Data driven

22 April 2013 By Daniel Indiviglio

Banks are griping about the newest U.S. financial watchdog’s appetite for stockpiles of borrower records. It’s not surprising given the industry’s zeal for asymmetrical information. Sniffing out unfair lending practices in the 21st century, however, demands 21st-century methods.

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The U.S. Consumer Financial Protection Bureau is collecting data on millions of consumers, according to an April 17 report by Bloomberg. The watchdog, created by the 2010 Dodd-Frank Act, is requiring banks to provide some consumer lending data and purchasing other statistical information from consumer credit bureaus like Experian.
Although the regulator’s chief focus is to protect consumers, another function stated by Dodd-Frank is to collect, research, monitor and publish consumer credit market data. The CFPB hopes to use the information to make data-driven decisions based on how consumers use financial products and services. Director Richard Cordray has said that making such anonymous data available will help spur innovation.

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