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FTC/CFPB Consumer Reporting Accuracy Workshop Report

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Recently, I was honored to be a participant in the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) co-sponsored Workshop titled “Accuracy in Consumer Reporting.”

 

Terry W. Clemans is executive director of the National Consumer Reporting Association (NCRA)The Workshop featured four panel discussions, all equally balanced between industry representatives and consumer advocates, with additional featured speakers from both the FTC and CFPB. The daylong discussions focused on all aspects of consumer reporting as it pertains to the accuracy of consumer data being reported. From traditional credit transactions, collection accounts, public records of all types (civil judgments, eviction records and criminal histories which are used in resident and employment screening consumer reports) were all addressed in the sessions.

 

Accuracy of the data is an area in which the NCRA has a major interest, and has played a major role in over the years. Way back in 1993, under the National Association of Independent Credit Reporting Agencies (NCRA’s founding name), we studied the accuracy implication of the move from the then required Residential Mortgage Credit Report (RMCR) to the current standard, the automated tri-merge. That study showed that there would be very little new data found by adding the third national credit bureau file, and significantly lost data from eliminating the RMCR requirements in the quest for speed and cheaper reports. Fast-forward nearly 30 years and those findings were upheld.

 

In 2002, the largest credit reporting accuracy study still ever conducted was performed by NCRA and the Consumer Federation of America, examining more than 1.2 million live tri-merge consumer reports and scores in three various size phases. We saw areas of concern, which Congress acted to address in 2003 with the passing of Fair and Accurate Credit Transactions Act (FACTA). FACTA created the annual credit report Web site that provided consumers a free copy of their credit report for the first time without some type of adverse credit action happening to them, along with many other changes to improve the industry.

 

Most recently, the sweeping reforms known as the National Consumer Assistance Plan (NCAP) rolled out in 2015 incrementally over a three-year period made further changes that have increased the accuracy of consumer credit reports. NCAP eliminated areas that were problematic, and created new ways to improve other long time challenges. Of the multiple changes NCAP created, one of the most notable was the wholesale elimination of civil judgments from the national credit bureau databases. With the loss of Personal Identifying Information (PII) like Social Security Numbers and date of birth from many of those records, matching them to the proper consumer became inconsistent to a level in which they were removed from the system.

 

Panel One addressed the credit furnisher practices and compliance with accuracy requirements, featuring Panelists Leslie Bender, chief strategy officer and general counsel with BCA Financial Services; Francis Creighton, president and chief executive officer with the Consumer Data Industry Association; Syed Ejaz, policy analyst with Consumer Reports; Nessa Feddis, senior counsel and vice president with the American Bankers Association (ABA); Elisabeth Johnson-Crawford, chief technical officer with Credit Builders Alliance; and Moderators Susan Stocks, office of enforcement with the CFPB and David Wake of the Office of Supervision Policy with the CFPB.

 

All of the data in consumer reports start from a source of many types. Traditional creditors, collection agencies, private and government public record sources to name the most common. This group addressed some issues with each that set the foundation for future panels.

 

The opening of the Workshop was provided by Tiffany George, a senior attorney with the FTC Division of Privacy and Identity Protection, specifically focused on our industry. FTC Commissioner Noah Joshua Phillips and Peggy Twohig, Assistant Director for Supervision Policy for the CFPB both provided remarks with long-time industry regulator Twohig’s address, “Setting the Stage–A Decade of Developments in Consumer Reporting” really hit the mark laying the framework for the sessions to come.

 

Panel Two addressed the current accuracy topics for traditional credit reporting featuring Panelists Roberto Cera, senior manager of data acquisitions for TransUnion; E. Michelle Drake, shareholder with BergerMontague PC; Troy Kubes, vice president and deputy chief compliance officer with Equifax; Ed Mierzwinski, senior director of federal consumer programs with the U.S. Public Interest Research Group; Donna Smith, chief data officer with consumer information services for Experian North America; Michael A. Turner, president and chief executive officer with the Policy and Economic Research Council; with Moderators Tony Rodriguez and Kiren Gopal from the Office of Supervision Policy of the CFPB.

 

This panel did a deeper dive into the traditional credit trade lines, the vast majority of most consumer report data that source is the creditors who furnish the information about their consumers to the credit bureaus.

 

After lunch, Brian Johnson, Deputy Director of the CFPB and Andrew Stivers, Deputy Director of the Bureau of Economics for the FTC, made remarks to recap the morning sessions, set up the day, and underline the importance of this industry to our nation’s economic health. Those remarks led into Panel Three, addressing “Accuracy Considerations for Background Screening.” Those panelists were: Terry Clemans, executive director of the National Consumer Reporting Association (NCRA); Eric Dunn, director of litigation for the National Housing Law Project; Jamie Gullen, supervising attorney with Community Legal Services; Ariel Nelson, staff attorney with the National Consumer Law Center; Melissa L. Sorenson, executive director for the Professional Background Screening Association; Matt Visser; chief executive officer with VICTIG Screening Solutions; along with Moderators Tiffany George and Amanda Koulousias from the Division of Privacy and Identity Protection for the FTC.

 

Background consumer reports have a major impact on consumer ability to obtain rental housing and employment and is in need of help in the areas of missing and inconsistent data coming from the sources, the various types of municipal, states and private sources who collect, store and provide that information for reporting. 

 

Panel Four addressed “Navigating the Dispute Process,” and featured Panelists LaDonna Bohling, chief compliance officer with Receivable Solutions; Eric J. Ellman, senior vice president of public policy and legal affairs with the Consumer Data Industry Association; Stephanie Froelich, chief executive officer with True Hire; Kristi C. Kelly, and attorney with Kelly & Guzzo; Rebecca Kuehn, a partner with Hudson Cook; Chi Chi Wu, a staff attorney with the National Consumer Law Center; and Moderators Amanda Koulousias of the Division of Privacy and Identity Protection with the FTC and Beth Freeborn of the Bureau of Economics with the FTC. The proper handling of consumer disputes is the battleground of consumer accuracy. Wrong data harms everyone, and unfortunately, there those trying to beat the system via identity theft and other methods that will dispute accurate items as inaccurate. Complicating matters worse is the credit repair firms, most of which use highly questionable and sometimes illegal practices to remove any derogatory items, regardless of legitimacy.

 

The day’s closing remarks were provided by Maneesha Mithal, Associate Director of the Division of Privacy & Identity Protection with the FTC. Maneesha made several interesting reflections on the day and discussed how this Workshop and the written comments submitted both prior to and through Jan. 30, 2020 will be digested by both agencies and lay the groundwork for future FTC and CFPB actions in the consumer reporting industry over the coming months. The current consumer reporting system is a robust and accurate one, however, there is always room for improvement.

 

It is very gratifying as a very active, long-time industry participant to see that so much has improved in the quality of consumer reporting over the past 30 years. The level of accuracy and the speed in which a consumer disputes are both processed vastly better today than in the past. All segments of the industry continue to improve the system that is regarded as the best in the world, and a key element of the world’s strongest economy. While the credit reporting system is not perfect, and it never will be, something that Sen. Proxmire realized back in 1970 with the original FCRA—we as an industry should be proud of the changes that we have advanced to benefit all Americans.



 Peggy Twohig, Assistant Director for Supervision Policy for the CFPB, presents “Setting the Stage–A Decade of Developments in Consumer Reporting”
Peggy Twohig, Assistant Director for Supervision Policy for the CFPB, presents “Setting the Stage–A Decade of Developments in Consumer Reporting”

 

Panel One Moderators Susan Stocks of the CFPB with David Wake of the FTC

Panel One Moderators Susan Stocks of the CFPB with David Wake of the FTC

 

 

Nessa Feddis of the American Bankers Association and Elisabeth Johnson-Crawford from Credit Builders Alliance share their thoughts on compliance
Nessa Feddis of the American Bankers Association and Elisabeth Johnson-Crawford from Credit Builders Alliance share their thoughts on compliance

 

Nessa Feddis of the American Bankers Association and Elisabeth Johnson-Crawford from Credit Builders Alliance share their thoughts on compliance
Francis Creighton from the Consumer Data Industry Association and Syed Ejaz from Consumer Reports address attendees during the opening panel discussion

 

Panel Two Moderators Tony Rodriguez and Kiren Gopal from the Office of Supervision Policy of the CFPB took a closer look at traditional credit trade lines

Panel Two Moderators Tony Rodriguez and Kiren Gopal from the Office of Supervision Policy of the CFPB took a closer look at traditional credit trade lines

 

Troy Kubes of Equifax shares his insight during the second panel discussion

Troy Kubes of Equifax shares his insight during the second panel discussion

 

Panelist Roberto Cera of TransUnion discusses traditional credit reporting

Panelist Roberto Cera of TransUnion discusses traditional credit reporting

 

Ed Mierzwinski of the US Public Interest Research Group discusses traditional credit reporting during his Panel Two session

Ed Mierzwinski of the US Public Interest Research Group discusses traditional credit reporting during his Panel Two session

 

Donna Smith of Experian North America shares her thoughts on traditional credit reporting

Donna Smith of Experian North America shares her thoughts on traditional credit reporting

 

Brian Johnson, Deputy Director of the CFPB, highlights how the Bureau enforces its mandates

Brian Johnson, Deputy Director of the CFPB, highlights how the Bureau enforces its mandates

 

The panelists of Panel Three: Accuracy Considerations for Background Screening

The panelists of Panel Three: Accuracy Considerations for Background Screening

 

Eric Dunn of the National Housing Law Project explains the role of his firm
Eric Dunn of the National Housing Law Project explains the role of his firm

 

Melissa L. Sorenson of the Professional Background Screening Association shares her thoughts during the “Accuracy Considerations for Background Screening” panel

Melissa L. Sorenson of the Professional Background Screening Association shares her thoughts during the “Accuracy Considerations for Background Screening” panel

 

Panel Three’s Matt Visser of VICTIG Screening Solutions explains the screening process

Panel Three’s Matt Visser of VICTIG Screening Solutions explains the screening process

 

Chi Chi Wu of the National Consumer Law Center takes part in the “Navigating the Dispute Process” discussion

Chi Chi Wu of the National Consumer Law Center takes part in the “Navigating the Dispute Process” discussion

 

Rebecca Kuehn of the law firm of Hudson Cook details the legalities of the dispute process

Rebecca Kuehn of the law firm of Hudson Cook details the legalities of the dispute process

 

Eric J. Ellman of the Consumer Data Industry Association

Eric J. Ellman of the Consumer Data Industry Association

 

Eric J. Ellman of the Consumer Data Industry Association

Panel Four Moderators Amanda Koulousias and Beth Freeborn of the FTC

 

Tiffany George, Senior Attorney with the FTC delivers her Opening Remarks

Tiffany George, Senior Attorney with the FTC delivers her Opening Remarks


 

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Are Sallie Mae Student Loans Federal or Private?

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When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances

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Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit

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Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.

 

 

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