level of care and due diligence.
And before you say "omg Trump!!11" note that this article is from June 2016 and the leaked guidelines are from March 2013.
Leave them private but make legally liable for leaks and for the bad info. That mistake cost you dearly so make the registries pay.
How long until they also replace background check agencies with a public social credit registry :-)
Huge support of Sanders.. I love and hate this idea...
Love the idea of a totally open credit bureau that values privacy and does not use medical loans against us. And has full transparency....
I do however not trust the government as we've seen w/ Trump it could easily swing from leftist egalitarianism to rightist fascism in 1-2 election cycles. Then they could use credit scores as a weapon.
I think instead the government should create a regulation platform for credit agencies where they must follow certain principles to be allowed to operate as such including:
* No medical debt.
* Full transparency on how credit scores are scored -- perhaps even being required to use a government sanctioned algorithm.
* Free credit reports to consumers and other tooling.
* Must provide free counselling and support to consumers.
* May make profit from government grants + charging businesses for report access.
* Must offer ways to notify consumers when their reports have been accessed, by who, and when, and allow consumer to revoke and remove access at will.
* Must be protect privacy EVEN from government agencies, to ensure highest level of security for consumers.
Edit: a nice addition would be if they did have more integrations with government programs though, so say every citizen in the credit system is an automatically registered voter in their most recent locale.
Is there any reason someone couldn't just make a nonprofit credit bureau today?
Social credit score? You mean like china?....
Sounds too much like a social credit system.
Communism!!!
So he basically wants to implement communist china's dystopian social credit system?
"b-b-but, it's only financial credit! The story didn't say social credit! Slippery slope! SlIpPeRy SlOpE!" I hear you say. Is it though? Is it really beyond the realm of possibility for you, my hypothetical dissenter, from seeing how real and non-fallacious such a slippery slope is in this scenario?
I can't figure out if Bernie is a government shill or just too dumb to o understand the implications of what he's suggesting.
Ah. The China model. Piecewise. Shocking /s.
With how awful credit scoring is in the US, this is probably the only option going forward to actually fix it. Right now there's nothing stopping credit scores from being heavily politicized anyways, it's just a few bribes and favors away. Allowing private companies to control this information hasn't fixed anything at all and just left our information even more vulnerable to leaks or being sold.
The rest of his plan involves shrinking the usage of credit scores so that it doesn't affect employment, housing or insurance so I imagine this would lead (ideally) to the general phasing out of the ubiquitous credit scoring nonsense we have to deal with.
Awful idea. Having the government giving you a rating, even just for loans is way too far. Politics shouldn't impact my ability to pay but it certainly will. Look at the games Republicans play to suppress minority voters. You want to give those same people power over your credit scores?
This is just trying to solve a symptom with a deeper problem. The real problem is that our judicial system is absolutely cowardly towards corporation prosecution. If you actually just sent the responsible people to jail or actually bankrupted the worst actors, the situation would improve. This impacts everything from the financial industry to oil & gas to credit to privacy rights on the internet.
All of these companies get away with anything they want because we don't send the execs to jail and we rarely fine them more than the profits they made from doing the bad thing.