
Sanders wants to replace credit reporting companies with public credit registry - vanderburgt
https://www.vox.com/2019/9/21/20877050/bernie-sanders-credit-score-equifax-transunion-experian
======
dumbfoundded
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.

~~~
mieseratte
> Republicans play to suppress minority voters.

What are they doing to suppress minorities?

~~~
TallGuyShort
They want to require people to show government-issued photo IDs when voting to
prove they have the right to vote.

~~~
ping_pong
I'm a progressive liberal, but I believe this is hogwash. Many countries have
a government issued national card for citizens. It's not a huge deal.
Activists have made it seem like it's a way to suppress voters but I think
that's largely BS.

We could start a campaign now, or just after the next election in 2020, and
get people to sign up for cards by 2028, and enforce that then. We have census
every 10 years, it's something the country can easily coordinate.

~~~
patmcc
Sure, if you had a free and convenient citizen ID card, requiring ID to vote
might be just fine.

As it is currently, it's _absolutely_ a way to suppress the vote of low-income
(and minority) people. In many areas of many states getting photo ID is non-
trivial, especially if you're in a shitty job.

~~~
ping_pong
Hence why I said start the program today, with the same level of canvassing as
a census, and then enforce it some time in the future.

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mc32
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.

~~~
sieabahlpark
You know it absolutely would be used to target political opponents from both
sides.

~~~
nappy
The performance of the IRS is a strong counterargument to this.

~~~
sverige
Actually, no, it isn't. Many conservative organizations were targeted by the
IRS under the previous administration.

[https://www.npr.org/2017/10/27/560308997/irs-apologizes-
for-...](https://www.npr.org/2017/10/27/560308997/irs-apologizes-for-
aggressive-scrutiny-of-conservative-groups)

~~~
Swenrekcah
Is it possible that it was due to warranted concerns that these groups were
misusing the tax-exempt status?

~~~
sverige
It seems possible until you realize that the IRS publicly apologized for
targeting them and paid a settlement to 427 of the organizations. Four hundred
twenty-seven is far beyond any random accident or mistake.

~~~
seanmcdirmid
No, I mean sure, if you think a conservative administration settling with
conservative groups is a valid admission of guilt, go for it! But for many of
us, it just seems like Trump trying to define truth unilaterally to pander to
his base. See:
[https://en.m.wikipedia.org/wiki/IRS_targeting_controversy](https://en.m.wikipedia.org/wiki/IRS_targeting_controversy)

Spoiler: both liberal and conservative groups were subject to extra scrutiny
via keyword triggers, but only conservative groups got a settlement for
whatever reason only Trump knows. Trump was smart enough not to let it go to
court (lest any facts get argued for real).

~~~
Fjolsvith
> No, I mean sure, if you think a conservative administration settling with
> conservative groups is a valid admission of guilt,

For the actions committed under the previous liberal administration.

~~~
seanmcdirmid
Trump campaign: the IRS under Obama is corrupt!

Trump becomes president: see, I told you, the IRS under Obama was corrupt!
Let’s settle everything and withdraw all criminal charges (because you can’t
just say people are guilty) so a judge/jury doesn’t actually determine
anything.

But maybe this is valid under Trump supporter logic, I guess.

------
mighty_bander
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.

~~~
maehwasu
The government is elected by about a quarter of the populace, and even the
winning quarter is often dissatisfied at the lack of control it exerts over
its representatives.

Democratic representation is one of the leakiest abstractions ever devised.

------
kebman
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.

~~~
nickthemagicman
Why aren't private corporations corruption prone? They're the ones DOING the
corrupting! But somehow we feel they're better than government? Every
'appropriately funded' govt service I've used has been miles away better than
the equivalent private service. Schools, hospitals, research facilities,
police, student loan management company etc etc

~~~
remarkEon
>Every 'appropriately funded' govt service I've used has been miles away
better than the equivalent private service...

Strange because my experience has been the exact opposite in every case, with
the exception of police - and that's only because I don't have an immediate
proxy. That private industry provides alternatives to these public goods and
does them better is an indictment of the competence of our government, and
shouldn't be viewed as an endorsement or evidence in favor of free markets for
everything. These markets emerge _because_ of government incompetence, not
because of corruption or because the market is inherently "better".

~~~
nickthemagicman
I disagree with 100% of what you've said here.

~~~
remarkEon
Great. I also think that Houston will win the World Series again (sorry, LA).

------
propter_hoc
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.

~~~
nostromo
> without our opt-in

You do opt-in when you sign credit agreements and the like.

Since all creditors require it your options are to opt-in to credit reporting
or opt-out of borrowing.

~~~
propter_hoc
Right, that's what I'm saying should be legislated to be optional. I don't
think citizens should be forced to make that choice. Frankly, I think it might
even be best to forbid a third party from collecting a borrower's personal
information as a condition of a lender providing a personal financial product.

I will in advance disagree with the objection that this would make it
impossible for the lending industry to operate. I have run a lending business
before, and in the industry FICO score is much less valuable than a lot of
other information available to lenders (demographic, income, assets). For
asset-based lending (car loans, mortgages, etc), FICO is even more irrelevant
compared to factors like loan-to-value.

~~~
harryh
_demographic_

I don't think it's a good idea to go back to the bad old days before credit
reporting where whether you could get a loan or not was based on your
demographics (color of your skin) rather than on the objective criterion in a
credit report.

~~~
propter_hoc
Your home address, age and marital status are absolutely used by lenders in a
data-driven analysis of whether you are a creditworthy borrower. I don't think
that's a necessarily malevolent analysis, but it's also not true that we live
in a society where your demographics are irrelevant to your ability to access
credit.

~~~
harryh
_Your home address, age and marital status are absolutely used by lenders_

Oh I know. The world isn't perfect in this respect, but it's a hell of a lot
better than it used to be thanks to credit reporting. It has been an
incredibly powerful tool for social justice. Outlawing it as a tool would be a
very large step backwards.

~~~
propter_hoc
I honestly think it would be overall better for us. Like I said, FICO is a
very weak signal that isn't given much weight in the adjudication process; and
your lenders are using these other signals I listed _anyway_ , so the negative
social effects you speak of are already happening. So, the only net outcome of
automatic, forced credit reporting is that third party companies exist that
collect, misuse and profit off of citizens' personal data.

Anyway, rather than a draconian approach of outlawing credit bureaus, I think
a law making third-party credit reporting optional rather than required is the
right thing to push for, and more realistic than a nonstarter suggestion like
nationalizing the credit bureaus.

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joegahona
> 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.

~~~
caseysoftware
Re: the ads - Facebook & Google are playing games and playing them dirtier
than ever before: [https://thechive.com/2019/09/19/facebook-and-google-are-
curr...](https://thechive.com/2019/09/19/facebook-and-google-are-currently-
playing-their-toxic-endgame-10-photos/)

~~~
dmix
Google really has been pushing the limits of their customers tolerance for
their advertising recently. Has there been some management change or is this
just another stock boosting attempt to mask the plateauing which happens to
every business?

I guess they've given up the constraint and minimalism that helped them get to
#1 in the first place. Once again the obsession with never ending growth is
compromising the utility of the top players and pressures the regulators to do
something.

Google should be happy there are ad blockers, otherwise there'd be a lot more
outcry and pushback from the influential tech community.

------
olliej
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?

------
jeffdavis
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.

~~~
693471
Federalizing means all Americans are voting shareholders but the goal isn't to
make a profit.

There are lots of situations where I think that is preferred, but people won't
look at it this way because of socialism/communism scare.

------
jonahbenton
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.

------
someonehere
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.

~~~
otachack
What's a SSN in your view, then?

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egdod
Sounds a lot like the creepy Black Mirror shit China is doing.

~~~
wastman
Companies like Equifax are already selling your credit data and handling it
irresponsibly. I'd rather have my credit data be held by the government than
the idiots at Equifax.

~~~
egdod
I’m not thrilled with Equifax, but I have a hard time believing bureaucrats
are the solution.

------
throwawaysea
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.

~~~
reureu
If you're interested in this topic, you should look at "Weapons of Math
Destruction."

It's a question of if the outcomes are distributed differently among races
because the races represent truly different probabilities, or because the
inputs to the model were already tainted against some race. For example, let's
say you judge creditworthiness based on membership in a particular honors
society, but that honors society doesn't exist at historically black colleges.

~~~
gizmo686
In the latter case, the solution _is_ racism. If the non racial signals are
biased against group X, then, when used in the context of those other signals,
membership in group X becomes a positive signal, regardless of its independent
signal. I believe there was a time when the military did precisly this for
black SAT (or simmilar) score, because they found the same score tender to be
smarter when it was a black person.

------
no_wizard
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

~~~
randycupertino
Having worked as an apartment manager, I can say that credit ratings were the
single best factor for selecting a good tenant. I gave three tenants with bad
credit a shot (single mom I felt bad for, blue color couple who seemed really
nice and hardworking at screening and a couple who moved from abroad and had
no credit at all) and I got burned by all of them ending up missing rent and
needing to evict, sob stories and late rent, or causing other problems and
fighting with their neighbors. After those experiences I basically only
selected people above 750 to for our units and it always seemed like the
higher the credit score yielded us responsible tenants who paid on time,
didn't cause headaches at the building and left their units in good condition
when they moved out.

As an aside, one interesting thing I noticed over the years fielding
applications for open units, _EVERY_ single person in the world who has bad
credit or subpar credit apparently has the same psycho ex. It was rather
amusing hearing that story over and over again. If you have poor credit and
you're trying to rent a place- own up to it and be honest about why it's bad!

~~~
no_wizard
Makes sense since those with that kind of rate tend to be people with their
lives a little more out together.

Not to dismiss the point though, but it’s also extremely anecdotal. I don’t
know that it would actually hold true statistically that this would be the
majority case.

Escpially given I myself have been under 750 and I have never had these issues

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zxcvbn4038
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.

------
tempsy
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.

------
caseysoftware
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...](https://www.thetrace.org/2016/06/fbi-terrorist-watch-list-guns/)

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.

------
onetimemanytime
Leave them private but make legally liable for leaks and for the bad info.
That mistake cost you dearly so make the registries pay.

------
PeCaN
How long until they also replace background check agencies with a public
social credit registry :-)

~~~
JoshTriplett
In a way they do (minus the "public"). The Global Entry program uses opaque
trustworthiness criteria to decide who should get less screening at airports.

------
gremlinsinc
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.

------
wilg
Is there any reason someone couldn't just make a nonprofit credit bureau
today?

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wpdev_63
Social credit score? You mean like china?....

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Simulacra
Sounds too much like a social credit system.

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hansdieter1337
Communism!!!

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jakeogh
Ah. The China model. Piecewise. Shocking /s.

------
fzeroracer
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.

