Gerard Scimeca – Chairman, CASE
June 24, 2021
The ability of individuals to borrow funds has long been integral to achieving economic advancement in the United States. It is also essential to the strength of the nation’s economy, as borrowers use the funds provided through lenders to generate and drive economic growth through major purchases, capital investments, or building a business.
The risk in advancing credit is borne by the lender, which must determine the ability and likelihood of the borrower to repay the funds being advanced. As evidenced by the subprime mortgage crisis of 2007-2009, economic calamities can and do result if lenders fail in their mission to offer credit responsibly – even if they do so to advance government objectives or comply with government regulations.
A proposal threatening the ability of lenders to fulfill their vital economic role is beginning to be discussed in Congress. On June 29, the House Committee on Financial Services, chaired by Congresswoman Maxine Waters (D-CA), will hold a hearing entitled “A Biased, Broken System: Examining Proposals to Overhaul Credit Reporting to Achieve Equity.”
The hearing will highlight a policy initiative from Demos, a progressive think tank, to establish a government run public credit registry (PCR). The organization’s proposal, contained in a report entitled “Data Capitalism and Algorithmic Fairness,” has been gaining some traction on Capitol Hill. Yet, there are some serious questions about what Demos is proposing and the claims they make in support of their scheme.
Read full article here.
