Why Addition is Better than Subtraction: Measuring Impacts from System-Wide Deletion and Suppression of Derogatory Data in Credit Reporting

This study examines a proposed approach to credit reporting in response to the COVID-19 pandemic. The relative narrow and targeted credit reporting response from the CARES Act appears to have been largely successful. However, there were calls by some members of Congress for an outright system-wide ban on credit reporting any adverse information, covering all consumers during (and for some period after) the COVID-19 crisis—a policy referred to as “suppression and deletion.” This research uses 5 million credit records from 2011 and 2017 to simulate the impact on credit scores and, more importantly, on consumer access to credit if the large-scale suppression and deletion policy were implemented.

Are Expanding PCRs Crowding Out PCBs?

This report looks at the dynamics between private credit bureaus (PCBs) and public credit registries (PCRs) and finds growing global momentum to strengthen PCRs, sometimes to the detriment of PCBs. This trend has potentially harmful effects, as shown in 10 country case studies featured in the report. Credit information sharing systems are vital infrastructure and should be structured optimally. International best practices dictate that PCRs are complementary to PCBs, with PCRs playing a supervisory and risk monitoring role, while PCBs provide predictive credit and other data to lenders and other market actors to aid underwriting credit and eligibility determination for individuals and to assess loan portfolio risk and performance.

Comments to CFPB on ECOA & Reg B

The CFPB requested information to identify opportunities to prevent credit discrimination, promote fair, equitable, and nondiscriminatory access to credit, and address potential regulatory uncertainty under the Equal Credit Opportunity Act (ECOA) and Regulation B. In our response, we argue that non-financial lenders should be explicitly recognized as creditors. This would make the credit reporting system fairer, more forgiving, and more inclusive. We echo our call for a positive data reporting mandate made in earlier publications, particularly in the context of the COVID-19 healthcare and economic crisis.

Philippine Credit Information Study

This report analyzes the Philippine credit information sharing system and offers recommendations and possible amendments to the Credit Information Sharing Act (CISA) in order to improve and modernize the system.

Data for Good: COVID-19 Special Edition

Part I of the U.S. Chamber of Commerce’s Technology Engagement Centre white paper on Data for Good and the Need for a National Data Strategy features our report on Data for Good: COVID-19 Special Edition. It looks at the role of tech in responding to national healthcare and economic priorities during the pandemic. It is Part III in our U.S. Data Ecosystem series.

Credit Information Sharing in Hong Kong

This paper evaluates the credit information sharing system dynamics in Hong Kong, including data gaps, the real estate bubble, and the new entrant.

Addition is Better than Subtraction: The Risks from Data Suppression and the Benefits of Adding More Positive Data in Credit Reporting

This report looks at the potential impacts of negative credit data suppression or deletion measures during the COVID-19 pandemic period. While the proposed measures are well-intended, they harm more consumers than they help. Instead, the report recommends adding positive telecommunications payments to make the system fairer and more forgiving, giving consumers a chance to rebuild their credit history, since negative telecommunications data is already reported. This solution also protects the integrity of the national credit reporting system, vital for post-pandemic economic recovery.

PERC Research Findings for COVID-19 Economic Recovery Efforts

PERC has conducted years of research on disaster recovery (following major hurricanes, such as Katrina, Rita, and Wilma in 2005), credit access for lower income Americans, and credit reporting in general. This white paper discusses those findings and draws lessons for the economic recovery phase of the current COVID-19 crisis.